ANGELO STATE UNIVERSITY

Transcription

1 ANNUAL FINANCIAL REPORT FISCAL YEAR 2014 A MEMBER OF THE TEXAS TECH UNIVERSITY SYSTEM

2 ANNUAL FINANCIAL REPORT OF FOR THE YEAR ENDED AUGUST 31, 2014 SAN ANGELO, TEXAS A MEMBER OF THE TEXAS TECH UNIVERSITY SYSTEM

3 FY 2014 FINANCIAL REPORT TABLE OF CONTENTS Page LETTER OF TRANSMITTAL 1 ORGANIZATIONAL DATA 3 PROPRIETARY FUND FINANCIAL STATEMENTS (PRIMARY STATEMENTS) STATEMENT OF NET POSITION 4 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 5 STATEMENT OF CASH FLOWS 6 NOTES TO THE FINANCIAL STATEMENTS 7 SUPPLEMENTAL SUPPORTING INFORMATION SCHEDULES: 1A - Schedule of Expenditures of Federal Awards 29 1B - Schedule of State Grant Pass-Throughs To/From State Agencies 32 2A - Miscellaneous Bond Information 33 2B - Changes in Bonded Indebtedness 34 2C - Debt Service Requirements 35 2D - Analysis of Funds Available for Debt Service 36 2E - Defeased Bonds Outstanding 37 2F - Early Extinguishment and Refunding Reconciliation of Cash in State Treasury 39 DISCRETELY PRESENTED COMPONENT UNIT STATEMENT OF NET POSITION 41 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION 42

4 November 20, 2014 A.T\JGELO STATE UNIVERSITY The Honorable Rick Perry Governor of Texas Ms. Ursula Parks Acting Director, Legislative Budget Board The Honorable Susan Combs Texas Comptroller Mr. John Keel, CPA State Auditor Ladies and Gentlemen: We are pleased to submit the Annual Financial Report of Angelo State University for the year ended August 3 l, 2014, in compliance with TEX. GOV'T CODE Al\TN and in accordance with the requirements established by the Comptroller of Public Accounts. Due to the statewide requirements embedded in Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, the Comptroller of Public Accounts does not require the accompanying annual :financial report to comply with all the requirements in this statement The Financial report will be considered for audit by the State Auditor as part of the audit of the State of Texas Comprehensive Annual Financial Report: therefore, an opinion has not been expressed on the :financial statements and related information contained in this report. If you have any questions, please contact Denise Brodnax at (325) Janet Coleman may be contacted at (325) for questions related to the Schedule of Expenditures of Federal Awards. Sincerely, /'. '-;P[~~J/ 71? t0:r L.]?!.. (./ {/ / Brian J. May President ~\s:_ Sraricc~ ~ 11 CkC : Sari.6.:-:c;,tic. Jc'-~::-1.s :t.c_)1~ 1 9-l 1](1~ Phone: (32.S 1 G ED.. 1,32.S) i:;~~-:2lj::'.';s v1-1\-,y.an;~.elc.ecj..-1

5 2 November 20, 2014 ~ AS:J A;\GELO STATE UNIVERSITY Dr. Brian J. J\1ay President Angelo State University 2601 West A venue N San Angelo, Texas Dear Dr. May: Submitted herein is the Annual Financiai Report of Angelo State University for the fiscal year ended August 31, The financial statements in this report have been prepared in conformity with the General Provisions of the Appropriations Act, Article IX, and in accordance with the requiremems established by the Comptroller of Public Accounts. The accompanying Annual Financial Report will be considered for audit by the State Auditor as part of the audit of the State's Comprehensive Annual Report; therefore, an opinion has not been expressed on the statements and related information contained in this report. If you have any questions, please contact Denise Brodnax at (325) Janet Coleman may be contacted at (325) for questions related to the Schedule of Expenditures of Federal Awards. Respectfully submitted, a~ V~ h~tl:f (, 0 Angie W ight Vice President for Finance and Administration D.evti se, B rocin c'-'f- Denise Brodnax Controller Director of Accounting Accountant Carrie Whitesell Accountant

6 3 ORGANIZATIONAL DATA For the Fiscal Year BOARD OF REGENTS TEXAS TECH UNIVERSITY SYSTEM Mickey L. Long Robert L. Duncan OFFICERS Chairman Chancellor MEMBERS Term Expires Name Residence February 1 Mr. Mickey L. Long Midland, TX 2015 Mrs. Nancy R. Neal Lubbock, TX 2015 Mr. John Walker Houston, TX 2015 Mr. Larry K. Anders Dallas, TX 2017 Mrs. Debbie Montford San Antonio, TX 2017 Mr. John D. Steinmetz Lubbock, TX 2017 Mr. John Esparza Austin, TX 2019 Mr. L. Frederick Rick Francis El Paso, TX 2019 Mr. Tim Lancaster Abilene, TX 2019 PRESIDENT Dr. Brian J. May Angelina W. Wright Denise Brodnax OFFICE OF FINANCE AND ADMINISTRATION Vice President for Finance and Administration Controller Sharla A. Adam Cindy Weeaks ADMISSIONS & REGISTRAR Director of Admissions Registrar

7 4 Angelo State University Statement of Net Position (Unaudited) August 31, 2014 and 2013 Restated FY 2014 FY 2013 ASSETS Current Assets: Cash and Cash Equivalents $ 36,924, $ 33,292, Restricted: Cash and Cash Equivalents (662,042.37) (170,287.86) Legislative Appropriations 6,268, ,865, Accounts Receivable, net: Federal Receivables 18,175, ,352, Student Receivables 11,537, ,088, Gift Receivables 693, , Accounts Receivables 1,769, ,200, Due From Other Agencies (Note 12) 92, , Prepaid Items 7,083, ,912, Inventories 286, , Loans and Notes Receivable, net 591, , Total Current Assets 82,760, ,941, Non-current Assets: Restricted: Investments (Note 3) 17,293, ,882, Gift Receivables 1,129, , Non-Depreciable or Non-Amortizable 37,065, ,281, Depreciable or Amortizable 198,596, ,363, Accumulated Depreciation and Amortization (114,151,820.52) (108,382,802.74) Total Non-Current Assets 139,933, ,530, Total Assets $ 222,694, $ 214,472, LIABILITIES Current Liabilities: Accounts Payable $ 1,824, $ 1,761, Payroll Payable 3,196, ,042, Unearned Revenues 36,884, ,412, Bonds Payable (Note 5) 1,865, ,595, Employees' Compensable Leave (Note 5) 330, , Notes and Loans Payable (Note 5) 3,826, ,132, Funds Held for Others 10,891, ,858, Other Current Liabilities 2, , Total Current Liabilities 58,821, ,052, Non-current Liabilities: Employees Compensable Leave (Note 5) 2,029, ,856, Bonds Payable (Note 5) 66,329, ,195, Other Non-Current Liabilities 430, , Total Non-Current Liabilities 68,789, ,507, Total Liabilities $ 127,611, $ 124,560, NET POSITION Invested in Capital Assets, Net of Related Debt $ 51,086, $ 49,357, Restricted: Non-Expendable: Endowments 17,964, ,200, Expendable: Higher Education Assistance Fund 4,439, ,902, Other 7,415, ,122, Unrestricted 14,177, ,329, Total Net Position $ 95,082, $ 89,912, The accompanying notes to the financial statements are an integral part of this statement.

8 Angelo State University Statement of Revenues, Expenses, and Changes in Net Position (Unaudited) For the Fiscal Years Ended August 31, 2014 and Restated OPERATING REVENUES FY 2014 FY 2013 Sales of Goods and Services Tuition and Fees - Pledged $ 44,512, $ 45,771, Tuition and Fees - Unpledged 2,982, ,519, Discounts and Allowances (10,719,809.46) (10,001,010.71) Auxiliary Enterprises - Pledged 16,944, ,783, Discounts and Allowances (4,153,936.39) (3,204,142.46) Other Sales of Goods and Services - Pledged 1,181, ,285, Federal Revenue-Operating (Sch 1A) 4,135, ,144, Federal Pass Through Revenue (Sch 1A) 205, , State Grant Pass Through Revenue (Sch 1B) 5,206, ,917, Nongovernmental Grants and Contracts 576, ,007, Total Operating Revenues 60,870, ,700, OPERATING EXPENSES Salaries and Wages 46,022, ,128, Payroll Related Costs 14,069, ,461, Professional Fees and Services 751, , Travel 1,531, ,516, Materials and Supplies 7,029, ,556, Communications and Utilities 3,462, ,153, Repairs and Maintenance 2,857, ,897, Rentals and Leases 699, , Printing and Reproduction 347, , Depreciation and Amortization 6,687, ,832, Bad Debt Expense 339, , Interest Scholarships 12,872, ,698, Other Operating Expenses 7,411, ,296, Total Operating Expenses 104,081, ,658, Operating Income (Loss) (43,210,932.02) (40,958,078.56) NON-OPERATING REVENUES (EXPENSES) Legislative Revenue 33,866, ,100, Federal Revenue-Non-operating (Sch 1A) 9,283, ,400, Gifts 5,005, ,616, Investment Income 8,473, ,538, Interest Expense on Capital Asset Financing (3,091,554.69) (3,033,915.39) Gain (Loss) on Sale and Disposal of Capital Assets (103,730.89) (19,348.82) Net Increase (Decrease) in Fair Value of Investments 742, , Other Non-operating Revenues/(Expenses) - Pledged (3,476,044.38) (1,020,641.36) Total Non-operating Revenues (Expenses) 50,701, ,107, Income (Loss) before Other Revenues, Expenses, Gains/Losses and Transfers 7,490, ,149, OTHER REVENUES, EXPENSES, GAINS/LOSSES AND TRANSFERS Capital Appropriations (HEAF) 3,743, ,743, Capital Contributions - Gifts 9, , Transfers Out - TTU System Admin (Note 12) (410,084.00) (42,103.85) Transfers Out - TTUHSC (Note 12) (19,849.00) - Transfers In - TTU Foundation, Inc. (Note 12) - 11, Transfers In - TTUSA Foundation, Inc. (Note 12) 20, , Transfers Out - Other State Agencies (Note 12) (2,770,693.15) (2,874,890.09) Legislative Transfers-Out (Note 12) (2,889,644.63) (2,827,503.77) Legislative Appropriations Lapsed (2,980.13) (516.02) Total Other Revenues, Expenses, Gains, Losses, and Transfers (2,319,858.91) (1,883,460.16) Total Changes in Net Position $ 5,170, $ 1,265, Beginning Net Position (September 1, 2013) 89,912, ,646, Ending Net Position (August 31, 2014) $ 95,082, $ 89,912, The accompanying notes to the financial statements are an integral part of this statement.

9 Angelo State University Statement of Cash Flows (Unaudited) For the Years Ended August 31, 2014 and Cash Flows from Operating Activities FY 2014 FY 2013 Tuition and Fees $ 33,452, $ 36,900, Grants and Contracts 9,654, ,036, Sales and Services of Auxiliary Enterprises 15,752, ,585, Other Sales and Services 4,657, ,013, Collections for Loans Issued to Students 389, , Payments to Suppliers for Goods and Services (16,766,033.78) (14,532,860.52) Payments for Loans Issued to Students (297,477.85) (363,293.18) Payments to Employees - Salaries (46,232,794.26) (46,099,151.16) Payments to Employees - Benefits (13,447,904.87) (13,629,684.00) Payments for Other Operating Activities (22,248,580.48) (24,868,663.94) Net Cash Provided (Used) by Operating Activities (35,086,013.74) (36,544,477.57) Cash Flows from Noncapital Financing Activities State Appropriations 33,463, ,925, Noncapital Gifts 5,005, ,616, Noncapital Grants 9,283, ,400, Proceeds from Agency Transactions 31,991, ,284, Transfers to/from Other State Agencies: TTU System Admin (410,084.00) (42,103.85) TTU HSC (19,849.00) - TTU System Admin - Legislative Transfer (125,128.00) (120,628.00) TTU - 11, TTU System Admin Foundation, Inc 20, , Texas B-on-Time (410,461.13) (526,833.48) TPFA (545,852.85) (531,379.86) Other Noncapital Financing Activities (40,898,706.25) (48,428,317.64) Net Cash Provided (Used) by Noncapital Financing Activities 37,355, ,618, Cash Flows from Capital and Related Financing Activities Proceeds from Capital Debt Issuance 1,500, Capital Appropriations 3,743, ,743, Purchases of Capital Assets (5,909,582.11) (2,438,518.96) Principal Paid on Capital Debt (3,176,520.00) (3,194,755.00) Payments of Interest on Debt Issuance (3,091,554.69) (3,033,915.39) Net Cash Provided (Used) by Capital and Related Financing Activities (6,934,629.80) (4,923,546.79) Cash Flows from Investing Activities Interest and Dividends Received 8,473, ,493, Purchases of Investments (667,825.00) Net Cash Provided by Investing Activities 7,805, ,493, TOTAL NET CASH FLOWS $ 3,140, $ (4,355,708.23) Beginning Cash and Cash Equivalents, September 1 33,122, ,478, Ending Cash and Cash Equivalents, August 31 $ 36,262, $ 33,122, Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating Income (Loss) $ (43,210,932.02) $ (40,958,078.56) Adjustments: Depreciation Expense 6,687, ,832, Bad Debt Expense 339, , Changes in Assets and Liabilities: (Increase) Decrease in Accounts Receivables (4,023,412.08) (1,330,253.64) Increase (Decrease) in Due from Other Agency 51, (1,032.46) (Increase) Decrease in Loans and Notes Receivable 122, , (Increase) Decrease in Inventory (36,820.73) 11, (Increase) Decrease in Prepaid Items (959,756.87) (250,997.84) Increase (Decrease) in Accounts Payable 85, (119,385.55) Increase (Decrease) in Payrolls Payable (209,822.86) 46, Increase (Decrease) in Unearned Revenue 5,471, (1,074,928.30) Increase (Decrease) in Compensable Leave 257, , Increase (Decrease) in Benefits Payable 364, (229,259.92) Increase (Decrease) in Other Liabilities (25,751.85) (13,226.66) Net Cash Used for Operating Activities (35,086,013.74) (36,544,477.57) Non-Cash Transactions Donation of Capital Assets $ 9, $ 77, Net Change in Fair Value of Investments 742, , Disposal of Plant Facilities (918,182.56) (524,663.22) Capitalization Adjustment 93, , Trade In 26, ,800.00

10 Unaudited 7 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 NOTE 1: Summary of Significant Accounting Policies ENTITY Angelo State University is considered an Institution of Higher Education of the State of Texas, and its financial records comply with state statutes and regulations. This includes compliance with the Texas Comptroller of Public Accounts Reporting Requirements for State Institutions of Higher Education. Angelo State University serves the state by offering a wide range of academic programs leading to baccalaureates and masters degrees. Angelo State University is committed to providing educational excellence for Texas. Due to the statewide requirements embedded in GASB Statement No. 34, Basic Financial Statements - and Management s Discussion and Analysis - for State and Local Governments, the Comptroller of Public Accounts does not require the accompanying annual financial report to comply with all the requirements in this statement. The financial report will be considered for audit by the state auditor as part of the audit of the state of Texas Comprehensive Annual Financial Report; therefore, an opinion has not been expressed on the financial statements and related information contained in this report. FUND STRUCTURE The accompanying financial statements are presented on the basis of funds. A fund is considered a separate accounting entity. The fund designation for institutions of higher education is a Business Type Activity within the Proprietary Fund Type. Proprietary Funds Business Type Activity Business type funds are used for activities that are financed through the charging of fees and sales for goods or services to the ultimate user. Institutions of higher education are required to report their financial activities as business type because the predominance of their funding comes through charges to students, sales of goods and services, and grant revenues. Component Units The fund types of the individual discrete component units are available from the component units separately issued financial statements. Additional information about component units can be found in Note 19. Basis of Accounting The basis of accounting determines when revenues and expenditures or expenses are recognized in the accounts reported in the financial statements. The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Business activity type funds (proprietary funds) are accounted for on the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recognized at the time liabilities are incurred. Proprietary funds distinguish operating from nonoperating items. Operating revenues and expenses result from providing services or producing and delivering goods in connection with the proprietary funds principal ongoing operations. Operating expenses for the proprietary funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. BUDGETS AND BUDGETARY ACCOUNTING The budget is prepared biennially and represents appropriations authorized by the legislature and approved by the Governor (the General Appropriations Act). Unencumbered appropriations are generally subject to lapse 60 days after the end of the fiscal year for which they were appropriated.

11 Unaudited 8 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 ASSETS, LIABILITIES, AND FUND BALANCES/NET POSITION Assets Cash and Cash Equivalents Short-term highly liquid investments with an original maturity of three months or less are considered cash equivalents. For reporting purposes, this account includes cash on hand, cash in local banks, cash in transit, and cash in the Treasury. Investments Investments are stated at fair value in all funds except pension trust funds in accordance with GASB Statement 31 - Accounting and Financial Reporting for Certain Investments and for External Investment Pools. For pension trust funds, investments are required to be reported at fair value using the accrual basis of accounting in accordance with GASB Statement 25 - Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans. Securities lent are reported as assets on the balance sheet. The costs of securities lending transactions are reported as expenditures or expenses in the Operating Statement. These costs are reported at gross. Restricted Assets Restricted assets include monies or other resources restricted by legal or contractual requirements. These assets include proceeds of enterprise fund general obligation and revenue bonds and revenues set aside for statutory or contractual requirements. Assets held in reserve for guaranteed student loan defaults are also included. Inventories Inventories include both merchandise inventories on hand for sale and consumable inventories. Inventories are valued at cost, generally utilizing the last-in, first-out method. The consumption method of accounting is used to account for inventories that appear in the proprietary fund types and the government-wide statements. The cost of these items is expensed when the items are consumed. Capital Assets Assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year should be capitalized. These assets are capitalized at cost or, if not purchased, at appraised fair value as of the date of acquisition. Purchases of assets by governmental funds are reported as expenditures. Depreciation is reported on all exhaustible assets. Inexhaustible assets such as works of art and historical treasures are not depreciated. A road and highway infrastructure is reported on the modified accrual basis. Assets are depreciated over the estimated useful life of the asset using the straight-line method. All capital assets acquired by proprietary funds or trust funds are reported at cost or estimated historical cost, if actual historical cost is not available. Donated assets are reported at fair value on the acquisition date. Depreciation is charged to operations over the estimated useful life of each asset, using the straight-line method. Other Receivables Other receivables include year-end accruals not included in any other receivable category. This account can appear in governmental and proprietary fund types. Liabilities Accounts Payable Accounts Payable represents the liability for the value of assets or services received at the balance sheet date for which payment is pending.

12 Unaudited 9 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Other Payables Other payables are the accrual at year-end of expenditure transactions not included in any of the other payable descriptions. Other payables may be included in either the governmental or proprietary fund types. Employees Compensable Leave Balances Employees Compensable Leave Balances represent the liability that becomes due upon the occurrence of relevant events such as resignation, retirements, and uses of leave balances by covered employees. Liabilities are reported separately as either current or noncurrent in the statement of net position. GASB Statement No. 16, Accounting for Compensated Absences, establishes the standards of accounting and reporting for compensated absences (i.e., vacation, unpaid overtime, and sick leave) by State entities. Capital Lease Obligations Capital Lease Obligations represent the liability for future lease payments under capital lease contracts contingent upon the appropriation of funding by the Legislature. Liabilities are reported separately as either current or noncurrent in the statement of net position. Bonds Payable - General Obligation Bonds The unmatured principal of general obligations bonds are accounted for in the Long-term Liabilities column. Payables are reported separately as either current or noncurrent in the statement of net position. Bonds payable are recorded at par. The bond proceeds are accounted for as an Other Financing Source in the governmental funds when received, and expenditures for payment of principal and interest are recorded in the Debt Service funds when paid. These amounts are adjusted in the Long-term Liabilities column. Bonds Payable - Revenue Bonds Revenue bonds are generally accounted for in the proprietary funds. The bonds payable are reported at par less unamortized discount or plus unamortized premiums. Interest expense is reported on the accrual basis, with amortization of discount or premium. Payables are reported separately as either current or noncurrent in the statement of net position. Fund Balance/Net Position The difference between fund assets and liabilities is Net Position on the government-wide, proprietary and fiduciary fund statements, and the Fund Balance is the difference between fund assets and liabilities on the governmental fund statements. Reservation of Fund Balance Fund balances for governmental funds are classified as either reserved or unreserved in the fund financial statements. Reservations are legally restricted to a specific future use or not available for expenditure. Reserve for Encumbrances This represents commitments of the value of contracts awarded or assets ordered prior to year end but not received as of that date. Encumbrances are not included with expenditures or liabilities. They represent current resources designated for specific expenditures in subsequent operating periods. Reserve for Consumable Inventories This represents the amount of supplies, postage, and prepaid assets to be used in the next fiscal year. Unreserved/Undesignated This represents the unappropriated balance at year-end.

13 Unaudited 10 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Invested in Capital Assets, Net of Related Debt Invested in capital assets, net of related debt consists of capital assets. Net of accumulated depreciation and reduced by outstanding balances for bond, notes, and other debt, are attributed to the acquisition, construction, or improvement of those assets. Restricted Net Position Restricted net position results when constraints placed are externally imposed by creditors, grantors, contributors, and the like, or imposed by law through constitutional provisions or enabling legislation. Unrestricted Net Assets Unrestricted net position results when there are no externally imposed stipulations. Unrestricted net position may involve constraints on resources, which are imposed by management, but can be removed or modified. Interfund Transactions and Balances Angelo State University has the following types of transactions among funds: 1. Transfers: Legally required transfers that are reported when incurred as Transfers In by the recipient fund and as Transfers Out by the disbursing fund. 2. Reimbursements: Reimbursements are repayments from funds responsible for expenditures or expenses to funds that made the actual payment. Reimbursements of expenditures, made by one fund for another, are recorded as expenditures in the reimbursing fund and as a reduction of expenditures in the reimbursed fund. Reimbursements are not displayed in the financial statements. 3. Interfund receivables and payables: Interfund loans are reported as interfund receivables and payables. If repayment is due during the current year or soon thereafter, it is classified as Current, repayment for two (or more) years is classified as Non-Current. 4. Interfund Sales and Purchases: Charges or collections for services rendered by one fund to another are recorded as revenues of the recipient fund and expenditures or expenses of the disbursing fund. The composition of Angelo State University s Interfund receivables and payables at August 31, 2014 is presented in Note 12. NOTE 2: Capital Assets

14 Unaudited 11 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Reclassifications Balance Completed Inc-Int'agy Dec-Int'agy Balance 9/1/2013 Adjustments CIP Trans Trans Additions Deletions 8/31/2014 Business-type activities: Non-depreciable/Non-amortizable Assets Land and Land Improvements $2,554, $130, $2,684, Construction in Progress 32,172, (69,379.05) (179,535.51) 1,525, ,448, Other Tangible Capital Assets 554, , , , Total Non-depreciable assets $35,281, $80, ($179,535.51) $0.00 $0.00 $1,882, $0.00 $37,065, Depreciable Assets Building and Building Improvements $162,342, $179, $883, $163,404, Infrastructure 5,286, ,286, Facilities and Other Improvements 6,993, ,162, ,155, Furniture and Equipment 10,973, $13, , (749,520.18) 11,016, Vehicle, Boats, and Aircraft 1,503, , ,672, Other Capital Assets 6,932, , (8,003.27) 6,993, Total Depreciable Assets $194,031, $13, $179, $0.00 $0.00 $4,062, ($757,523.45) $197,529, Accumulated Depreciation Buildings and Improvements ($85,392,484.37) ($4,971,470.81) ($90,363,955.18) Infrastructure (2,301,107.02) (167,953.68) (2,469,060.70) Facilities and Other Improvements (5,243,405.61) (279,248.80) (5,522,654.41) Furniture and Equipment (7,083,483.59) (978,638.01) 670, (7,391,957.31) Vehicle, Boats, and Aircraft (1,238,829.96) (95,168.19) (1,333,998.15) Other Capital Assets (5,831,112.40) (179,720.85) 8, (6,002,829.98) Total Accumulated Depreciation ($107,090,422.95) $0.00 $0.00 $0.00 $0.00 ($6,672,200.34) $678, ($113,084,455.73) Amortizable Assets-Intangible Computer Software $1,331, ($264,390.00) $1,067, Total Amortizable Assets-Intangible $1,331, $0.00 $0.00 $0.00 $0.00 $0.00 ($264,390.00) $1,067, Accumulated Amortization Computer Software ($1,292,379.79) ($15,000.00) $240, ($1,067,364.79) Total Accumulated Amortization ($1,292,379.79) $0.00 $0.00 $0.00 $0.00 ($15,000.00) $240, ($1,067,364.79) Total Business-Type Activities $122,261, $93, $0.00 $0.00 $0.00 ($741,718.23) ($103,730.89) $121,510, A summary of changes in Capital Assets for the year ended August 31, 2013 is presented below for comparison purposes. Reclassifications Balance Completed Inc-Int'agy Dec-Int'agy Balance 9/1/2012 Adjustments CIP Trans Trans Additions Deletions 8/31/2013 Business-type activities: Non-depreciable/Non-amortizable Assets Land and Land Improvements $2,554, $2,554, Construction in Progress 40,580, (9,800,346.87) 1,392, ,172, Other Tangible Capital Assets 410, , , , Total Non-depreciable assets $43,545, $45, ($9,800,346.87) $0.00 $0.00 $1,491, $0.00 $35,281, Depreciable Assets Building and Building Improvements $152,541, $9,800, $162,342, Infrastructure 5,286, ,286, Facilities and Other Improvements 6,993, ,993, Furniture and Equipment 10,390, , (332,650.64) 10,973, Vehicle, Boats, and Aircraft 1,519, , (74,966.83) 1,503, Other Capital Assets 6,926, , (49,703.07) 6,932, Total Depreciable Assets $183,657, $0.00 $9,800, $0.00 $0.00 $1,031, ($457,320.54) $194,031, Accumulated Depreciation Buildings and Improvements ($80,271,177.76) ($5,121,306.61) ($85,392,484.37) Infrastructure (2,133,153.34) (167,953.68) (2,301,107.02) Facilities and Other Improvements (4,932,969.69) (310,435.92) (5,243,405.61) Furniture and Equipment (6,458,084.61) (938,700.80) 313, (7,083,483.59) Vehicle, Boats, and Aircraft (1,229,755.67) (84,041.12) 74, (1,238,829.96) Other Capital Assets (5,692,848.50) (187,966.97) 49, (5,831,112.40) Total Accumulated Depreciation ($100,717,989.57) $0.00 $0.00 $0.00 $0.00 ($6,810,405.10) $437, ($107,090,422.95) Amortizable Assets-Intangible Computer Software $1,418, ($86,691.50) $1,331, Total Amortizable Assets-Intangible $1,418, $0.00 $0.00 $0.00 $0.00 $0.00 ($86,691.50) $1,331, Accumulated Amortization Computer Software ($1,356,571.29) ($22,500.00) $86, ($1,292,379.79) Total Accumulated Amortization ($1,356,571.29) $0.00 $0.00 $0.00 $0.00 ($22,500.00) $86, ($1,292,379.79) Total Business-Type Activities $126,546, $45, $0.00 $0.00 $0.00 ($4,310,086.14) ($19,348.82) $122,261,931.94

15 Unaudited 12 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 NOTE 3: Deposits, Investments, and Repurchase Agreements Angelo State University is authorized by statute to make investments following prudent person rule. There were no significant violations of legal provisions during the period. Deposits of Cash in Bank As of August 31, 2014, the carrying amount of deposits was $2,980, (including Restricted Assets) as presented below. Business-Type Activities FY 2014 FY 2013 CASH IN BANK - CARRYING VALUE $ 2,980, $ 2,695, Less: Certificates of Deposit included in carrying value and reported as Cash Equivalent Less: Uninvested Securities Lending Cash Collateral included in carrying value and reported as Securities Lending Collateral Less: Securities Lending CD Collateral included in carrying value and reported as Securities Lending Collateral Cash in Bank per AFR $ 2,980, $ 2,695, Current Assets Cash in Bank $ 3,642, $ 4,773, Current Assets Restricted Cash in Bank (662,042.37) (2,078,129.52) Cash in Bank per AFR $ 2,980, $ 2,695, These amounts consist of all cash in local banks and a portion of short-term investments. These amounts are included on the Combined Statement of Net Position as part of the Cash and Cash Equivalents and Securities Lending Collateral accounts. As of August 31, 2014, the total bank balance was as follows: Business-Type Activities $6,243, Discrete Component Unit Business-Type Activities FY 2014 FY 2013 CASH IN BANK - CARRYING VALUE $ 536, $ 762, Less: Certificates of Deposit included in carrying value and reported as Cash Equivalent Less: Uninvested Securities Lending Cash Collateral included in carrying value and reported as Securities Lending Collateral Less: Securities Lending CD Collateral included in carrying value and reported as Securities Lending Collateral Cash in Bank per AFR $ 536, $ 762, Current Assets Cash in Bank $ 343, $ 526, Current Assets Restricted Cash in Bank 192, , Cash in Bank per AFR $ 536, $ 762, These amounts consist of all cash in local banks and are included on the Statement of Net Position as part of current unrestricted and restricted Cash and Cash Equivalents and non-current restricted Cash and Cash Equivalents. As of August 31, 2014, the total bank balance for Business-Type Activities for the Carr Foundation was $516,

16 Unaudited 13 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Investments The fair value of investments is as presented below for August 31, 2014, and August 31, 2013, respectively; Business-Type Activities Fair Value FY 2014 FY 2013 U.S. Treasury Securities $ 43, $ U.S. Treasury TIPS 5, U.S. Government Agency Obligations 68, Corporate Obligations Corporate Asset and Mortgage Backed Securities 1, Equity 7, ,015, International Obligations (Govt and Corp) 156, , Fixed Income Money Market and Bond Mutual Fund 2,185, ,030, Mutual Funds 9, , Other Commingled Funds 1,913, ,120, Other Commingled Funds (Texpool) 27,269, ,727, International Other Commingled Funds 1,897, ,085, Real Estate 546, , Domestic Derivatives 29, Domestic 10,654, ,565, International 43, , Total $ 44,830, $ 42,860, Business-Type Activities Fair Value-Discrete Component Unit FY 2014 FY 2013 Equity $ $ 6,821, International Obligations (Govt and Corp) 1,092, , Fixed Income Money Market and Bond Mutual Fund 15,199, ,932, Mutual Funds 3,481, Other Commingled Funds 13,690, ,282, Other Commingled Funds (Texpool) International Other Commingled Funds 13,626, ,009, Real Estate 10,776, ,397, Domestic Derivatives 209, Domestic 76,634, ,819, International 315, ,465, Total $ 131,545, $ 113,530,729.86

17 Unaudited 14 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Foreign currency risk for investments is the risk that changes in exchange rates will adversely affect the investment. The LTIF and STIF do not have policy limits specific to international equity or debt. All exposures are through funds managed by external investment managers. The exposure to foreign currency risk as of August 31, 2014, is presented below. Fund Type GAAP Fund Foreign Currency International Obligation International Equity International Alternative Investments Argentine peso $ $ 11, $ Australian dollar Bermudan dollar 5, Brazilian real 18, , Bulgarian lev 1, Canadian dollar , Cayman dollar 8, Chilean Peso 2, Chinese yuan , Colombian peso 13, Czech koruna 1, , Danish krone 7, Dominican Peso Egyptian pound 11, Euro 13, , , Hong Kong dollar 1, , Hungarian forint Indian rupee 11, , , Indonesian rupiah , Iraqi dinar Israel shekel Japanese yen 227, Jordanian dinar Kazakhstani tenge 1, Latvian lats Lithuanian litas M alaysian ringgit 4, , Mexican peso 24, , $ Moroccan dirham New Zealand dollar Nigerian naira 4, Norwegian krone 4, $ Pakistani rupee Panamanian balboa Peruvian nuevo sol 7, Phillippino peso , Polish zloty 14, Pound sterling 5, , $ 5, Qatari riyal 12, Romanian leu Russian ruble 6, , Singapore dollar , South African rand 7, , South Korean won , Swedish krona 2, , Swiss franc 93, $ 1, Taiwan dollar 149, Thai baht , Turkish lira 7, , UAE dirham 1, , Uruguay peso Venezuelan bolivar Total $ 156, $ 1,897, $ 43, At August 31, 2013, the exposures to foreign currency risk balances for Angelo State University were: International Obligations - $47,664.29; International Other Commingled Funds - $2,085,702.50; and International Externally Managed Investments - $218,

18 Unaudited 15 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Discrete Component Unit Fund Type GAAP Fund Foreign Currency International Obligation International Equity International Alternative Investments Argentine peso 2, $ 82, $ Australian dollar Bermudan dollar 35, Brazilian real 129, , Bulgarian lev 7, Canadian dollar 5, , Cayman dollar 55, Chilean Peso 18, Chinese yuan 4, ,470, Colombian peso 94, Czech koruna 7, , Danish krone 52, Dominican Peso Egyptian pound 85, Euro 92, ,261, , Hong Kong dollar 13, , Hungarian forint 4, Indian rupee 80, , , Indonesian rupiah 5, , Iraqi dinar Israel shekel 1, Japanese yen 1,640, Jordanian dinar Kazakhstani tenge 12, Latvian lats Lithuanian litas Malaysian ringgit 34, , Mexican peso 177, , $ 3, Moroccan dirham New Zealand dollar Nigerian naira 30, Norwegian krone 34, $ 3, Pakistani rupee Panamanian balboa Peruvian nuevo sol 53, Phillippino peso , Polish zloty 101, Pound sterling 39, ,130, $ 42, Qatari riyal 89, Romanian leu 3, Russian ruble 41, , Singapore dollar 6, , South African rand 55, , South Korean won 2, ,385, Swedish krona 17, , Swiss franc 674, $ 11, Taiwan dollar 1,074, Thai baht , Turkish lira 51, , UAE dirham 9, , Uruguay peso Venezuelan bolivar Total $ 1,092, $ 13,626, $ 315, At August 31, 2013, the exposures to foreign currency risk balances for the Discrete Component Unit were: International Obligations - $320,168.24; International Other Commingled Funds - $14,009,977.68; and International Externally Managed Investments - $1,465,

19 Unaudited 16 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Administration s investment policy limits fixed income securities held by the STIF to those issued by the U.S. or its agencies and instrumentalities. As of August 31, 2014, the credit quality distribution for securities with credit risk exposure was as follows: Standard & Poor's Fund GAAP Type Fund Investment Type AAA AAAf AA A BBB BB Unrated U.S. Government Agency Obligations $ 68, Corporate Obligations $ CMO's $ 1, International Obligations $ 2, $ 29, $ 80, $ 13, $ 30, Fixed Income Money Market and Bond Mutual Funds $ 42, $ 2,142, Discrete Component Unit Standard & Poor's Fund GAAP Type Fund Investment Type AAA AAAf AA A BBB BB Unrated U.S. Government Agency Obligations Corporate Obligations CMO's International Obligations $ 18, $ 209, $ 561, $ 91, $ 211, Fixed Income Money Market and Bond Mutual Funds $ 15,199, Concentration of credit risk is the risk of loss attributable to the magnitude of investment in a single issuer. As of August 31, 2014 the agency's concentration of credit risk is as follows. Fund Type GAAP Fund None Issuer Carry Value % of total portfolio The agency s credit quality distribution for securities with credit risk exposure as of August 31, 2013 was as presented below. Standard & Poor's Fund GAAP Type Fund Investment Type AAA AA A CMO's $ BBB BB Unrated International Obligations $ 1, $ 4, $ 26, $ 5, $ 10, Market and Bond Mutual Fund 1,030,248.01

20 Unaudited 17 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Discrete Component Unit Standard & Poor's Fund GAAP Type Fund Investment Type AAA AA A CMO's BBB BB Unrated International Obligations $ 8, $ 27, $ 175, $ 38, $ 70, Market and Bond Mutual Fund 6,932, Derivative Investing The Investment Policy Statement for the LTIF allows investment in certain derivative securities. A derivative security is a financial instrument which derives its value from another security, currency, commodity or index. The LTIF entered into futures contracts, options, and swaps as efficient substitutes for traditional securities, to reduce portfolio risks created by other securities, or in fully hedged positions to take advantage of market anomalies. These instruments involve market and/or credit risk in excess of the amount recognized in the Statement of Net Position. Risks arise from the possibility that counterparties will be unable to meet the terms of their contracts and from movement in index values. Futures contracts have reduced counterparty credit risk since they are exchange-traded and the exchange s clearinghouse, as counterparty to all exchange-traded futures, guarantees them against default. Counterparty risk for swaps and options is mitigated by master netting agreements between the Administration and its counterparties, and by the posting of collateral on a daily basis. The Administration s gross counterparty exposure, as of August 31, 2014, is presented below. Assets Liabilities Assets Liabilities Notional Notional Fair Value August 31, 2014 Fair Value August 31, 2014 Counterparty Rating Futures $ 2,696, $ 167, $ 22, $ 4, A Options $ 1,545, $ 934, $ 59, $ 47, A Total Return Swaps $ 251, $ - $ - $ A Securities Lending Angelo State University does not participate in a security lending program. The Agency had no securities out on loan to broker/dealers at August 31, NOTE 4: Short-Term Debt Angelo State University had no short-term debt as of August 31, NOTE 5: Long Term Liabilities Employees Compensable Leave A state employee is entitled to be paid for all unused vacation time accrued, in the event of the employee s resignation, dismissal, or separation from State employment, provided the employee has had continuous employment with the State for six months. Expenditures for accumulated annual leave balances are recognized in the period paid or taken in governmental fund types. For these fund types, the liability for unpaid benefits is recorded in the Statement of Net Position. An expense and liability for proprietary fund types are recorded in the proprietary fund as the benefits accrue to employees. No liability is recorded for non-vesting accumulating rights to receive sick pay benefits.

21 Unaudited 18 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 Changes in Long-Term Liabilities During the year ended August 31, 2014, the following changes occurred in liabilities: Business Type Balance Restatement/ Balance Amounts Due Amounts Due Activities 9/1/2013 Additions Reductions Adjustment 8/31/2014 Within One Year Thereafter Compensable Leave $ 2,102, $ 330, $ 73, $ $ 2,359, $ 330, $ 2,029, Commercial Paper Payable 3,132, ,500, , ,826, ,826, Revenue Bonds 70,790, ,370, (225,447.70) 68,195, ,865, ,329, Total $ 76,026, $ 1,830, $ 3,249, $ (225,447.70) $ 74,381, $ 6,022, $ 68,358, During the year ended August 31, 2013, the following changes occurred in liabilities: Business Type Balance Restatement/ Balance Amounts Due Amounts Due Activities 9/1/2012 Additions Reductions Adjustment 8/31/2013 Within One Year Thereafter Compensable Leave $ 2,057, $ 245, $ 201, $ $ 2,102, $ 245, $ 1,856, Commercial Paper Payable 3,946, , , ,132, ,132, Revenue Bonds 73,385, ,365, (230,005.52) 70,790, ,595, ,195, Total $ 79,390, $ 246, $ 3,395, $ (214,579.36) $ 76,026, $ 5,973, $ 70,052, Bonds Payable See Note 6 for detailed information on bond liability balances and transactions. Notes and Loan Payable Commercial paper was issued during the fiscal year to finance various construction and equipment projects. Debt service for the obligation is provided in general appropriation for tuition revenue bonds and revenue from various projects. All commercial paper outstanding at 8/31/14 will mature in fiscal year Commercial paper has short maturities up to 270 days with interest ranging from.08% to.18%. Summary of Debt Service Requirements to Maturity Year Ending August 31, 2014 Fiscal Year Principal Interest Total 2015 $3,826, $17, $3,844, All Other Years Total Requirements $3,826, $17, $3,844,183.14

22 Unaudited 19 NOTE 6: Bonded Indebtedness NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 On October 21, 1993, the governing board of the Texas Tech University System established a Revenue Financing System for the purpose of providing a financing structure for all revenue supported indebtedness of Texas Tech University System components. The source of revenues for debt service issued under the Revenue Financing System includes pledged general tuition, pledged tuition fee, pledged general fee and any other revenues, income, receipts, rentals, rates, charges, fees, including interest or other income, and balances lawfully available to Texas Tech University components. Excluded from the revenues described above are amounts received under Article 7, Section 17 of the Constitution of the State of Texas, general revenue funds appropriated by the Legislature except to the extent so specifically appropriated, encumbered housing revenues, and practice plan funds. Revenue Financing System Refunding and Improvement Bonds, 14th Series 2012A For refunding of $41,380,000 of Revenue Financing System Commercial Paper Notes Series A and a partial current refunding of $355,000 of Texas State University System Revenue Financing System Bonds Series 2002 representing ASU s portion. To provide new funding for the new ASU Plaza Verde Phase I Residence Hall & Dining Facilities and other University capital improvement projects. Original Issue Amount: $ 39,370,000 Issue Date: February 1, 2012 Interest Rates: 2.0% to 5.0% Date Range: 2012 through 2041 Type of Bond: Revenue Changes in Debt: $ 0 issued, $775,000 retired Revenue Financing System Refunding and Improvement Bonds, 12th Series 2009 Purpose: For advanced refunding of ASU portion of Texas State University System TRB bonds and construction of Centennial Village. Original Issue Amount: $35,630,000 Issue Date: March 3, 2009 Interest Rates: 3.00% to 5.25% Maturity Date Range: 2009 through 2038 Type of Bond: Revenue Changes in Debt: $0 issued, $1,595,000 retired Prior to September 1, 2007, all bonded indebtedness for Angelo State University ( Institution ) was issued through the Texas State University System ( TSUS ) Revenue Financing System ( RFS ), of which the System Administration and each component were members. The Board of Regents cross-pledged all lawfully available funds (revenues) and balances attributable to any RFS member against the bonded indebtedness of all other RFS members for payment on the Parity Debt. Effective September 1, 2007, House Bill 3564 (80th Legislature, Regular Session) transferred governance of the Institution to the Texas Tech University System ( Tech ); however, the Institution s revenues remain pledged to the RFS until TSUS can secure, from the new governing body (Tech), a legally acceptable agreement, assuming the Institution s obligations. On April 24, 2008, as authorized by House Bill 3564, the Texas Higher Education Coordinating Board, on the advice of the Texas Attorney General, issued a ruling and endorsed an Agreement obligation Tech to honor the Institution s bonded indebtedness. Tech signed and returned the agreement January 14, On January 23, 2009 Tech delivered to TSUS a $53,015,628 Board of Regents of Texas Tech University System Revenue Financing System Refund Note, Thirteenth Series

23 Unaudited 20 NOTES TO THE FINANCIAL STATEMENTS Year Ended August 31, 2014 (2008), dated September 15, 2008 securing the remaining TSUS debt attributable to Angelo State University. On April 24, 2009 Tech called $7,215,000 of TSUS debt reducing the TSUS debt balance attributable to the institution by $7,211, System Administration issued the debt; therefore, the bonds payable attributable to the institution are included with the Bonds Payable reported by System Administration. The institution must repay the debt that was issued on its behalf; consequently, the following debt amortization schedule is presented for informational purposes only. Debt Service Requirements Attributable To Angelo State University Description Year Principal Interest Total All Issues 2015 $ 2,780, $ 1,301, $ 4,081, ,626, ,228, ,855, ,756, ,097, ,853, ,367, ,752, ,119, ,835, ,092, ,927, ,870, ,034, ,904, ,125, , ,181, Totals $ 27,359, $ 10,563, $ 37,923, A portion of the debt represents Tuition Revenue Bonds historically funded by the Texas Legislature through General Revenue Appropriations. The institution was appropriated $3,959,056 during the current fiscal year for Tuition Revenue Bond debt service. The institution expects future Legislative appropriations to meet debt service requirements for Tuition Revenue Bonds. Pledged Future Revenues GASB Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, makes a basic distinction between sales of receivable and future revenues, on the one hand, and the pledging of receivables of future revenues to repay a borrowing (a collateralized borrowing), on the other. The following table provides the pledged future revenue information for Angelo State University s revenue bonds: Business-Type Activities FY 2014 FY 2013 Pledged Revenue Required for Future Principal and Interest on Existing Revenue Bonds $111,426, $116,974, Term of Commitment Year Ending 08/ Percentage of Revenue Pledged 100.0% 100.0% Current year Pledged Revenue $66,463, $72,901, Current year Principal and Interest Paid $5,547, $5,613, Pledged revenue sources: Business-type activities - Operating income from current unrestricted funds