UNIVERSITY OF NORTHERN COLORADO: FINANCIAL REPORT 12/31/2010

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1 UNIVERSITY OF NORTHERN COLORADO: FINANCIAL REPORT 12/31/2010 OVERVIEW The following is a summary of the financial highlights contained in the second quarter report for fiscal year : Cash and Accounts Receivable: The University s cash position continues to be strong with a balance of $56.4 million at 12/31/10, about the same as the prior year. The second quarter accounts receivable is $8.2 million, consistent with the upward trend reflective of general price increases, but within expected ranges. Budget to Forecast: In the second quarter, roll-forward was added to the budget and expenditures were forecasted based on current events and historical information. A detailed operating statement is on page 6 of this report. Tuition, including on-campus and Extended Studies, is forecasted to be $420,000 less than budget; this will be offset by UNC s budget contingency of $800,000. An updated revenue forecast based on Spring Census Date will be provided at the February board meeting. $3.0 million has been added to reserves for loss in state funding. $522,000 was added in the first quarter, and another $2.5 million was added in the second quarter upon completion of the rollforward process. The total reserve is now $13 million. Capital: UNC anticipates spending $11.2 million on capital projects in fiscal year $3.5 million is for the completion of the bond funded and COP projects, such as the West Campus housing project, the Turner renovation, and the Butler-Hancock renovation. The remaining projects are outlined on page 10 of this report. Restricted Grants and Contracts: Restricted Grants and Contracts, including federal and state financial aid are budgeted at $30.4 million for fiscal year A detailed schedule is found on page 11 of this report. Page 1 of 11

2 CASH The University cash position is slightly higher than previous years at this time. The timing of University receipts from the state has had an effect on our cash flow cycle over the last two years. The charts below show amounts available for Operating, Innovation, Capital Projects, and Reserves. (Note: Restricted funds have money owed to them from the grantors. Until the restricted funds are received, the balances are supported by operating funds.) 2nd Quarter Cash Balance Operating On Campus Education & General $ 17,728,579 Housing, Dining, Parking, UC 3,267,261 Extended Studies & Other 2,292,602 Designated for Restricted Funds 1,651,434 Innovation 2,218,620 Capital Projects 7,082,551 Reserves 22,193,617 Total Cash $ 56,434,663 39% 13% 4% 31% 6% 4% 3% On Campus Education & General Housing, Dining, Parking, UC Extended Studies & Other Designated for Restricted Funds Innovation Capital Projects Reserves $90,000,000 $80,000,000 A $70,000,000 $60,000,000 $50,000,000 $40,000,000 B FISCAL YEAR 2008 FISCAL YEAR 2009 FISCAL YEAR 2010 FISCAL YEAR 2011 $30,000,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun The cash flow trend has been relatively consistent over the last four years. The low point during the year has traditionally been the end of July through mid-august and is a good point for benchmarking purposes. Rate increases for tuition, fees, and room and board create a larger spike during tuition and fee payment periods (September and January). In addition, the trend has been affected over the last few years by various factors: Page 2 of 11

3 A In fiscal year the University did not receive its first quarter fee-for-service payments by 9/30/10. This payment of approximately $4.9 million is reflected in the second quarter. In addition, federal funds of $8.9 million were received in the first quarter of fiscal year None were received in the first quarter of fiscal year The timing of these payments account for the difference in our cash balance from the previous year. B The University cash trend is consistent with the previous years for the second quarter. Cash Balance History FISCAL YEAR FISCAL PERIOD Jul 37,036,664 40,071,414 37,556,721 40,705,795 Aug 42,029,508 42,167,196 49,416,281 55,299,254 Sep 56,814,419 66,311,899 73,785,425 67,525,865 Oct 59,507,238 64,111,305 70,479,779 69,092,272 Nov 49,980,412 52,056,981 59,763,724 58,623,010 Dec 46,676,192 48,080,598 54,920,152 56,434,663 Jan 66,276,389 68,138,855 85,483,248 Feb 73,051,394 63,481,532 81,409,777 Mar 62,312,904 65,453,966 71,434,865 Apr 55,215,001 57,779,078 62,491,426 May 48,758,032 46,839,152 60,836,341 Jun 53,001,870 53,767,705 58,020,717 CASH RESERVES Strong reserves provide the University a temporary cushion in economic downturns. The following chart shows the composition of reserves at the second quarter ending 12/31/10: Cash Reserve Summary Q2 Mandatory Bonded R&R $ 750,000 Capital Auxiliary Builiding 5,720,400 State Building 905,884 Smart Classroom 425,910 Student Fees 234,662 Operating Housing and Dining 520,000 Extended Studies 208,463 Special Colorado Loss in Funding Fund (CLIFF) 12,995,440 Central Reserves-Risk, Fringe Benefits 432,857 Total Reserves $ 22,193,617 Page 3 of 11

4 ACCOUNTS RECEIVABLE Student Accounts Receivable (AR) remains the second largest current asset at the University (cash is the largest). Timing and accounting differences account for the increases in fiscal year Student Accounts Receivable (Gross) FY 2009 FY 2010 FY 2011 Q1 - Sep 30 $ 12,903,067 $ 14,984,715 $ 16,190,552 Q2 - Dec 31 $ 6,382,646 $ 7,002,851 $ 8,234,064 Q3 - Mar 31 $ 7,708,551 $ 8,475,606 $ - Q4 - Jun 30 $ 7,202,025 $ 8,505,772 $ - Page 4 of 11

5 Generalizations for select aging buckets: ACCOUNTS RECEIVABLE AGING days is 5 months, or a semester. This pool of receivables generally represents students who are enrolled in classes days is the time period we are most concerned with. In general, these are students who have completed a semester and have made arrangements to have their bills paid to avoid having registration holds put on their accounts. It is in this time frame that more stringent collection efforts generally begin. Over 360 days includes accounts that are on payment agreement plans and have made a payment or had tax offset collection, or other accounts that we need permission from the state to write off. These accounts make up a majority of our $3.1 million allowance for bad debt. Accounts Receivable Aging at 12/31/10 Days Amount 0 to to to & Over $ 2,853, ,763 1,252,721 3,220,439 Total AR $ 8,234,064 Page 5 of 11

6 OPERATING BUDGET Annual Adjusted Budget Revenues Appropriated Revenues Resident Tuition 2) 50,727,208 Annual Forecast Variance Actual at 12/31/10 % Actual/ Budget $ $ 49,871,208 $ (856,000) $ 24,016, % Non Resident Tuition 3) 17,989,722 18,248, ,000 9,109, % COF Stipend 15,646,320 15,646,320 7,423, % Fee For Service 19,530,558 19,530,558 9,765, % Federal Stimulus 5,447,212 5,447,212 1,587, % Long Bill Appropriated Fees 4,847,495 4,847,495 2,347, % Subtotal Appropriated Revenues $ 114,188,515 $ 113,591,515 $ (597,000) $ 54,249, % Non Appropriated Revenues Extended Studies Tuition 4) $ 10,169,017 $ 10,346,017 $ 177,000 $ 3,579, % NonAppropriated Student/Other Fees 10,189,211 10,189,211 4,992, % Restricted Gifts for Operations 2,033,742 2,033,742 1,340, % Room and Board 29,507,424 29,507,424 15,475, % Other Auxiliary Services 6,247,496 6,247,496 3,938, % Other Revenue 9,773,905 9,773,905 6,160, % Net Investment Income 836, , , % Subtotal Non Appropriated Revenues $ 68,757,182 $ 68,934,182 $ 177,000 $ 35,978, % Total Revenues $ 182,945,697 $ 182,525,697 $ (420,000) $ 90,228, % Expenditures & Transfers Personnel Expenditures Faculty Salaries $ 38,040,067 $ 38,040,067 $ $ 17,501, % Exempt Salaries 21,637,320 21,637,320 10,290, % GA and TA Salaries and Scholarships 6,199,710 6,199,710 3,681, % Classified Salaries 20,406,325 20,406,325 9,632, % Others Wages 5,838,167 5,838,167 2,816, % Fringe Benefits 19,304,064 19,304,064 9,561, % Subtotal Personnel Expenditures $ 111,425,653 $ 111,425,653 $ $ 53,483, % Non Personnel Expenditures Cost of Sales $ 9,127,206 $ 9,127,206 $ $ 4,066, % Other Current Expenses 5) 16,911,589 8,900,000 8,011,589 3,239, % Purchased Services 5) 10,508,755 10,036, ,755 4,776, % Supplies 5) 5,731,302 5,365, ,302 2,500, % Scholarships 6) 12,935,785 13,431,429 (495,644) 6,787, % Utilities 6,097,268 6,097,268 3,029, % Travel 3,274,687 3,274,687 1,456, % Capital 3,050,394 3,050,394 1,451, % Subtotal Non Personnel Expenditures $ 67,636,986 $ 59,281,984 $ 8,355,002 $ 27,307, % Transfers Mandatory Transfer Out Debt Service $ 9,296,441 $ 9,296,441 $ $ 4,641, % Mandatory Transfer Out Other 864, , , % Non Mandatory Transfers Out to Capital Projects 3,452,058 3,452,058 3,305, % Non Mandatory Transfers Out to Operating Reserves 3,090,949 3,090,949 3,090, % Non Mandatory Transfers In from Restricted (83,944) (83,944) (84,511) 100.7% Subtotal Transfers $ 16,619,736 $ 16,619,736 $ $ 11,361, % Total Expenditures and Transfers $ 195,682,375 $ 187,327,373 $ 8,355,002 $ 92,152, % Revenues Less Expenditures and Transfers 7),8) $ (12,736,678) $ (4,801,676) $ (7,935,002) $ (1,924,389) Available Prior Year Balances (Net Assets) $ 13,080,488 See Explanation of Notes on Page 7 University of Northern Colorado Operating Budget 1) as of December 31, 2010 Annual Budget to Forecast 2nd Quarter Page 6 of 11

7 Notes to Second Quarter Operating Budget (page 6) The financial report includes operating, innovation, and restricted gift funds from the UNC Foundation. This report does not include internal sales, capital projects, restricted grants and contracts, restricted financial aid, or reserve funds. The report shows the forecast to budget variance indicating how the University expects to measure against the budget for the year. Another column shows the year-to-date actual and what percentage of the budget has been utilized by line item. Resident tuition for undergraduates is forecasted to be $780,000 less than budgeted for fiscal year It is anticipated that students will register for 6,100 fewer credit hours over the fiscal year than projected in the budget. This is based on fall census enrollment and takes historical patterns of interim, spring, and summer enrollment, in relation to fall enrollment, into account to forecast the remaining terms of the year. Resident tuition for graduates is forecasted to be $76,000 less than budgeted for fiscal year It is anticipated that students will register for 438 fewer credit hours than budgeted. This is based on fall census and historical patterns of enrollment for interim, spring, and summer terms. As discussed at the last board meeting, we are actively working to positively affect spring and summer enrollment. The overall variance of resident tuition is $856,000 less than budget, which is 1.7% of the total resident tuition. Non-resident undergraduate tuition is forecasted to exceed budget by $470,000. It is anticipated that non-resident students will enroll in 995 more credit hours than budgeted for fiscal year Non-resident graduate tuition is forecasted to be $211,000 less than budgeted in fiscal year It is anticipated that non-resident graduate students will enroll in 300 fewer credit hours than budgeted. The total non-resident tuition forecast is $259,000 greater than budget, which is 1.4% of the nonresident tuition budget. The on-campus tuition forecast is a $597,000 less than budget, which is 0.9% of our total oncampus tuition budget. Extended Studies has more cohorts enrolled than budgeted and is forecasting $177,000 favorable variance to budget for fiscal year Other current expenditures, purchased services, and supplies are forecasted based on historical trend. The annual roll-forward has been added to other current expenditures, but historically the full amount has not been expended. Scholarships may be over-budget for two reasons: Need-based aid awards up to $240,000 more than the original budget. Athletics scholarships of $275,000 not covered through fund-raising. The June Book original budget is $357,710. The second quarter adjusted budget is ($12,736,678). The year-to-date change of ($13,094,388) is comprised of ($9,308,854) of roll-forward added to the operating budget, ($2,539,204) of roll-forward transferred out to reserves, ($1,232,429) of roll forward for the Extended Studies FY 10 incentive plan distribution, and ($13,901) of technical corrections to the budget. After addition of the roll-forward to the operating budget, UNC s budget reflects that $12.7 million of net assets will be utilized in FY11. However, based on historical trends and current year activities, we are forecasting that we will utilize only $4.8 million of net assets in FY11. Page 7 of 11

8 Budget University of Northern Colorado On-Campus Resident and Non-Resident Tuition Detail Forecast Variance at 12/31/10 Undergrad. On-Campus Resident Non-Resident Total Undergrad. On-Campus Resident Non-Resident Total Total Fall 10 $ 21,104,238 $ 6,681,284 $ 27,785,522 Fall 10 $ 20,505,982 $ 7,006,506 $ 27,512,488 $ (273,034) Interim ,107 75, ,803 Interim ,057 75, ,753 (50) Spring 11 18,806,172 6,222,538 25,028,710 Spring 11 18,858,074 6,370,008 25,228, ,372 Summer 11 2,804, ,695 3,493,747 Summer 11 2,569, ,345 3,257,263 (236,484) Total FY $ 43,011,569 $ 13,669,213 $ 56,680,782 Total FY $ 42,231,031 $ 14,139,555 $ 56,370,586 $ (310,196) Graduate On-Campus Resident Non-Resident Total Graduate On-Campus Resident Non-Resident Total Total Fall 10 $ 3,222,879 $ 2,040,439 $ 5,263,318 Fall 10 $ 3,236,217 $ 1,856,276 $ 5,092,493 $ (170,825) Interim ,995 2,750 5,745 Interim ,126 2,435 5,561 (184) Spring 11 2,831,050 1,898,417 4,729,467 Spring 11 2,996,014 1,707,237 4,703,251 (26,216) Summer 11 1,658, ,903 2,037,618 Summer 11 1,404, ,219 1,948,039 (89,579) Total FY $ 7,715,639 $ 4,320,509 $ 12,036,148 Total FY $ 7,640,177 $ 4,109,167 $ 11,749,344 $ (286,804) Total On-Campus Resident Non-Resident Total Total On-Campus Resident Non-Resident Total Total Fall 10 $ 24,327,117 $ 8,721,723 $ 33,048,840 Fall 10 $ 23,742,199 $ 8,862,782 $ 32,604,981 $ (443,859) Interim ,102 78, ,548 Interim ,183 78, ,314 (234) Spring 11 21,637,222 8,120,955 29,758,177 Spring 11 21,854,088 8,077,245 29,931, ,156 Summer 11 4,462,767 1,068,598 5,531,365 Summer 11 3,974,738 1,230,564 5,205,302 (326,063) Total FY $ 50,727,208 $ 17,989,722 $ 68,716,930 Total FY $ 49,871,208 $ 18,248,722 $ 68,119,930 $ (597,000) Total Forecast for Fiscal Year 2010 $ (597,000) Page 8 of 11

9 CAPITAL PROJECTS UNC has a backlog of deferred maintenance of $138 million for the state supported and auxiliary facilities. State appropriations of $48 million were provided from , but only $18 million from No additional monies are anticipated from the state for this purpose in the foreseeable future (1-3 years). Page 9 of 11

10 General Fund Budget Actual at 12/31/10 FY11 funding from FY10 budget not yet assigned $ 263,942 $ Projects with budgets less than $200,000 1,796, ,288 Gray Hall Window Replacement Phase I 368, ,203 Michener Fire Alarm System 300,000 2,230 Butler Hancock Interior Renovation 280,294 62,557 Card Access System Upgrade 250, ,159 Total General Funded Expenditures $ 3,258,587 $ 785,438 Housing, Dining, Extended Studies, Student Fees FY11 funding from FY10 budget not yet assigned $ 148,831 $ Projects with budgets less than $200,000 1,883, ,508 Harrison Hall Student Rm Remodel 1,456, ,808 UC Convenience Store 773,812 45,793 Total Auxiliary and Other Funded Expenditures $ 4,262,722 $ 1,043,109 Restricted Capital Grants/Gifts Projects with budgets less than $200,000 $ 48,350 $ 1,664 Total Restricted Grant/Gift Funded Expenditures $ 48,350 $ 1,664 Total University Funded Expenditures $ 7,569,658 $ 1,830,211 State Capital Appropriations Reroof Candelaria, Butler Hancock, McKee $ 179,801 $ 76,175 Total State Capital Appropriated Expenditures $ 179,801 $ 76,175 Bond/COP Debt Funded Major Capital Project Expenditures by Funding Source Second Quarter Budget to Actual Report Harrison Renovation $ 195,000 $ 119,297 West Campus/Turner Housing Project 1,820,911 1,102,328 Butler Hancock Interior Renovation 1,473,274 1,063,064 Total Bond/COP Funded Expenditures $ 3,489,185 $ 2,284,688 Total State Capital Appropriated & Debt Expenditures $ 3,668,986 $ 2,360,864 Total Project Expenditures $ 11,238,645 $ 4,191,075 Funds to be transferred in FY11 for FY12 Capital Projects: To be expended for FY12 for General fund projects $ 886,500 To be expended for FY12 for Auxiliary fund projects 1,800,000 To be expended for FY12 for Parking fund projects 92,018 Total to be transferred in FY11 for FY12 capital projects $ 2,778,518 Page 10 of 11

11 SUMMARY OF RESTRICTED GRANTS AND CONTRACTS The following is a table summarizing Restricted Grants and Contracts for fiscal year : Restricted Grants and Contracts Q2 Actual Budget 12/31/10 Restricted Student Aid $ 17,485,969 $ 9,562,047 Restricted Grants UNC Foundation 610, ,239 Restricted Grants and Contracts NonFederal 254, ,674 Restricted Grants and Contracts Federal Subrecipient 2,262, ,809 Restricted Grants and Contracts Federal 9,827,917 2,906,059 Total Restricted Grants and Contracts $ 30,441,085 $ 13,792,829 Page 11 of 11