Public Cash Flow Statements

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1 Public Cash Flow Statements NACUBO Intermediate Accounting Learning Objectives Identify the GAAP guidance for the preparation of the cash flow statement List the components of the statement Describe the items included in each component of the statement Assemble the information necessary to prepare the cash flow statement 1

2 GAAP Basis GASB No. 9 required SCF for gov t proprietary funds GASB No. 34 modified GASB No. 9 to require direct method and reconciliation (more on this later) Cash Flow Information Identifies the ability to meet obligations when they are due Used to determine if the institution needs external financing Can be used to project future cash flows 2

3 Information Should Help Users determine the reasons for differences between operating income and associated cash receipts and disbursements assess the effects of the financial position of both cash and noncash investing, financing and capital transactions during the fiscal year Public C & U Concerns Four categories per GASB # 9 Operating activities Noncapital financing activities Capital financing activities Investing activities Operating activities must be presented using direct method Required reconciliation presents the indirect operating activities Gross data no netting of ins and outs Significant differences from FASB model 3

4 Definition of Cash Cash on hand and in banks Near cash investments with maturities of 90 days or less Can exclude deposits with debt service trustee Can exclude cash on hand in investment portfolio Include definition in Significant Accounting Policies note disclosures Required Presentation Format Cash flows from various activities Operating Noncapital financing Capital financing Investing Net increase (decrease) in cash + Cash and equivalents Beg of Year = Cash and equivalents End of Year 4

5 Statement of Cash Flows Clemson University CLEMSON UNIVERSITY STATEMENT OF CASH FLOWS For the year ended June 30, 2013 CASH FLOWS FROM OPERATING ACTIVITIES Payments from customers $369,484,462 Grants and contracts 118,731,747 Payments to suppliers 269,707,608 Payments to employees 307,858,154 Payments for benefits 87,096,964 Payments to students 87,096,964 Inflows from Stafford loans 65,611,886 Outflows from Stafford loans 6,935,064 Loans to students 18,812 Collection of loans 986,037 Net cash used by operating activities 157,670,632 CASH FLOW FROM NONCAPITAL FINANCING ACTIVITIES State appropriations 92,784,135 Federal appropriations 9,975,718 Gifts and grants 93,040,943 Net cash flow provided by noncapital financing activities 195,800,796 CASH FLOW FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from capital debt 16,323,216 State capital appropriations 1,960,426 Capital grants and gifts received 20,967,752 Proceeds from sale of property 458,216 Purchases of capital assets 84,921,048 Principal payments and redemption premiums on long term debt 12,113,075 Interest and fees 6,569,199 Net cash used by capital activities 63,893,712 CASH FLOWS FROM INVESTING ACTIVITIES Interest on investments 3,140,262 Proceeds from stock sales 138,751 Net cash flows provided by investing activities 3,001,511 Net change in cash 22,762,037 Cash beginning of year 436,749,772 Cash end of year $413,987,735 Reconciliation of net operating loss to net cash used by operating activities. Operating income (loss) $ (137,813,556) Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation expense 32,715,339 Change in asset and liabiliites: Receivables net 22,820,822 Grants and contracts receivable 1,055,119 Student loans receivable 219,419 Prepaid items 706,167 Inventories 15,471 Accounts and retainages payable 23,395,421 Accrued payroll and related liabilities 2,508,688 Accrued compensated absences and related liabilities 1,906,000 Unearned revenue 2,003,260 Funds held for others 5,760,568 $ Net cash used by operating activities (157,670,632) NON-CASH TRANSACTIONS Increase in fair value of investments $6,247,496 Capital assets acquired through gifts 488,429 Capital grants receivable $ 7,540,024 RECONCILIATION OF CASH AND CASH EQUIVALENT BALANCES Current assets: Cash and cash equivalents $201,781,150 Restricted cash and cash equivalents 179,353,660 Noncurrent assets 32,852,925 Total cash and cash equivalent balances $413,987,735 5

6 Cash Flows from Operations The Direct Method Shows cash inflows by major source (tuition, research activities, auxiliaries, etc. Cash outflows by natural object (salaries, payments to vendors, etc.) Required reconciliation of net income to net cash flows from operating activities is also required (indirect method) Cash Flows from Operations The Direct Method Required by GASB No. 34 Provides more complete information to statement reader Enables projections based on assumptions Generally rather difficult to compile because institutional systems don t contain required attributes in readily extractable format 6

7 Cash Flows from Operations Reconciliation (Indirect Method) Starts with excess operating expense over revenues Adjustments required to convert to the cash basis and eliminate effect of changes reported in the financial and investing categories Also adjusts for noncash items such as depreciation Cash Flows from Operations Reconciliation (Indirect Method) Required by GASB No. 34 Much easier to prepare, but obscures information about operating cash inflow and outflow Less useful to statement readers Cannot be used to project future cash flows 7

8 Cash Flows from Noncapital Financing Activities Transactions that are neither operating, capital financing nor investing activities Includes the following: State appropriations [GASB considering change] New endowment gifts Annuity gift transactions inflow and outflows Transfers to & from others Agency transactions inflows and outflows Noncapital debt proceeds and payments [including interest expense] Direct student loan transactions Cash Flow from Capital Financing Inflows include new debt proceeds, contributions restricted to capital acquisitions and state appropriations for capital acquisitions Outflows include capital bond, mortgage and note principal payments, capitalized lease payment, capital debt interest payments, capital acquisitions and capital item sale proceeds 8

9 Cash Flows from Investing Includes transaction related to traditional financial investments Investment portfolio transactions must be displayed gross purchases should not be offset against sales/maturities Interest income part of this activity rather than operating Cash Flows from Investing For purposes of this statement, short-term investments that are not cash equivalents are considered investments Institutions may wish to make the same distinction in the Statement of Position classification to facilitate articulation between the statements. 9

10 Retrieve Public Worksheet Exhibits in Handouts ABC State University Preparing the Cash Flow Statement Start with BOY and EOY comparative balance sheet Exhibit 1 Gather additional information as needed Exhibits 2, 3 and 4 Gross investment purchases and sales Gross loan activity Increase in restricted contributions Separate unrealized and realized investment gains into restricted and unrestricted Gross plant additions and deletions Distribution of cash disbursements by natural class 10

11 FY 20X3 versus 20X4 Primary Primary Year to Year Institution Institution Change ASSETS Current Assets Cash and cash equivalents $ 2,562,112 $ 4,571,218 2,009,106 A Short-term investments 14,265,989 15,278,981 1,012,992 B Accounts receivable, net 6,026,998 6,412, ,522 C Inventories 578, ,874 7,814 D Deposit with bond trustee 3,333,406 4,254, ,935 E Notes and mortgages receivable, net 355, ,175 3,293 F Other assets 426, ,263 5,764 G Total current assets 27,548,946 31,894,372 4,345,426 Noncurrent Assets Restricted cash and cash equivalents - 24,200 24,200 H Endowment investments 20,551,365 21,548, ,358 I Notes and mortgages receivable, net 1,945,673 2,035,323 89,650 J Other long-term investments Investments in real estate 6,340,846 6,426,555 85,709 K Capital assets, net (Note 1) 157,404, ,977,329 1,572,870 L Total noncurrent assets 186,242, ,012,130 2,769,787 Total assets 213,791, ,906,502 7,115,213 DEFERRED OUTFLOW OF RESOURCES 0 0 TOTAL ASSETS AND DEFERRED OUTFLOW 213,791, ,906,502 7,115,213 LIABILITIES Current Liabilities Accounts payable and accrued liabilities 4,832,154 4,897,470 65,316 M Prepaid revenue 2,782,444 3,070, ,769 N Long-term liabilities-current portion (Note 2) 3,998,666 4,082,486 83,820 O Total current liabilities 11,613,264 12,050, ,905 Noncurrent Liabilities Deposits 1,109,136 1,124,128 14,992 P Prepaid revenue 1,726,817 1,500,000 (226,817) Q Long-term liabilities (Note 2) 30,696,346 31,611, ,081 R Total noncurrent liabilities 33,532,299 34,235, ,256 Total liabilities 45,145,563 46,285,724 1,140,161 DEFERRED INFLOW OF RESOURCES 0 0 TOTAL LIABIITIES AND DEFERRED INFLOW 45,145,563 46,285,724 1,140,161 NET POSITION Invested in capital assets, net of related debt 126,149, ,861, ,375 S Restricted for Nonexpendable Scholarships and fellowships 10,799,270 10,839,473 40,203 T Research 3,722,564 3,767,564 45,000 U Expendable Scholarships and fellowships 3,208,627 2,803,756 (404,871) V Research 3,117,090 5,202,732 2,085,642 W Instructional department uses 100, , ,462 X Loans 2,323,858 2,417,101 93,243 Y Capital projects 3,209,425 4,952,101 1,742,676 Z Debt service 2,250,046 4,254,341 2,004,295 AA Other 239, , ,460 AB Unrestricted 13,526,540 12,180,107 (1,346,433) AC Total net position $ 168,645,726 $ 174,620,778 5,975,052 REVENUES Operating Revenues Student tuition and fees (net of scholarship allowances of $3,214,454) $ 36,913,194 CA $ 46,296,957 Patient services (net of cha Federal grants and contrac 10,614,660 CB State and local grants and 3,036,953 CC 7,475,987 Nongovernmental grants a 873,740 CD Sales and services of educ 19,802 CE Auxiliary enterprises: Residential life (net of sch 28,079,274 CF Bookstore (net of scholars 9,092,363 CG Other operating revenues 143,357 CH 421,571 Total operating reven 88,773,343 54,194,515 EXPENSES Operating Expenses Salaries: Faculty (physicians for th 34,829,499 CI 16,703,805 Exempt staff 29,597,676 CJ 8,209,882 Nonexempt wages 5,913,762 CK 2,065,267 Benefits 18,486,559 CL 7,752,067 Scholarships and fellowsh 3,809,374 CM Utilities 16,463,492 CN 9,121,352 Supplies and other service 12,451,064 CO 7,342,009 Depreciation 6,847,377 BB 2,976,212 Total operating expen 128,398,803 54,170,594 Operating income (39,625,460) BA 23,921 NONOPERATING REVENUES (EXPENSES) State appropriations 39,760,508 BC Gifts 1,822,442 BD Investment income (net of investment expense of $87,316 for the primary institution and 2,182,921 BE 495,594 Interest on capital asset re (1,330,126) BF (34,538) Other nonoperating revenu 313,001 BG 321,449 Net nonoperating rev 42,748, ,505 Income before othe 3,123, ,426 Capital appropriations 2,075,750 BH Capital grants and gifts 690,813 BI 711,619 Additions to permanent end 85,203 BJ Total other revenue 2,851, ,619 Increase in net a 5,975,052 1,518,045 NET POSITION Net position beginning of 168,645,726 45,900,375 Net position end of year $ 174,620,778 $ 47,418,420 11

12 ABC State University Footnote 2 Long-term Liabilities EXHIBIT 3 Primary Institution Beginning Ending Balance Additions Reductions Balance Leases and bonds Lease obligations $3,005,108 $523,597 $770,908 $2,757,797 General obligations 18,518,268 1,519,740 1,147,100 18,890,908 Revenue bonds 9,732,058 2,605,260 1,870,094 10,467,224 Total loase and bond obligations 31,255,434 4,648,597 FN3 3,788,102 FN4 32,115,929 Other liabilities Compensated absences 3,439, , ,306 3,577,984 Total other liab. 3,439, ,712 FN1 378,306 FN2 3,577,984 Total long-term oblig. $34,695,012 $5,165,309 $4,166,408 $35,693,913 Footnote 1 Capital Assets Disclosure Land $13,308,014 $0 $0 $13,308,014 Infrastructure 6,050, , ,423 6,270,377 Buildings 108,329,014 2,955, ,284,520 Furniture, etc. 47,908,549 2,787,103 2,449,486 48,246,166 Library materials 39,209,554 1,857, ,471 40,618,752 Capitalized collections 2,350, , ,850,000 Total 217,155,962 8,420,247 FN5 2,998,380 FN6 222,577,829 Less accumulated depreciation Infrastructure 1,742,352 90, ,423 1,732,129 Buildings 25,950,833 2,238, ,189,262 Furniture, etc. 17,299,215 2,501,483 2,449,486 17,351,212 Library materials 13,584,103 1,874, ,471 15,010,397 Capitalized collections 1,175, , ,317,500 Total 59,751,503 6,847,377 BB 2,998,380 FN7 63,600,500 Capital Assets, net $157,404,459 $1,572,870 $0 $158,977,329 ABC State University Analysis of Receivables, Payables and Other Items EXHIBIT 4 Prior Year Current Year Accounts Receivable Tuition and fees $1,540,670 DA $1,639,220 EA (98,550) 1 Auxiliary services - RH 1,702,662 DB1 1,614,347 EB 88,315 2 Auxiliary services - BS 216,750 DB2 169,020 EB2 47,730 3 Contracts and grants 2,535,825 DC 2,973,487 EC (437,662) 4 Unrestricted pledges 20,610 DD 15,465 ED 5,145 5 Sales and service 10,481 DE 981 EE 9,500 6 Total $6,026,998 $6,412,520 Accounts Payable Salaries and wages $1,846,170 DF $1,978,758 EF (132,588) 7 Benefits 852,835 DG 788,118 EG 64,717 8 Utilities 1,226,159 DH 1,279,220 EH (53,061) 9 Supplies 906,990 DI 851,374 EI 55, Total $4,832,154 $4,897,470 Prepaid Revenue Current Tuition and fees 639,321 DJ 793,273 EJ (153,952) 11 Auxiliary - RH 1,618,123 DK 1,526,940 EK 91, Grants and Contracts 525,000 DL 750,000 EL (225,000) 13 Total $2,782,444 $3,070,213 Noncurrent Auxiliary - RH 926,817 DM 700,000 EM 226, Gifts 800,000 DN 800,000 EN 0 15 Total $1,726,817 $1,500,000 Investments Short-term Endowment Purchases $54,580,170 DO $9,375,450 EO Sales and maturities $53,567,178 DP $8,378,092 EP Notes and Mortgages Short-term Long-term New loans 34,750 DQ 375,480 EQ Interest revenue 245,710 ER Payments received 31,457 DS 40,120 ES 12

13 Preparing the Cash Flow Statement Categorize each of the above amounts into the appropriate Cash Flow categories Complete the Statement of Cash Flows Exhibit 5 Note this exhibit adds to the left Cash Flow s from Operating Activities Tuition and fees $36,968,596 36,913,194 CA (98,550) 1 153, Research grants and contracts 14,312,691 10,614,660 CB 3,036,953 CC 873,740 CD (437,662) 4 225, Payments to suppliers (12,514,494) (12,451,064) CO (55,616) 10 (7,814) D Payments for utilities (16,410,431) (16,463,492) CN 53,061 9 Payments to employees (70,208,349) (34,829,499) CI (29,597,676) CJ (5,913,762) CK 132,588 7 Payments for benefits (18,412,870) (18,486,559) CL (64,717) 8 516,712 FN1 (378,306) FN2 Payments for scholarships and fellow ships (3,809,374) CM Loans issued to students and employees (410,230) (34,750) DQ (375,480) EQ Collection of loans to students and employees 317,287 31,457 DS 40,120 ES 245,710 ER Auxiliary enterprise charges Resident halls 27,864,581 28,079,274 CF 88,315 2 (91,183) 12 (226,817) 14 14,992 P Bookstore 9,140,093 9,092,363 CG 47,730 3 Sales and service of educational 29,302 19,802 CE 9,500 6 Other receipts (payments) 142, ,357 CH 5, (5,764) G Net cash provided (used) by operating activities (32,990,460) Cash Flow s from Noncapital Financing Activities State appropriations 39,760,508 BC Gifts and grants for other than capital purposes; 2,135,443 1,822,442 BD 313,001 BG Private gifts for endow ment purposes 85,203 BJ Net cash provided by noncapital financing activities 41,981,154 Cash Flow s from Financing Activities Proceeds from capital debt 4,125,000 4,648,597 FN3 (523,597) lease Capital appropriations 2,075,750 BH Capital grants and gifts received 690,813 BI Proceeds from sale of capital assets 0 Purchases of capital assets (7,896,650) (8,420,247) FN5 523,597 lease Principal paid on capital debt and leases (3,788,102) FN4 Interest paid on capital debt and leases (1,330,126) BF Deposit w ith trustee (920,935) E Net cash used by financing activities (7,044,250) Cash Flow s from Investing Activities Proceeds from sales and maturities of investments 61,945,270 53,567,178 DP 8,378,092 EP Interest on investments 2,182,921 BE Purchase of investments (64,041,329) (54,580,170) DO (9,375,450) EO (85,709) K Net cash provided by investing activities 86,862 Net increase in cash 2,033,306 2,009,106 A 24,200 H Cash - beginning of the year 8,483,514 Cash - end of year $10,516,820 4,571,218 24,200 13

14 Exercise for your use Using the information in the Exhibits Trace the preparation of the Cash Flow from Operations to the statement Trace the preparation of the Cash Flow from Noncapital Financing section of the statement Trace the preparation of the Cash Flow from Financing section of the statement Trace the preparation of the Cash Flow from Investing section of the statement Review statement details Learning Assessment What are the categories in the Statement of Cash Flow? What information is reported as operating activity? Nonoperating activities include what cash receipts and disbursements? Where are student Perkins Loan activities reported in the Statement of Cash Flow? What GAAP guidance directs the preparation of the Statement of Cash Flow? 14

15 Questions? Thank you! 15

COLLEGE OF SOUTHERN NEVADA STATEMENTS OF NET POSITION Unaudited

COLLEGE OF SOUTHERN NEVADA STATEMENTS OF NET POSITION Unaudited Financial Statements For the Years Ended June 30, 2017 and 2016 STATEMENTS OF NET POSITION Foundation 2017 2016 2017 2016 ASSETS Current Assets Cash and cash equivalents $ 7,156,000 $ 8,936,000 $ 53,000