Dakota State University

Transcription

1 Dakota State University Financial Report 2012

2 DAKOTA STATE UNIVERSITY FINANCIAL REPORT FOR THE YEAR ENDING JUNE 30, 2012 TABLE OF CONTENTS Management s Discussion and Analysis 1-6 Statement of Net Assets 7 Statement of Financial Position (DSU Foundation) 8 Statement of Revenues, Expenses, and Changes in Net Assets 9 Statement of Activities and Changes in Net Assets (DSU Foundation) Statement of Cash Flows 12 Statement of Cash Flows (DSU Foundation) 13 Notes to Financial Statements Notes to Financial Statements (DSU Foundation) 21-31

3 Management s Discussion and Analysis DAKOTA STATE UNIVERSITY Financial Report For The Year Ending June 20, 2012 This section of Dakota State University s annual financial report presents management s discussion and analysis of the University s financial operations during the fiscal year ended June 30, The discussion and analysis should be read in conjunction with the accompanying financial statements and footnotes. The accuracy of the financial statements, footnote disclosures and discussion are the responsibility of University management. Reporting Entity Dakota State University is one of six public universities under the control of the South Dakota Board of Regents. The public universities are considered a component unit of the State of South Dakota and are reported as such in the State s comprehensive annual financial report. The financial operations of Dakota State University are audited as a part of the State of South Dakota. An audit opinion is not issued on the individual statements of the University, but rather on the audited Comprehensive Annual Financial Report of the State of South Dakota. Using the Annual Report The accompanying statements have been prepared in accordance with Governmental Accounting Standards Board (GASB) Statement No. 35, Basic Financial Statements and Management s Discussion and Analysis for Public Colleges and Universities. The statements required by GASB include the Statement of Net Assets, Statement of Revenues, Expenses and Changes in Net Assets, and the Statement of Cash Flows. The statements are prepared under the accrual basis of accounting where revenues are recognized when the service is provided and expenses are recognized when a liability is incurred regardless of when the exchange of cash takes place. The Statement of Net Assets reports the difference in assets and liabilities and is one way of measuring the University s financial position. Non-financial measurements such as enrollment and condition of the facilities serving the students should also be taken into consideration. The Statement of Revenues, Expenses and Changes in Net Assets presents revenues earned and expenses incurred during the year. Revenues and expenses are considered operating or non-operating. In accordance with GASB requirements, state appropriations have been classified as non-operating revenues resulting in a net operating loss being reported. The financial statements also include an allowance for depreciation expense, which is the amortization of the cost of a capital asset over its estimated useful life. Page 1

4 The Statement of Cash Flows presents information related to cash inflows and outflows. These transactions are classified as operating, non-operating, capital and investing activities. Financial Highlights From the prior year, current assets increased $457,000, 5.8%. The main increase is cash balances as the University makes an effort to increase reserves for fluctuations in enrollment and enhanced program offerings. Non-current assets increased $378,000, 1.5%. Most of the increase is from the net change in capital assets of $310,000. This is a result of a $2,721,000 increase in infrastructure offset by a decrease of $1,622,000 in construction in progress and $791,000 decrease in buildings and improvements. Total liabilities decreased by $226,000, 1.6%, between FY11 and FY12. An increase in current liabilities of $255,000 was offset by a decrease in noncurrent liabilities. The biggest changes were a $386,000 increase in accounts payable, a decrease of $348,000 in obligations under capital leases, and a decrease of $343,000 in bonds payable. Condensed Statement of Net Assets as of June 30, 2012 and 2011 FY 2012 FY 2011 Assets Current Assets $ 8,413,067 $ 7,955,305 Noncurrent Assets $ 26,537,530 $ 26,159,035 Total Assets $ 34,950,597 $ 34,114,340 Liabilities Current Liabilities $ 3,504,192 $ 3,248,686 Noncurrent Liabilities $ 10,303,084 $ 10,784,936 Total Liabilities $ 13,807,276 $ 14,033,622 Net Assets Invested in Capital, Net of Related Debt $ 17,807,724 $ 17,168,084 Restricted $ 819,125 $ 801,197 Unrestricted $ 2,516,472 $ 2,111,437 Total Net Assets $ 21,143,321 $ 20,080,718 Investment in capital assets represents the depreciated balance of buildings, land improvements and infrastructure, and equipment. Assets restricted for loans, grants and debt service represent assets that the University may only use for allowable activities related to each of those funds. Unrestricted assets may be used for the general operations of the University. Page 2

5 Condensed Statement of Revenues, Expenses and Changes in Net Assets as of June 30, 2012 and 2011 FY 2012 FY 2011 Operating Revenues $ 25,883,352 $ 24,236,112 Operating Expenses $ 34,679,218 $ 31,351,083 Operating Loss $ (8,795,865) $ (7,114,971) Non-Operating Revenues $ 8,854,312 $ 9,333,235 Non-Operating Expenses $ 685,495 $ 441,395 Non-Operating Income $ 8,168,818 $ 8,891,840 Net Loss/Income $ (627,047) $ 1,776,869 Capital Contributions $ 1,628,475 $ 2,744,448 Increase (Decrease) in Net Assets $ 1,001,428 $ 4,521,317 Net Assets, Beginning of Year $ 20,080,718 $ 15,697,604 Prior period adjustment $ 61,176 $ (138,203) Net Assets, End of Year $ 21,143,321 $ 20,218,921 Operating revenues increased $1,647,000, 6.8% in FY12. Operating revenues are those revenues the university earns through its operation, such as tuition, fees, auxiliary services, and grants and contracts. Self support revenue increased by $575,000. This consists of revenue from courses taught at the University Center in Sioux Falls and online. State support revenue increased by $191,000. Total fees decreased by $216,000 while federal grants and contracts increased by $1,025,000. Non-operating revenues are revenues realized through appropriations or non-operating activities such as investment income. Non-operating revenues decreased by $479,000. General funds increased by $354,000 and ARRA stabilization funds decreased by $808,000. Operating expenses increased by $3,328,000 with $1,423,000 of that in public service mainly due to federal contracts. Page 3

6 The following is an illustration of revenues by source for the year ended June 30, 2012: General Fund, 23.0% HEFF, 0.7% Capital Related Activities, 4.5% Other, 0.7% Private Grants & Contracts, 3.7% State Grants & Contracts, 3.7% Federal Grants & Contracts, 18.5% Tuition and Fess, 35.6% Auxiliaries, 9.2% General Sales & Services, 0.4% Below is a review of the expenses by the National Association of College and University Business Officers expenditure categories. NACUBO Expenditure FY12 FY11 Instruction $ 12,019,940 $ 11,904,201 Research $ 1,269,593 $ 957,348 Public Service $ 3,183,650 $ 1,760,715 Academic Support $ 2,911,686 $ 3,013,982 Student Services $ 3,439,362 $ 2,809,452 Institutional Support $ 3,257,126 $ 2,905,442 O&M Plant $ 3,489,349 $ 2,991,377 Scholarships & Fellowships $ 1,734,506 $ 1,859,553 Auxiliaries Enterprises $ 3,374,006 $ 3,149,013 Total $ 34,679,218 $ 31,351,083 Page 4

7 The following is an illustration of expenses for the year ended June 30, 2012: Scholarships & Fellowships 5.0% O&M Plant 10.1% Auxiliaries Enterprises 9.7% Instruction 34.7% Institutional Support 9.4% Student Services 9.9% Academic Support 8.4% Research 3.7% Public Service 9.2% Condensed Statement of Cash Flows For the year ended June 30, 2012 FY2012 FY2011 Cash Provided by (Used in): Operating Activities $ (6,765,310) $ (5,753,299) Non Capital Financing Activities $ 8,491,716 $ 9,268,825 Capital and Related Financing Activities $ (1,367,327) $ (2,130,634) Investing Activities $ 68,025 $ 111,066 Net Increase (Decrease) in Cash $ 427,104 $ 1,495,958 Cash and Cash Equivalents, Beginning of the Year $ 6,315,067 $ 4,819,109 Cash and Cash Equivalents, End of the Year $ 6,742,171 $ 6,315,067 The Statement of Cash Flows presents information related to cash inflows summarized by operating, non-capital financing, capital financing and related investing activities. This helps measure the ability to meet financial obligations as they mature. Major sources of cash include: 1) funds from students for tuition, fees, auxiliaries, and federal grants, $21 million, in the operating activities category, and 2) general appropriations, $8 million, in the non capital financing activities. The largest payments were for salaries and benefits, $19 million, and payments to vendors for contracted services and supplies, $5.2 million. Page 5

8 The following is an illustration of cash balances as of June 30, 2012: $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 ($1,000,000) ($2,000,000) Plant Restricted Unrestricted Total Unrestricted cash on hand as of June 30 each year is used for summer salaries, benefits and monthly operating expenses. Cash receipts during the summer are relatively low so the university must maintain a sufficient cash balance to meet obligations until proceeds from tuition and fees are received in the fall. Restricted cash can only be used in accordance with the source of the cash and grant funds are typically received on a reimbursement basis. Plant funds are to be used for long-term maintenance of revenue buildings and not for normal dayto-day operating expenses. Enrollment Information Dakota State University s Fall headcount remained stable and full-time equivalent enrollment decreased slightly by 1% over the prior year. 3,500 3,000 2,500 2,000 1,500 1,000 FTE Headcount Page 6

9 DAKOTA STATE UNIVERSITY STATEMENT OF NET ASSETS JUNE 30, 2012 FY 2012 FY 2011 ASSETS Current Assets Cash on Deposit - State Treasurer 6,220, ,811, Other Cash and Temporary Investments 49, , Accounts Receivable - Students 377, , Accounts Receivable 135, , Notes Receivable 293, , Interest Receivable 57, , Prepaid Expenses and Deferred Charges 29, , Inventory 223, , Due From Federal Sources 841, , Due From Primary Government 186, , Due From Component Unit , Total Current Assets 8,413, ,955, Non-Current Assets Restricted Cash on Deposit - State Treasurer (Debt Service) 473, , Notes Receivable 1,441, ,391, Land 89, , Land Improvements, Net 415, , Infrastructure, Net 2,721, Buildings and Building Improvements, Net 20,275, ,066, Equipment and Other Property, Net 1,120, ,088, Construction in Progress ,622, Total Non-Current Assets 26,537, ,159, TOTAL ASSETS 34,950, ,114, LIABILITIES Current Liabilities Accounts Payable 1,436, ,050, Accrued Wages and Benefits 384, , Accrued Interest Payable 29, , Compensated Absences Payable 552, , Bonds Payable, Net of Unamortized Amount 343, , Obligations Under Capital Leases, Non Capital 517, , Deferred Revenue 72, , Due to Primary Government 18, , Due to Other Component Unit 9, , Student Deposits 60, , Agency Funds - Funds Held for Others 78, , Total Current Liabilities 3,504, ,248, Non-Current Liabilities Compensated Absences Payable 1,461, ,377, Bonds Payable, Net of Unamortized Amount 6,471, ,815, Obligations Under Capital Leases, Non Capital 151, , Federal Capital Contributions Advance 2,218, ,218, Total Non-Current Liabilities 10,303, ,784, TOTAL LIABILITIES 13,807, ,033, NET ASSETS Invested in Capital, Net of Related Debt 17,807, ,168, Restricted Nonexpendable Expendable Debt service 473, , Other 346, , Unrestricted 2,516, ,111, TOTAL NET ASSETS 21,143, ,080, TOTAL LIABILITIES AND NET ASSETS 34,950, ,114, Page 7

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11 DAKOTA STATE UNIVERSITY STATEMENT OF REVENUES, EXPENSES, AND CHANGE IN NET ASSETS JUNE 30, 2012 FY 2012 FY 2011 OPERATING REVENUES Tuition & Fees State Support 3,111, ,919, Self Support 6,445, ,870, Total Tuition 9,556, ,789, Fees 5,566, ,782, Total Tuition and Fees 15,123, ,572, Student Financial Assistance (2,160,662.71) (2,220,121.55) Tuition and Fees Net of Student Financial Assistance 12,962, ,351, Auxiliaries 3,335, ,325, General Sales & Services 154, , Contracts & Grants - Federal 6,714, ,688, Contracts & Grants - State 1,360, ,383, Contracts & Grants - Private 1,334, ,334, Student Loan Interest 20, , Other Revenues and Additions TOTAL OPERATING REVENUES 25,883, ,236, OPERATING EXPENSES Personal Services 20,128, ,297, Travel 640, , Contractual 7,117, ,336, Supplies and Materials 3,347, ,913, Grants 1,784, ,818, Loan Cancellation Expense 72, , Badt Debt 5, , Depreciation 1,582, ,430, TOTAL OPERATING EXPENSES 34,679, ,351, TOTAL OPERATING INCOME/(LOSS) (8,795,865.14) (7,114,970.93) NON-OPERATING REVENUES General Fund Appropriations 8,350, ,995, ARRA Stabilization Appropriation , School & Public Lands 173, , HEFF 269, , Investment Income 60, , TOTAL NON-OPERATING REVENUES 8,854, ,333, NON-OPERATING EXPENSES Interest Expense on Bonds 300, , Other (community center payment to BOR) 123, , Loss on disposal of assets , Contributed Services 261, TOTAL NON-OPERATING EXPENSES 685, , TOTAL NON-OPERATING REVENUES/(EXPENSES) 8,168, ,891, INCOME BEFORE OTHER REVENUES, EXPENSES, GAINS OR LOSSES (627,047.48) 1,776, CAPITAL HEFF , South Dakota Building Authority 1,628, ,434, NET ASSETS: NET ASSETS - BEGINNING OF THE YEAR 20,080, ,697, Prior Period Adjustments 61, (138,203.09) NET ASSETS - END OF THE YEAR 21,143, ,080, Page 9

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14 DAKOTA STATE UNIVERSITY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2012 CASH FLOWS FROM OPERATING ACTIVITIES FY 2012 FY 2011 Tuition, Fees, & Auxiliaries (Net of Scholarship allowance & discounts) 16,297, ,677, General Sales & Services 286, , Federal Grants & Contracts 6,528, ,255, State Grants and Contracts 1,289, ,320, Private Grants & Contracts 561, ,376, Other Student Loan Interest 20, , Personal Services (salaries & benefits) (20,047,934.14) (19,133,618.73) Travel (640,231.37) (459,522.05) Contractual (7,184,528.05) (5,239,675.73) Supplies & Materials (2,826,574.56) (2,958,693.79) Grants (1,784,702.02) (1,818,548.49) Perkins Loans Colelcted from Students 0.00 (16,581.42) Net cash provided (used) by Operating Activities (7,498,942.00) (5,753,299.48) CASH FLOWS FROM NONCAPITAL FINANCIAL ACTIVITIES General Fund Appropriations 8,350, ,995, ARRA Stimulus Funds , School & Public Lands 173, , HEFF 269, , Direct Loan Receipts 10,684, ,618, Direct Loan Disbursements (10,684,699.00) (10,618,484.00) Net Cash Flows Provided by Noncapital Financing Activities 8,793, ,268, CASH FLOWS FROM CAPITAL RELATED FINANCING ACTIVITIES HEFF , Community Center Payments to Board of Regents (123,362.72) (123,128.99) Principal Paid on Indebtedness (678,740.70) (588,436.08) Interest on Indebtedness (424,007.87) (312,252.00) Purchase of Capital Assets (1,893,053.96) (3,851,264.62) South Dakota Building Authority 1,628, ,434, Net Cash Used by Capital and Related Financing Activities (1,490,690.16) (2,130,633.52) CASH FLOWS FROM INVESTING ACTIVITIES 68, , Net cash Provided (used) (128,189.14) 1,495, Cash - Beginning of the year 8,635, ,139, Cash - End of the year 8,507, ,635, RECONCILIATION OF NET OPERATING REVENUES/(EXPENSES) TO NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES OPERATING INCOME (LOSS) (9,494,897.14) (7,114,970.93) Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation, Bad Debt, and Loan Cancellation Expense 1,599, ,496, Change in Assets and Liabilities: Accounts Receivable (223,921.70) (408,938.84) Inventory 80, (63,634.75) Accounts Payable 460, , NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES (7,578,116.18) (5,753,299.48) Page 12

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16 DAKOTA STATE UNIVERSITY NOTES TO THE FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies A. Basis of Presentation: The financial statements have been prepared and are presented as required by GASB Statement No. 34, Basic Financial Statements and Management Discussion and Analysis for State and Local Governments and GASB Statement No. 35, Basic Financial Statements and Management s Discussion & Analysis for Public Colleges and Universities. The financial statement presentation required by GASB provides a comprehensive, entity-wide perspective of the University s assets, liabilities, net assets, revenues, expenses, changes in net assets, cash flows, and replaces the fund-group perspective previously required. GASB Statement No. 39, Determining Whether Certain Organizations Are Component Units, was implemented for fiscal year The provisions of this statement determined that the Dakota State University Foundation should be reported as a component unit of the university and the Foundation Statements have been presented following the statements of the university. B. Reporting Entity: Dakota State University is one of six public institutions of higher education governed by the South Dakota Board of Regents. The University is a component unit of the State of South Dakota and is included in the general-purpose financial statements of the State of South Dakota. C. Basis of Accounting: The University has adopted the accrual basis of accounting for preparing its annual financial statements as required by generally accepted accounting principles. Under the accrual basis of accounting, revenue is recognized when earned and expenditures when an obligation is incurred. For reporting purposes, the University is considered a special-purpose government engaged only in business-type activities. D. Fund Accounting: In order to insure observance of the limitations and restrictions placed on the use of the resources available to the University, the accounts of the University are maintained according to the principles of fund accounting. This is the procedure by which resources for various purposes are classified for accounting and reporting purposes into fund accounts that are maintained in accordance with activities or objectives specified by donors, governmental appropriations, granting agencies, and other outside sources or regulations. Separate accounts are maintained for each fund; however, in the accompanying statements, all funds have been combined for reporting purposes. E. Accounts Receivable: Accounts Receivable consists of funds owed to various University departments from external sources. Accounts receivable include funds owed from students for tuition & fee charges as well as expenditures made on grants for which reimbursement has not been received. The University used the direct write-off method for uncollectible receivables. Page 14

17 F. Notes Receivable: Notes receivable consist of those receivables in connection with the Perkins Loan program. G. Investments: Investments are reported at cost. Market values are not readily determinable for funds on deposit with the State Treasurer. These funds are pooled by the State Investment Council for investment purposes and investment earnings are returned to participating funds annually. H. Inventories: Inventories of supplies are reported using the FIFO method or estimated value. Inventories are reflected as current assets on the statement of net assets. I. Capital Assets: Capital assets are reported at historical cost. The cost of a capital asset includes capitalized interest and ancillary charges necessary to place the asset into its intended location and condition for use. Capital assets includes land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, infrastructure, and all other tangible or intangible assets that are used in operations and that have an initial useful lives extending beyond a single reporting period. Capital assets are depreciated using the straight line method of depreciation over their estimated useful lives and are reported net of accumulated depreciation in the statement of net assets. J. Net Assets: Net assets are classified according to external donor restrictions or availability of assets for satisfaction of University obligations. Invested in capital assets net of related debt represents the net value of capital assets (property, plant and equipment) less the debt incurred to acquire or construct the assets. K. Scholarship allowances and student aid: Tuition and fee revenues are reported net of any scholarship discounts and allowances on the Statement of Revenues, Expenses, and Changes in Net Assets. L. Revenue recognition: The University uses accrual basis accounting & therefore recognizes revenues when earned. M. Operating and non-operating revenues: Operating revenues consist of transactions resulting in the sales of product or service, grants or contracts related to exchange transactions, program loans, reimbursement of operating transactions, and indirect cost recovered on grants and contracts related to exchange transactions. Non-operating activities are generally activities considered non-capital financing, capital and related financing and investing activities for purposes of the Statement of Cash Flows. General fund appropriations are reported as non-operating revenues. Page 15

18 2. Cash and cash equivalents: For reporting purposes, cash includes cash on hand, cash in local banks, and cash in the State Treasury. Cash equivalents are reported at fair value. Cash equivalents include short-term investments with original maturities of three months or less. 3. Retirement Plan The South Dakota Retirement System (SDRS) is a cost-sharing, multiple employer public employee retirement system (PERS) established to provide retirement benefits for employees of the state and local governments. The SDRS is considered part of the State of South Dakota financial reporting entity and is included in the state's financial report as a pension trust fund. Covered employees are required by state statute to contribute 6 percent of their salary to the plan, while public safety and judicial employees contribute at 8 percent and 9 percent, respectively. State statue also requires the employer to contribute and amount equal to the employee s contributions. 4. State Appropriations The State General Fund appropriation for fiscal year 2012 was $8,350, Tuition and Fees The University collected and remitted $5,671, of tuition and selected fees to the Board of Regents Tuition and Fee pool for fiscal year 2012, of which $1,367, was deposited in the Higher Education Facilities Fund. Only the amount returned to the University as a tuition allocation from the fund is reported as revenue. The allocation for fiscal year 2012 was $3,111, Endowment and Similar Funds The assets of the Endowment and similar funds administered by the Department of School and Public Lands have not been included in the financial statements because the University does not actively participate in the administration of the funds. 7. Related parties: The financial statements do not include the assets, liabilities or fund balances of affiliated organizations, whose financial statements are separately audited. 8. Funds held for others: Funds held for others consist of federal loan program balances and funds held for student organizations. Assets of the federal loan program are student loans receivable and the funds held for student organizations are principally cash. Page 16

19 9. Capital Asset Activity including construction in progress for the year ended June 30, 2012 was as follows: Beginning Ending Balance Additions Retirements Balance Land 89,820 89,820 Land Improvements 1,054,404 1,054,404 Infrastructure 375,753 2,852,785 3,228,538 Buildings 35,857, ,915 36,255,035 Construction In Progress 1,622,225 (1,622,225) 0 Furniture, fixtures, and equip. 2,177, ,741 2,332,843 Library materials 3,942, ,838 (34,749) 4,016,445 Total 45,118,780 1,893,054 (34,749) 46,977,085 Less accumulated depreciation: Land Improvements 609,256 29, ,820 Infrastructure 375, , ,030 Buildings 14,790,420 1,189,257 15,979,677 Furniture, fixtures, and equip. 1,615, ,506 1,729,980 Library materials 3,415, ,656 (34,749) 3,498,572 Total 20,806,569 1,582,260 (34,749) 22,354,080 Capital Assets, net 24,312, , ,623, Long-term liability activity for the year ended June 30, 2012 was as follows: Compensated Absences Payable: Compensated absences include accrued annual leave, sick leave and compensatory time earned as of June 30, Annual leave is earned by State of South Dakota employees. Upon termination, employees are eligible to receive compensation for their accrued annual leave balance. Employees who have been continuously employed by the State of South Dakota for at least seven years prior to the date of their retirement, voluntary resignation or death will receive payment for one-fourth of their accumulated sick leave balance, such payment not to exceed the sum of twelve weeks of employee's annual compensation. Capital Lease Payable: DSU entered into a capital lease to purchase tablet PCs. These tablets are individually under the capitalization threshold but because of the $1 buyout option at the end of the lease, they are to be considered capital leases rather than operating leases. The schedule of capital leases remaining to be paid as of June 30, 2012 are as follows: Page 17

20 Tablet PC Balance 7/1/11 1,018, Additions 442, Payments (791,240.70) Balance 6/30/12 669, Due FY13 principal 517, Due FY14 principal 151, Total Principal 669, Due FY13 interest 20, Due FY14 interest 5, Total Interest 26, Long-Term Liabilities: In November 2004, the South Dakota Board of Regents Housing and Auxiliary Facilities System Revenue Bonds, Series 2004 were issued in the amount of $12,965,000. Of this amount, $3,260,000 was Dakota State University s share. This issue was a refinancing of the previously held series 1974 and 1995 bonds. The premium amount on the bond issuance of $129, along with the issuance cost of $91, and the unamortized deferred amount $60, are being amortized through the life of the bond which ends June 30, The series 2004 bonds are funded from pledged revenues of the residence halls less operational costs, pledged revenues from auxiliary operations including the Bookstore, Food Service, and Trojan Center less operational costs and a portion of the General Activity Fee. The South Dakota Board of Regents issued bonds in 2009 of which $5,160,000 was DSU s portion for the housing program. The annual requirements to amortize all Revenue Bond debt outstanding as of June 30, 2012 are as follows: Page 18

21 TOTAL Year Ending June 30, Principal Interest Debt Service , , , , , , , , , , , , , , , ,290, , ,153, ,305, , ,639, , , , Total 6,830, ,510, ,340, Operating Leases: The University has entered into the following leases: Parking lot lease agreement with the DSU Foundation which requires the University to pay the Foundation $21,500 annually effective July 2010 to June The agreement is contingent upon the Legislature of South Dakota making the necessary appropriations for such expenditures on an annual basis. Student housing in the amount of $103,680 annually. This agreement is with the Madison Housing & Redevelopment Commission and is for a period of three years, expiring in The schedule of operating leases remaining to be paid as of June 30, 2012 are as follows: Parking Housing Lot Year Lease Lease Total , , , , , , , , Total 207, , , Balance 7/1/ , , Additions 311, , , Reductions (103,680.00) (18,500.00) (122,180.00) Balance 6/30/12 207, , , Page 19

22 12. Joint Ventures: Dakota State University and the City of Madison are in joint venture of the Madison Community Center. The operations of the Madison Community Center are funded through memberships. Bonds are paid by Dakota State University from a portion of the general activity fee. 13. Functional Classification of Expenses and Depreciation: Personal Services Travel Contractual Supplies & noncapitalized equipment Grants & Subsidies Other Depr. Total Instruction $ 9,801,210 $ 43,361 $ 1,210,497 $ 959,363 $ - $ 5,510 $ - $ 12,019,940 Research $ 628,576 $ 86,723 $ 194,301 $ 207,292 $ 152,699 $ - $ - $ 1,269,593 Public Service $ 1,545,674 $ 79,372 $ 1,296,706 $ 243,205 $ 18,694 $ - $ - $ 3,183,650 Academic Support $ 2,052,074 $ 73,997 $ 347,251 $ 354,982 $ 83,382 $ - $ - $ 2,911,686 Student Services $ 2,145,264 $ 293,184 $ 599,810 $ 361,222 $ 39,882 $ - $ - $ 3,439,362 Institutional Support $ 2,264,834 $ 55,174 $ 834,808 $ 74,259 $ 28,050 $ - $ - $ 3,257,126 O & M of Plant $ 907,335 $ 1,747 $ 592,718 $ 405,290 $ - $ - $ 1,582,259 $ 3,489,349 Scholarships & Fellow ships $ 199,529 $ - $ - $ - $ 1,461,994 $ 72,983 $ - $ 1,734,506 Auxiliary Enterprises $ 584,411 $ 6,674 $ 2,041,252 $ 741,669 $ - $ - $ - $ 3,374,006 TOTAL $ 20,128,908 $ 640,231 $ 7,117,343 $ 3,347,282 $ 1,784,702 $ 78,493 $ 1,582,259 $ 34,679,218 Page 20

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