Wilfrid Laurier University. Financial Statements April 30, 1999

Transcription

1 Financial Statements April 30,

2 July 30, PricewaterhouseCoopers LLP Chartered Accountants 55 King Street West Suite 900 Kitchener Ontario Canada N2G 4W1 Telephone +1 (519) Facsimile +1 (519) Auditors Report To the Board of Governors of Wilfrid Laurier University We have audited the statement of financial position of Wilfrid Laurier University as at April 30, and the statements of operations, change in net assets and cash flows for the year then ended. These financial statements are the responsibility of the University s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the University as at April 30, and the results of its operations and its cash flows for the year then ended in accordance with generally accepted accounting principles. Chartered Accountants PricewaterhouseCoopers LLP is a Canadian member firm of PricewaterhouseCoopers International Limited, an English company limited by guarantee.

3 Statement of Financial Position As at April 30, Assets Current assets Cash 1,948 Short-term deposits Accounts receivable 1,838 1,570 Stocks, bonds and debentures (note 4) 2,886 1,391 Inventories 1,140 1,089 Prepaid expenses Deposit on purchase of capital assets 22 1,723 Current portion of notes receivable (note 3) ,042 6,844 Long-term assets Notes receivable less current portion (note 3) 2,220 2,351 Deferred pension 1, ,120 3,051 Restricted assets Cash and short-term investments 3,359 Stocks, bonds and debentures (note 4) 9,969 10,287 Hedge fund investment (note 11) 2,298 Guaranteed investment certificates 77 15,626 10,364 Capital assets (notes 5 and 13) 77,524 72,557 Sinking fund investments ,890 72,896 Total assets 106,678 93,155

4 Statement of Financial Position As at April 30, Liabilities Current liabilities Bank overdraft 889 Accounts payable 4,296 3,639 Accrued vacation pay 1,725 1,499 Deferred revenue 1, Current portion of mortgages payable (note 6) Current portion of term bank loans ,602 7,295 Long-term liabilities Mortgages payable (note 6) 18,044 13,219 Term bank loans 685 1,363 Other loans 181 Other contractual liabilities 1,684 1,627 20,594 16,209 Deferred contributions (note 7) 4,628 3,022 Deferred capital contributions (note 8) 27,039 27,513 Total liabilities 60,863 54,039 Net assets Unrestricted (2,766) (1,963) Internally restricted (note 9) 5,104 3,862 Invested in capital assets (note 10) 27,851 26,853 Endowments (note 11) 15,626 10,364 Total net assets 45,815 39,116 Total liabilities and net assets 106,678 93,155 Signed on behalf of the Board of Governors

5 Statement of Operations For the year ended April 30, Revenue Government grants 32,492 32,317 Student fees 36,926 32,067 Grants, contracts, and donations 3,094 3,006 Sales and service 7,284 6,545 Amortization of deferred capital contributions 1,370 1,281 Investment returns 1, Other revenues and additions 1,254 1,076 Pension income (note 14) 1, ,724 77,960 Expenses Salaries and benefits 51,777 50,638 Operating costs 11,452 10,556 Amortization of capital assets 5,653 5,567 Cost of goods sold 5,564 4,975 Taxes, utilities and rent 2,670 2,528 Scholarships and bursaries 3,983 2,048 Interest 1,948 1,773 Loss on disposal of capital assets ,072 78,141 Excess of revenue over expenses (expenses over revenue) 1,652 (181)

6 Statement of Change in Net Assets For the year ended April 30, Restricted Internally Invested in for Unrestricted restricted capital assets endowment Total Total Balance Beginning of year (1,963) 3,862 26,853 10,364 39,116 37,628 Excess (deficiency) of revenue over expenses 5,960 (4,308) 1,652 (181) Internally imposed restrictions (1,484) 1, Endowment contributions (note 11) 5,020 5,020 1,645 Investment in capital assets (5,279) 5, Balance End of year (2,766) 5,104 27,851 15,626 45,815 39,116

7 Statement of Cash Flows For the year ended April 30, Cash provided by (used in) Operating activities Excess (deficiency) of revenues over expenses 1,652 (181) Amortization of deferred capital contributions (1,370) (1,281) Amortization of capital assets 5,653 5,567 Net change in non-cash working capital (note 15) 3,266 (2,202) Increase in deferred contributions 1, Loss on disposal of capital assets Increase in deferred pension asset (1,200) (700) 9,632 1,882 Financing and investing activities Endowments received 5,020 1,645 Increase (decrease) in notes receivable 191 (11) Increase (decrease) in bank term loans (230) 1,167 Increase in other loans 181 Purchase of capital assets (note 12) (10,645) (6,089) Purchase of sinking fund investment (87) Purchase of endowment investments (5,262) (1,986) Increase in contractual liabilities Deferred capital contributions received Increase in (repayment of) mortgages net 4,605 (118) (5,187) (4,681) Net increase (decrease) in cash and cash equivalents 4,445 (2,799) Cash and cash equivalents Beginning of year 720 3,519 Cash and cash equivalents End of year 5, Cash and cash equivalents consist of Cash 1,948 Short-term deposits Stocks, bonds and debentures 2,886 1,391 Bank overdraft (889) 5,

8 April 30, 1 Description Wilfrid Laurier University was established in November 1973 as a fully provincially assisted university when Waterloo Lutheran University became Wilfrid Laurier University after Bill 178 "an Act respecting Wilfrid Laurier University" was given Royal Assent. The university is dedicated to the pursuit of learning through scholarly research, teaching, study, and artistic activity, all within a spirit of free inquiry. These financial statements reflect the assets, liabilities, net assets, revenues, expenses, and other transactions related to the operation of the University. Accordingly, these financial statements include the academic, administrative, and other operating expenditures funded by fees, grants, and other general revenue, restricted purpose endowment funds and the ancillary operations such as residences, food service, bookstore, and parking. Wilfrid Laurier University has an economic interest in a Crown controlled foundation, Wilfrid Laurier Foundation, which is not consolidated. The principal purpose of the Wilfrid Laurier University Foundation is to solicit, receive, and distribute monies to support the activities of the University. Wilfrid Laurier University is a registered charity and as such is exempt from paying income taxes. 2 Accounting policies Valuation of inventories Inventories are valued at the lower of cost and net realizable value with cost being determined substantially on a first-in, first-out basis. Capital assets Capital assets include the original cost of land and land improvements, buildings, furniture and equipment, and library books. The capital assets, excluding land, are amortized on a straight-line basis in accordance with the following schedule: Category Amortization Rate Buildings 2 ½% Furniture and equipment 10 20% Leasehold improvements 20% Library books 20% Valuation of stocks, bonds and debentures All securities are recorded at cost (1)

9 April 30, Art collection The University maintains a collection of art work of cultural and historical significance. The collection is not capitalized but rather included in capital assets at nominal value on the statement of financial position. New acquisitions, substantially all received as gifts, are recorded as income and expense at their appraised value in the period received. Revenue recognition The University follows the deferral method of accounting for contributions which include donations and government grants. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Contributions externally restricted for purposes other than endowment or the acquisition of capital assets are deferred and recognized as revenue in the year in which the related expenses are recognized. Contributions restricted to the acquisition of capital assets having a limited life are initially recorded as deferred capital contributions in the period in which they are received. They are recognized as revenue over the useful life of the related assets. Endowment contributions are recognized as direct increases in net assets in the period in which they are received. Student fees are recognized as revenue when courses and seminars are held. Sales and services revenue is recognized at point of sale or when the service has been provided. Pensions The University has a pension plan which is available to full and part time faculty and staff. The plan is a money purchase plan with a minimum guarantee supplement based on the member's best five years of earnings. The cost of pension benefits earned by employees is determined using the projected benefit method prorated on service and is charged to operations as services are rendered. The annual cost or income for accounting purposes is actuarially determined based on the assumptions that reflect management's best estimate of the economic variables affecting the actuarial present value of accrued pension obligations and the valuation of pension plan assets. Adjustments to pension costs are amortized on a straight-line basis over twelve years. Post employment benefits The University provides dental and extended health care benefits for the retirees. These premium costs are expensed as paid. The cost for the current year was 231 ( - 209). (2)

10 April 30, Financial instruments At April 30,, the carrying amounts reported in the balance sheet for accounts receivable, notes receivable, hedge fund investment, sinking fund investments, deposit on purchase of capital assets, accounts payable, accrued vacation pay, term bank loans, other loans and other contractual liabilities approximate fair market value. The market value of stock, bonds and debentures has been reported in note 4. The carrying value and approximate fair market value of mortgages payable are 18,314 and 21,700 respectively ( 13,709 and 16,700) 3 Notes receivable The notes receivable are from the Wilfrid Laurier University Student Union and the Wilfrid Laurier University Graduate Student Association. The details of the notes are as follows: Wilfrid Laurier University Students Union 6% note, repayable by quarterly payments of 50 including principal and interest, due August 1, ,041 1,215 6% note payable, interest commencing May 1, 2005, 50 semiannual payments, commencing after repayment of the note detailed above % note, repayable by quarterly payments of 8 including principal and interest, due November 1, % note, repayable interest only paid quarterly with principal payments of 50 quarterly commencing November 1, 2005, due November 1, ,144 2,361 Wilfrid Laurier University Graduate Student Association 6% note, repayable by quarterly payments of 4 minimum, including principal and interest ,320 2,511 Less principal due within one year ,220 2,351 (3)

11 April 30, 4 Stocks, bonds and debentures The cost and market value of stocks, bonds and debentures included in current assets and restricted assets as at April 30, is 12,855 and 12,821 respectively ( 11,678 and 12,179). The current year cost of stocks, bonds and debentures includes 2,886 of current assets and 9,969 of restricted assets. 5 Capital assets Accumulated Accumulated Cost Depreciation Net Cost Depreciation Net Land and land improvements 6,053 6,053 5,853 5,853 Buildings 88,466 26,864 61,602 81,485 24,525 56,960 Furniture and equipment 26,319 19,959 6,360 25,174 18,592 6,582 Leasehold improvements Library books 10,413 7,085 3,328 8,953 5,791 3,162 6 Mortgages payable 131,432 53,908 77, ,465 48,908 72,557 Security Rate Due date Bricker Street Residence 11.04% November 1, ,000 10,000 Conrad Hall, A & B Wings 5 3/8% January 1, Dining Hall, MacDonald House 5 1/8% March 2, Willison Hall, Conrad Hall, C Wing 5 1.8% January 1, Conrad Hall D Wing, Little House, Euler Residence, Leupold Residence, Dining Hall 5 3.8% July 1, ,312 1,354 Bouchaert Hall Nil Discharged Regina Street 6.91% November 29, Regina Street and 50 University Place 5.465% December 20, ,945 18,314 13,709 Less: principal payable within one year ,044 13,219 (4)

12 April 30, The aggregate amount of principal payments in each of the next five years to meet retirement provisions is as follows. It is assumed that the 202 Regina Street and 50 University Place mortgage will be renewed on similar terms in fiscal Year ending April 30, Deferred contributions 1,510 Deferred contributions which are subject to externally imposed restrictions consist of the following: Research grants 1,843 1,571 Scholarships and bursaries Other amounts 1,809 1,067 8 Deferred capital contributions 4,628 3,022 Deferred capital contributions consist of the unamortized amount of donations and grants received for the purchase of capital assets. These amounts are recorded as income of the University over the same period as the amortization expense for the specific capital asset. The change in the balance consists of the following: Balance beginning of year 27,513 28,044 Add contributions received during the year Less amortization for the year (1,370) (1,281) Balance end of year 27,039 27,513 (5)

13 April 30, 9 Internally restricted net assets Details of the internally restricted net assets are as follows: Program development 640 1,240 Departmental carry forwards 1,094 1,013 Future pension costs 1, Access to Opportunities Program 288 University Plan Initiatives /99 deficit 238 Food service 700 Residences 237 Bookstore, Purple & Gold, and parking 155 Residence improvement 3 3 Repairs, renovations and major improvements ancillaries 542 Major capital equipment Repairs operating Investment in capital assets The investment in capital assets consists of the following: 5,104 3,862 Capital assets net book value (see note 5) 77,524 72,557 Plus sinking fund investments held to discharge long-term debt ,890 72,896 Less amounts financed by long-term debt 19,857 15,301 deferred capital contributions 27,039 27,513 internal advances 3,143 3, Endowments 27,851 26,853 Endowments include restricted donations received by the University and endowments restricted internally by the Board of Governors. The University endowment policy has the objective of protecting the value of the endowed principal by limiting spending of investment income earned on endowments. The balance of investment income is recorded as an increase in the endowment balance. (6)

14 April 30, The details of the endowments are as follows: Endowments restricted externally 10,424 5,244 Endowments restricted internally 5,202 5,120 15,626 10,364 During the year the University received as restricted endowment contributions, units of the Northern Star Hedge Fund I valued at 2,298 at the date of receipt. This valuation was determined by an independent professional firm. The Fund is a twenty-year closed-end investment trust with distribution of income only over the twenty year period. The endowment earnings, and the disposition of these earnings can be summarized as follows: Total earnings Disposition of earnings Used to fund the academic development program Used to fund endowed scholarships and bursaries Used to maintain purchasing power of endowments Additions to capital assets The additions to capital assets consist of the following: Willison Hall Residence addition Regina Street building Furniture and equipment 2,890 1, University Place 4,718 Brantford Campus renovation costs 181 Tri University library computer system Graduate student building 385 Library books 1,460 1,252 Elevator, heating, ventilating and air conditioning upgrade 232 King Street building Energy management project 1, and 205 Regina Street apartments 402 Athletic complex renovation 106 Other ,645 6,089 (7)

15 April 30, 13 Insurance The University entered into a reciprocal insurance arrangement with other Canadian universities and the Canadian University Reciprocal Insurance Exchange. The Exchange provides property and general liability insurance coverage and replaces the coverage previously obtained through commercial sources. The University is committed to a five year program which continues until January 1, During this time the University is obligated to share proportionately in gains or losses realized by the member universities. The University insures its capital assets for the following amounts: Buildings 166,544 Furniture and equipment 31,631 Library books 93,365 Total 291, Pension plan The last actuarial valuation report was July 1, 1997 and was based on projections of employees compensation levels to the time of retirement. At that time the plan had a funding surplus of 18,593. Since that report, estimates prepared by consulting actuaries indicate that the present value of the accrued pension benefits and the net assets available to provide for these benefits, at market value, as at April 30, are as follows: Accrued pension benefits 155, ,280 Pension fund assets 171, ,583 Pension income recorded during the year is 1,200 ( 700). (8)

16 April 30, 15 Statement of cash flows The change in the non-cash working capital balances consists of the following: Accounts receivable (268) (842) Inventories (51) (15) Prepaid expenses (84) (100) Deposit on purchase of capital assets 1,701 (1,320) Accounts payable 657 (116) Accrued vacation pay Deferred revenue 1, Ontario Student Opportunity Trust Fund 3,266 (2,202) Externally restricted endowments include grants provided by the Government of Ontario from the Ontario Student Opportunity Trust Fund. Under the program the government matched funds raised by the University. The purpose of the program is to assist academically qualified individuals who, for financial reasons, would not otherwise be able to attend university. Endowment balance beginning of year 2,618 1,079 Donations received 1, Matching funds from the Government of Ontario 1, Investment income capitalized Endowment balance end of year 4,664 2,618 Expendable funds beginning of year Investment income Bursaries awarded (70) (5) Expendable funds end of year (9)

17 April 30, (in thousands of dollars, except note 20) 17 Subsequent events In June of, the University acquired a housing complex to be used as a student residence. This acquisition, after renovations, will cost approximately 7,800 and will be financed mainly by a first mortgage of 7,000 on the property. As at April 30,, the University had spent 872 on an addition to a student residence. The total project, which is to cost 2,300, will be financed by a term bank loan. 18 Contingency The University is the defendant in a number of legal proceedings. Claims against the University in these proceedings have not been reflected in these financial statements. It is the opinion of the administration that the resolution of these claims will not have a material effect on the financial position of the University. 19 Uncertainty due to the Year 2000 Issue The Year 2000 Issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in some systems which use certain dates in to represent something other than a date. The effects of the Year 2000 Issue may be experienced before, on, or after January 1, 2000, and, if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. The University has implemented a program to assure that all computer systems are Year 2000 compliant. In addition, a formal review of all other University systems is being undertaken with the objective of identifying and implementing appropriate solutions prior to January 1, Even with these efforts, it is not possible to be certain that all aspects of the Year 2000 Issue affecting the entity, including those related to the efforts of customers, suppliers, or other third parties, will be fully resolved. 20 Public sector salary disclosure In accordance with provisions of the Public Sector Salary Disclosure Act, the following employees of the University received salaries of 100,000 or more in the calendar year. Name Position Salary Taxable Benefits Amaoku-Adu, Ben Professor 114, Athanassakos, George Associate Professor 106,833 1,201 Baetz, Mark Professor 100, Baker, Donald Acting Dean 147, Bennett, Edward Professor 105, Berczi, Andrew Professor 176, (10)

18 April 30, Name Position Salary Taxable Benefits Bezner, Hart Associate Professor 100,741 2,706 Blackburn, James Professor 107, Blenhorn, David Professor 105, Boot, Barry Professor 101,813 4,366 Borras, Angelo Professor 105, Carson, A. Scott Dean 100, Clarke, Juanne Professor 114, Copp, J. Terry Professor 105, Ellis, Robert Associate Dean 100, Fisher, James Professor 104, Fournier, Bruce Associate Professor 124, Friesen, Gerhard Professor 100,306 2,595 Fusco, Luke Associate Professor 111, Gillen, David Professor 106, Guenther, Mathias Professor 100,776 3,457 Hall, Anne Dean 121, Hall, Jerry Associate Professor 119,013 1,935 Hanna, Edward Professor 100, Hewitt, Kenneth Professor 107, Hurn Mather, Jannah Dean 124, Kott, Edward Professor 103, Laurence, Marty Professor 100, Lit, John Professor 108, Marr, William Professor 106, McDougall, Gordon Professor 115, McMenemy, John Professor 115, McPherson, Barry Dean 144, Millerd, Frank University Secretary 112, Muncaster, Russell Professor 125, Murray, J. Alex Professor 137, Nelson, Morton Professor 102, Noori, Hamid Professor 105, Raj, Baldev Professor 106, Read, Arthur Director of Brantford Project 143,577 1,068 Rodrigo, Russell Professor 103,341 1,003 Rosehart, Robert President 213,015 5,192 Schnabel, Jacques Professor 109, Smith, Rowland Vice-President 153, Stack, Stephen Associate Professor 100, Stephen, Arthur Vice-President 114, Teall, Howard Acting Dean 116,763 3,787 Wong, Philip Assistant Vice-President 123, (11)

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