Annual Financial Report
For the Years Ended June 30, 2012 and 2011
A MEMBER OF THE MINNESOTA STATE COLLEGES AND UNIVERSITIES SYSTEM
MINNESOTA STATE UNIVERSITY MOORHEAD
A MEMBER OF THE
MINNESOTA STATE COLLEGES AND UNIVERSITIES SYSTEM
ANNUAL FINANCIAL REPORT
FOR THE YEARS ENDED JUNE 30, 2012 and 2011
Prepared by:
Minnesota State University Moorhead
1104 7th Avenue South
Moorhead, MN 56563
Upon request, this publication is available in alternate formats by calling one of the following:
General number (651) 201-1800
Toll free: 1-888-667-2848
For TTY communication, contact Minnesota Relay Service at 7-1-1 or 1-800-627-3529.
MINNESOTA STATE UNIVERSITY MOORHEAD
ANNUAL FINANCIAL REPORT
FOR THE YEARS ENDED JUNE 30, 2012 and 2011
TABLE OF CONTENTS
INTRODUCTION
Page
Transmittal Letter .................................................................................................................................. 5
Organizational Chart .............................................................................................................................. 7
FINANCIAL SECTION
Independent Auditor’s Report ............................................................................................................. 10
Management’s Discussion and Analysis .............................................................................................. 13
Basic Financial Statements
Statements of Net Assets .............................................................................................................. 18
Minnesota State University Moorhead Alumni Foundation, Inc. – Statements of Financial Position .... 19
Statements of Revenues, Expenses, and Changes in Net Assets ................................................... 20
Minnesota State University Moorhead Alumni Foundation, Inc. – Statements of Activities ....... 21
Statements of Cash Flows ............................................................................................................. 22
Notes to the Financial Statements ................................................................................................. 24
REQUIRED SUPPLEMENTARY INFORMATION SECTION
Schedule of Funding Progress for Net Other Postemployment Benefits ............................................. 47
SUPPLEMENTARY SECTION
Report on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards .................................................................. 50
1
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2
INTRODUCTION
3
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4
5
6
7
Laura Huth
Vice President of the
Alumni Foundation
Board of Directors
MSUM Alumni
Foundation
Chief Human
Resources Officer
Mark Yuran
Executive Director
of Communications
& Marketing
David Wahlberg
Anne Blackhurst
Provost & Senior
Vice President
Edna Szymanski
President
Steven J. Rosenstone
Chancellor
Board of Trustees
Minnesota State Colleges and Universities
Minnesota State University Moorhead
Organizational Chart
Jan Mahoney
Vice President of
Finance &
Administration
Kathleen McNabb
Assistant to the President
Executive 2
The financial activity of the Minnesota State University Moorhead is included in this report. The
University is one of 31 colleges and universities included in the Minnesota State Colleges and Universities
Annual Financial Report which is issued separately.
The University’s portion of the Revenue Fund is also included in this report. The Revenue Fund
activity is included both in the Minnesota State Colleges and Universities Annual Financial Report and
in a separately issued Revenue Fund Annual Financial Report.
All financial activity of Minnesota State Colleges and Universities is included in the state of Minnesota
Comprehensive Annual Financial Report.
8
FINANCIAL SECTION
9
10
11
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12
MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited)
INTRODUCTION
The following discussion and analysis provides an overview of the financial position and activities of
Minnesota State University Moorhead, a member of the Minnesota State Colleges and Universities, for the
years ended June 30, 2012 and 2011. This discussion has been prepared by members of the University
administrative team and should be read in conjunction with the financial statements and the notes, which
follow this section.
The University is one of 31 colleges and universities comprising the Minnesota State Colleges and
Universities System, which is governed by a 15-member Board of Trustees appointed by the Governor.
Twelve trustees serve six-year terms, eight representing each of Minnesota’s congressional districts, and
four serving at large. The three remaining trustees are students; one from a state university, a community
college, and a technical college, each serving two-year terms. The Board of Trustees selects the chancellor
and has broad policy responsibility for system planning, academic programs, fiscal management, personnel,
admissions requirements, tuition and fees, and policies and procedures.
The University is a welcoming educational community that offers rigorous courses of study and places high
expectations upon its 8,700 students. Our strong commitment to faculty-mentored undergraduate research
and intellectual growth provides students with continual opportunities for personal and professional
achievement. The University continues to foster an environment that encourages students to become
versatile, thoughtful, innovative, and engaged leaders who contribute to their professions and their
communities.
Minnesota State University Moorhead values diversity and mutual respect and strives to instill these ideals
throughout the institution. The University honors its heritage as a respected, student-focused, public
university and continues to enhance our students' lives at the same time that it contributes to the community
and the region. The University offers graduate and professional programs that contribute to the state and
region through increased collaboration with local and state business, industry, and human services to assure
optimal preparation of graduates.
The University builds upon a solid foundation of high quality teaching and learning as it commits to a
future as the premier liberal arts and sciences-based university in the region.
FINANCIAL HIGHLIGHTS
Total assets increased $1.2 million in fiscal year 2012 following an $18.0 million increase in fiscal year
2011. Total liabilities decreased $4.4 million in fiscal year 2012 following an $8.3 million increase in
fiscal year 2011. These changes resulted in net assets at June 30, 2012 and June 30, 2011 of $104.3 million
and $98.7 million, respectively. The major factors impacting the financial position have been an increase
to building improvements and a decrease in restricted payables, offset by a decrease in state appropriation.
USING THE FINANCIAL STATEMENTS
The University’s financial report includes three financial statements: the statements of net assets, the
statements of revenues, expenses and changes in net assets, and the statements of cash flows. These
financial statements are prepared in accordance with the generally accepted accounting principles (GAAP)
as established by the Government Accounting Standards Board (GASB) through authoritative
pronouncements. The University has included a summary of significant accounting policies in Note 1 to
the financial statements. These statements establish standards for external financial reporting for public
colleges and universities and require that financial statements be presented on a consolidated basis to focus
13
on the University as a whole, with resources classified for accounting and reporting purposes into four net
asset categories.
STATEMENTS OF NET ASSETS
The statements of net assets present the financial position of the University at the end of the fiscal year and
include all assets and liabilities of the University as measured using the accrual basis of accounting. The
difference between total assets and total liabilities (net assets) is one indicator of the current financial
condition of the University, while the change in net assets is an indicator of whether the overall financial
condition has improved or deteriorated during the year. Capital assets are stated at historical cost less an
allowance for depreciation, with current year depreciation reflected as a period expense on the statement of
revenues, expenses and changes in net assets.
A summary of the University’s assets, liabilities and net assets at June 30, 2012, 2011 and 2010,
respectively, follows:
Summarized Statements of Net Assets
(In Thousands)
2012
2011
2010
Assets
Current assets
$ 52,804 $ 51,436 $ 45,426
Current restricted assets
6,826
12,525
6,609
Noncurrent restricted assets
7,499
2,358
10
103,201 102,857
99,156
Noncurrent assets, net
170,330 169,176 151,201
Total assets
Liabilities
Current liabilities
14,956
17,690
17,615
Noncurrent liabilities
51,060
52,754
44,498
Total liabilities
66,016
70,444
62,113
Net assets
Invested in capital assets, net of related debt
68,647
67,103
63,378
Restricted expendable, bond covenants
15,908
12,296
8,457
Restricted expendable, other
5,510
4,892
4,471
Unrestricted
14,249
14,441
12,782
Total net assets
$ 104,314 $ 98,732 $ 89,088
Current unrestricted assets consist primarily of cash and cash equivalents and investments totaling $47.8
million at June 30, 2012. This represents approximately 6.7 months of total operating expenses (excluding
depreciation) for fiscal year 2012. Noncurrent assets of $103.2 million, represents the value of the land,
buildings, construction in progress, equipment, library collections, and federal Perkins loans receivable.
The total value for noncurrent assets is reduced by accumulated depreciation.
Current liabilities consist primarily of accounts payable, salaries and benefits payable, compensated
absences, workers’ compensation, current portion of long-term debt, and unearned revenue. Salaries and
benefits payable totaled $4.9 million at June 30, 2012. Faculty contracts paid over twelve months on a nine
month school year, account for a significant amount in salaries payable. Unearned revenue consists of
summer session tuition and grant receipts received, but not yet earned. At June 30, 2012, $2.0 million was
being held as unearned revenue. Summer session began in May and ended in August, 2012, with its tuition
revenue being allocated based on the number of session days in fiscal year 2012.
14
Noncurrent liabilities include $7.4 million in other compensation benefits including compensated absences,
the value of employee vacation/sick leave, and workers’ compensation as of June 30, 2012. The remaining
balance of the noncurrent liabilities is mainly represented by revenue and general obligation bonds payable,
capital leases payable and capital contributions payable to the federal government for the capital used in the
Perkins loan program.
At June 30, 2012, the University’s net assets increased by $5.6 million over fiscal year 2011. Invested in
capital assets, net of related debt, represents the University’s capital assets net of accumulated depreciation
and outstanding principal balances of debt attributed to the acquisition, construction, and/or improvement
of the assets. Restricted net assets primarily include the amounts reserved for the University’s capital
projects, Perkins loans, faculty contracts, and bond covenants.
CAPITAL AND DEBT ACTIVITIES
One of the critical factors necessary to assure the quality of the University’s academic programs and
residential life experience is the development and renewal of its capital assets. The University continues to
provide good stewardship of university facilities through planning and execution of projects that address
deferred maintenance in older facilities, modernizing interiors and, when existing buildings cannot meet
special needs, adding new construction.
Revenue and general obligation bonds payable totaled $37.1 million at June 30, 2012, a $1.3 million
decrease over fiscal year 2011. These bonds are issued in order to finance construction and renovation of
the student union and residence hall buildings.
Capital asset expenditures totaled $10.5 million, $11.0 million and $11.9 million in fiscal years 2012, 2011
and 2010, respectively. This significant financial commitment to capital asset development and renewal
includes the projects described below. See Note 6 for additional information.
Utilizing resources provided through revenue bond, general obligation bond and University operating
funds, the University executed and completed numerous repair, replacement and restoration projects. All
improvement projects were managed within budget and as scheduled and they incorporated the use of
sustainable design and energy efficient materials.
Major projects in fiscal year 2012:
Dahl Hall - $8.6 Million Renovation
Funded in fiscal year 2010 through revenue bonds, this remodeling project addresses a significant deferred
renovation within the 50 year old residence hall. The final phase of this revenue bond funded project was
completed and the remodeled building opened for use August 2012. The updates to the building improve
the student’s experience, reduce the deferred maintenance budget, and assists with recruitment and
retention.
Continued Remodeling of Livingston Lord Library and Information Technology Center
The 2008 and 2010 legislatures funded $0.4 million and $2.5 million respectively for the design of a major
renovation and a window/curtain wall upgrade for the Livingston Lord Library and Information
Technology Center. An additional $14.9 million in capital funds were allocated in fiscal year 2011 for the
major renovation. The final phase of this 2011 general obligation bond funded project began in 2012. The
renovated building will merge traditional library functions with technology resources and instruction into a
single combined facility. The result of this integration will be a single-stop service for students and faculty
to meet all of their media, hardware/software, print resources, research and professional development
needs. The project addresses $12.2 million in deferred maintenance and will greatly improve energy
efficiency of the facility. Planned completion is August 2013.
15
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
The statements of revenues, expenses and changes in net assets present the University’s results of
operations. Tuition revenue continued to rise due to an increase in the tuition rate and converting fees to a
differential tuition structure. Net tuition, auxiliary, sales, and room and board revenue totaled $51.6
million, an increase of $0.7 million over fiscal year 2011, net of scholarship allowance of $14.9 million.
The scholarship allowance is based on the actual application of federal, state and private grant monies
being applied to student accounts. See Note 12 for additional information.
A summary of the statements of revenues, expenses, and changes in net assets for fiscal years ended
June, 2012, 2011 and 2010, respectively, follows:
Summarized Statements of Revenues, Expenses, and Changes in Net Assets
(In Thousands)
2012
Operating revenues and expenses
Operating revenues
Operating expenses
Operating loss
Nonoperating revenues and expenses
Income before other revenues, expenses, gains or losses
Other revenues, expenses, gains or losses
Change in net assets
Net assets, beginning of year
Net assets, end of year
2011
$ 52,561 $ 51,660
(90,735)
(95,159)
(38,174)
(43,499)
41,256
47,647
3,082
4,148
2,500
5,496
5,582
9,644
98,732
89,088
$104,314 $ 98,732
2010
$ 53,339
(97,944)
(44,605)
48,622
4,017
8,700
12,717
76,371
$ 89,088
FOUNDATION
The Minnesota State University Moorhead Alumni Foundation, Inc. is a component unit of Minnesota State
University Moorhead. As such, the separately audited financial statements for the Foundation are included
but shown separately from those of the University. The Foundation contributed $468,829, $465,762 and
$550,394 to University scholarships for fiscal years 2012, 2011 and 2010, respectively.
ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE
Fiscal year 2013 and the New Biennium
The State of Minnesota economic outlook as of October, 2012 shows that tax revenues are above those
previously forecasted. The impact of increased revenues on the appropriation to Minnesota State Colleges
and Universities will be determined in future legislative sessions. The University’s share of the
appropriation will likely decline as a result of an enrollment drop in fiscal year 2012.
The University budget plan for fiscal year 2013 will provide for a decline in tuition revenue resulting from
another loss in enrollment. The enrollment loss in fiscal year 2012 and fiscal year 2013 is largely due to
strictly adhering to the admissions policy requiring new entering freshmen and new transfer students to
meet certain academic standards. Moving forward enrollment is expected to stabilize and eventually
increase due to focused improvements in retention.
16
Budget planning for the next biennium will include parameters reflecting our current economy. The
Minnesota State Colleges and Universities strategic framework and a new university strategic plan will
help inform priorities for the next budget cycle.
It will be critical to develop a long-term financial strategy that recognizes the many economic challenges
for our state, our system, our university and our students.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of Minnesota State University Moorhead’s
condition for all those with an interest in the University’s finances. Questions concerning any of the
information in the report or requests for additional financial information should be addressed to:
Comptroller
Minnesota State University Moorhead
1104 South 7th Avenue
Moorhead, MN 56563
17
MINNESOTA STATE UNIVERSITY MOORHEAD
STATEMENTS OF NET ASSETS
AS OF JUNE 30, 2012 AND 2011
(IN THOUSANDS)
Assets
Current Assets
Cash and cash equivalents
Investments
Grants receivable
Accounts receivable, net
Prepaid expense
Inventory
Student loans, net
Other assets
Total current assets
Current Restricted Assets
Cash and cash equivalents
Total current restricted assets
Noncurrent Restricted Assets
Other assets
Construction in progress
Total noncurrent restricted assets
Total restricted assets
Noncurrent Assets
Student loans, net
Capital assets, net
Total noncurrent assets
Total Assets
Liabilities
Current Liabilities
Salaries and benefits payable
Accounts payable
Unearned revenue
Payable from restricted assets
Interest payable
Funds held for others
Current portion of long-term debt
Other compensation benefits
Total current liabilities
Noncurrent Liabilities
Noncurrent portion of long-term debt
Other compensation benefits
Capital contributions payable
Total noncurrent liabilities
Total Liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted expendable, bond covenants
Restricted expendable, other
Unrestricted
Total Net Assets
2012
$
$
The notes are an integral part of the financial statements.
18
43,991
3,856
290
1,648
1,733
556
600
130
52,804
2011
$
41,699
4,478
605
1,792
1,562
571
600
129
51,436
6,826
6,826
12,525
12,525
8
7,491
7,499
14,325
9
2,349
2,358
14,883
5,288
97,913
103,201
170,330
5,046
97,811
102,857
169,176
4,940
2,531
2,029
974
254
834
2,268
1,126
14,956
6,647
2,475
1,977
1,860
284
1,230
1,948
1,269
17,690
38,025
7,442
5,593
51,060
66,016
39,798
7,357
5,599
52,754
70,444
68,647
15,908
5,510
14,249
104,314
67,103
12,296
4,892
14,441
98,732
$
MINNESOTA STATE UNIVERSITY MOORHEAD ALUMNI FOUNDATION, INC.
STATEMENTS OF FINANCIAL POSITION
AS OF JUNE 30, 2012 AND 2011
(IN THOUSANDS)
Restated
2011
2012
Assets
Current Assets
Cash and cash equivalents
Investments
Pledges and contributions receivable, net
Other receivables
Total current assets
Noncurrent Assets
Long-term pledges receivable
Property and equipment, net
Total noncurrent assets
Total Assets
$
$
Liabilities and Net Assets
Current Liabilities
Accounts payable
Interest payable
Annuities payable
Bonds payable/Notes payable
Total current liabilities
Noncurrent Liabilities
Unitrust liabilities
Annuities payable
Bonds payable/Notes payable
Total noncurrent liabilities
Total Liabilities
$
Net Assets
Unrestricted
Temporarily restricted
Permanently restricted
Total Net Assets
Total Liabilities and Net Assets
$
The notes are an integral part of the financial statements.
19
1,170
11,172
716
15
13,073
4,659
3,418
8,077
21,150
68
14
47
105
234
$
$
$
1,028
9,164
473
311
10,976
3,219
3,553
6,772
17,748
13
15
51
164
243
207
509
3,120
3,836
4,070
199
521
3,225
3,945
4,188
1,471
6,062
9,547
17,080
21,150
1,123
4,615
7,822
13,560
17,748
$
MINNESOTA STATE UNIVERSITY MOORHEAD
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(IN THOUSANDS)
2012
Operating Revenues
Tuition, net
Fees, net
Sales and services, net
Restricted student payments, net
Other income
Total operating revenues
$
Operating Expenses
Salaries and benefits
Purchased services
Supplies
Repairs and maintenance
Depreciation
Financial aid, net
Other expense
Total operating expenses
Operating loss
Nonoperating Revenues (Expenses)
Appropriations
Federal grants
State grants
Private grants
Interest income
Interest expense
Grants to other organizations
Total nonoperating revenues (expenses)
Income Before Other Revenues, Expenses, Gains, or Losses
Capital appropriations
Gain (loss) on disposal of capital assets
Change in net assets
Total Net Assets, Beginning of Year
Total Net Assets, End of Year
$
The notes are an integral part of the financial statements.
20
30,866
2,309
5,079
13,331
976
52,561
2011
$
28,408
4,224
5,371
12,895
762
51,660
59,635
11,335
8,555
1,741
5,206
605
3,658
90,735
(38,174)
62,034
11,273
9,369
1,631
4,718
1,406
4,728
95,159
(43,499)
25,905
9,709
3,360
3,613
366
(1,697)
41,256
29,277
13,019
2,503
4,211
372
(1,608)
(127)
47,647
3,082
4,148
2,398
102
5,582
5,559
(63)
9,644
98,732
104,314
$
89,088
98,732
MINNESOTA STATE UNIVERSITY MOORHEAD ALUMNI FOUNDATION, INC.
STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(IN THOUSANDS)
Unrestricted
Support and Revenue
Contributions
Investment income
Realized losses
Program income
Special events
Net assets released from restrictions
Total support and revenue
$
Expenses
Program services
Program services
Scholarships
University activities
Total program services
Supporting services
Interest expense
Management and general
Fundraising
Depreciation and amortization
Other expense
Total supporting services
Total expenses
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
$
Temporarily
Restricted
400 $
10
293
3
2,153
2,859
2,646 $
404
550
(2,153)
1,447
Permanently
Restricted
1,725 $
1,725
2012 Total
2011 Total
Restated
4,771 $
414
843
3
6,031
2,365
1,667
(13)
492
14
4,525
1,111
469
20
1,600
-
-
1,111
469
20
1,600
1,498
466
62
2,026
174
450
95
135
57
911
2,511
-
-
174
450
95
135
57
911
2,511
182
394
89
135
52
852
2,878
348
1,447
1,725
3,520
1,647
4,615
6,062 $
7,822
9,547 $
1,123
1,471 $
The notes are an integral part of the financial statements.
21
13,560
17,080 $
11,913
13,560
MINNESOTA STATE COLLEGES AND UNIVERSITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(IN THOUSANDS)
2012
Cash Flows from Operating Activities
Cash received from customers
Cash repayment of program loans
Cash paid to suppliers for goods or services
Cash payments for employees
Financial aid disbursements
Cash payments for program loans
Net cash flows used in operating activities
$
Cash Flows from Noncapital and Related Financing Activities
Appropriations
Federal grants
State grants
Private grants
Agency activity
Grants to other organizations
Net cash flows provided by noncapital and related financing activities
850,437
3,908
(443,775)
(1,243,191)
(35,384)
(3,828)
(871,833)
2011
$
841,237
3,803
(457,514)
(1,240,782)
(57,246)
(3,935)
(914,437)
551,293
369,996
74,346
30,338
421
(11,231)
1,015,163
613,382
422,482
65,481
22,377
342
(15,687)
1,108,377
(189,420)
58,125
484
2,996
20,106
1,549
(22,569)
(5,858)
(931)
(25,871)
(161,389)
(159,430)
43,074
555
4,905
107,304
9,403
(20,151)
(4,977)
(826)
(26,340)
(46,483)
Cash Flows from Investing Activities
Proceeds from sales and maturities of investments
Purchase of investments
Investment earnings
Net cash flows provided by investing activities
12,533
(11,313)
3,450
4,670
7,543
(4,396)
4,748
7,895
Net Increase (Decrease) in Cash and Cash Equivalents
(13,389)
Cash Flows from Capital and Related Financing Activities
Investment in capital assets
Capital appropriation
Capital grants
Proceeds from sale of capital assets and insurance proceeds
Proceeds from borrowing
Proceeds from bond premiums
Interest paid
Repayment of lease principal
Repayment of note principal
Repayment of bond principal
Net cash flows used in capital and related financing activities
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
$
The notes are an integral part of the consolidated financial statements.
22
920,726
907,337
155,352
$
765,374
920,726
MINNESOTA STATE COLLEGES AND UNIVERSITIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
(IN THOUSANDS)
2012
Operating Loss
$
Adjustment to Reconcile Operating Loss to
Net Cash Flows used in Operating Activities
Depreciation
Provision for loan defaults
Loan principal repayments
Loans issued
Forgiven loans
Donated and lease equipment not capitalized
Change in assets and liabilities
Inventory
Accounts receivable
Accounts payable
Salaries and benefits payable
Other compensation benefits
Capital contributions payable
Unearned revenues
Other
Net reconciling items to adjust operating loss
Net cash flow used in operating activities
$
Non-Cash Investing, Capital, and Financing Activities:
Capital projects on account
Amortization of bond premium
$
23
(933,970)
2011
$
(1,015,682)
104,102
198
3,908
(3,828)
413
1,874
97,297
35
3,803
(3,935)
568
944
(1,936)
(458)
(2,197)
(41,123)
(285)
(340)
2,354
(545)
62,137
(871,833)
785
(9,868)
7,000
5,269
2,855
(358)
(649)
(2,501)
101,245
(914,437)
29,642
2,082
$
$
23,197
1,962
MINNESOTA STATE UNIVERSITY MOORHEAD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2012 AND 2011
1.
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Basis of Presentation — The reporting policies of Minnesota State University Moorhead, a member of the
Minnesota State Colleges and Universities system, conform to generally accepted accounting principles
(GAAP) in the United States, as prescribed by the Governmental Accounting Standards Board (GASB). The
statements of net assets; statements of revenues, expenses, and changes in net assets; and statements of cash
flows include financial activities of Minnesota State University Moorhead.
Financial Reporting Entity — Minnesota State Colleges and Universities is an agency of the state of Minnesota
and receives appropriations from the state legislature, substantially all of which are used to fund general
operations. Minnesota State University Moorhead receives a portion of the Minnesota State Colleges and
Universities’ appropriation. The operations of most student organizations are included in the reporting entity
because the Board of Trustees has certain fiduciary responsibilities for these resources.
Discretely presented component units are legally separate organizations that raise and hold economic resources
for the direct benefit of a college or university in accordance with GASB Statement No. 39, Determining
Whether Certain Organizations are Component Units. Moorhead State University Alumni Foundation, Inc. is
considered significant to the University and is included as a discretely presented component unit and separately
identified in Note 18. Complete financial statements may be obtained from Moorhead State University Alumni
Foundation, Inc., 1104 Seventh Avenue South, Moorhead, MN 56563.
Basis of Accounting — The basis of accounting refers to when revenues and expenses are recognized and
reported in the financial statements. The accompanying financial statements have been prepared as a special
purpose government entity engaged in business type activities. Business type activities are those that are
financed in whole or in part by fees charged to external parties for goods or services. Accordingly, these
financial statements have been presented using the economic resources measurement focus and the accrual basis
of accounting. Revenues are recognized when earned and expenses are recognized as they are incurred.
Eliminations have been made to minimize the double counting of internal activities. Interfund receivables and
payables have been eliminated in the statements of net assets.
Minnesota State Colleges and Universities applies all applicable Financial Accounting Standards Board (FASB)
statements issued prior to November 30, 1989, and GASB statements issued since that date.
Budgetary Accounting — University budgetary accounting, which is the basis for annual budgets and the
allocation of state appropriations, differs from GAAP. University budgetary accounting includes all receipts
and expenses up to the close of the books in August for the budget fiscal year. Revenues not yet received by the
close of the books are not included. The criterion for recognizing expenses is the actual disbursement, not when
the goods or services are received.
The state of Minnesota operates on a two year (biennial) budget cycle ending on June 30 of odd numbered
years. Minnesota State Colleges and Universities is governed by a 15 member board of trustees appointed by
the Governor with the advice and consent of the state senate. The Board approves the University biennial
budget request and allocation as part of the Minnesota State Colleges and Universities’ total budget.
Budgetary control is maintained at the University. The University President has the authority and responsibility
to administer the budget and can transfer money between programs within the University without Board
approval. The budget of the University can be legally amended by the authority of the Vice Chancellor/Chief
Financial Officer of Minnesota State Colleges and Universities.
State appropriations do not lapse at year end. Any unexpended appropriation from the first year of a biennium
is available for the second year. Any unexpended balance may also carry over into future bienniums.
24
Capital Appropriation Revenue — Minnesota State Colleges and Universities is responsible for paying one third
of the debt service for certain general obligation bonds sold for capital projects, as specified in the authorizing
legislation. The portion of general obligation bond debt service that is payable by the state of Minnesota is
recognized by Minnesota State Colleges and Universities as capital appropriation revenue when the related
expenses are incurred. Individual colleges and universities are allocated cash, capital appropriation revenue,
and debt based on capital project expenses.
Cash and Cash Equivalents — The cash balance represents cash in the state treasury and demand deposits in
local bank accounts as well as cash equivalents. Cash equivalents are short term, highly liquid investments
having original maturities (remaining time to maturity at acquisition) of three months or less. Cash and cash
equivalents include amounts in demand deposits, savings accounts, cash management pools, repurchase
agreements, and money market funds.
Restricted cash is cash held for capital projects and cash in the Revenue Fund for capital projects and debt
service. The Revenue Fund is used to account for the revenues, expenses, and net assets of revenue producing
facilities, which are supported through usage. It has the authority to sell revenue bonds for the construction and
maintenance of revenue producing facilities.
All balances related to the state appropriation, tuition revenues, debt service, and most fees are in the state
treasury. The University also has five accounts in two local banks. The activities handled through local banks
include financial aid, student payroll, auxiliary, and student activities.
Investments — The Minnesota State Board of Investment invests the University’s balances in the state treasury,
except for the Revenue Fund, as part of a state investment pool. This asset is reported as a cash equivalent.
Interest income earned on pooled investments is retained by the System Office and allocated to the colleges and
universities.
Cash in the Revenue Fund is invested separately. The Fund contracts with the Minnesota State Board of
Investment and U.S. Bank, N.A. for investment management services. Investments are reported at fair value.
Restricted investments are investments held in the Revenue Fund for capital projects and debt service.
Receivables — Receivables are shown net of an allowance for uncollectible accounts.
Inventories — Inventories are valued at cost using the first in, first out cost method.
Prepaid Expense — Prepaid expense consists primarily of deposits in the state of Minnesota Debt Service Fund
for future general obligation bond payments.
Capital Assets — Capital assets are recorded at cost or, for donated assets, at fair value at the date of
acquisition. Estimated historical cost has been used when actual cost is not available. Such assets are
depreciated or amortized on a straight line basis over the useful life of the assets.
Estimated useful lives are as follows:
Asset Type
Buildings
Building improvements
Equipment
Library collections
Useful Life
30-40 years
15-20 years
3-20 years
7 years
Equipment includes all items with an original cost of $10,000 and over for items purchased since July 1, 2009;
$5,000 and over for items purchased between July 1, 2003 and June 30, 2009; and $2,000 and over for items
purchased prior to July 1, 2003. Buildings, building improvements, and internally developed software include
all projects with a cost of $250,000 and over for projects started since July 1, 2009, and $100,000 and over for
projects started prior to July 1, 2009. All land and library collection purchases are capitalized regardless of
amount spent.
25
Unearned Revenue — Unearned revenue consists primarily of tuition received, but not yet earned for summer
and fall sessions. It also includes amounts received from grants, which have not yet been earned under the
terms of the agreement, and room and board deposits received, but not yet earned.
Funds Held for Others — Funds held for others are primarily assets held for student organizations.
Long Term Liabilities — The state of Minnesota appropriates for and sells general obligation bonds to support
construction and renovation of the Minnesota State Colleges and Universities’ facilities as approved through the
state’s capital budget process. The University is responsible for a portion of the debt service on the bonds sold
for some University projects. The University may also enter into capital lease agreements for certain capital
assets. Other long term liabilities include compensated absences, early termination, net other postemployment
benefits, workers’ compensation claims, notes payable, and capital contributions associated with Perkins Loan
agreements with the United States Department of Education.
Minnesota State Colleges and Universities may finance the construction, renovation, and acquisition of facilities
for student residences and student unions through the sale of revenue bonds. These activities are accounted for
and reported in the Revenue Fund portion included herein. Details on the Revenue Fund bonds are available in
the separately audited and issued Revenue Fund financial report. Copies are available from the Financial
Reporting System Director, Wells Fargo Place, Minnesota State Colleges and Universities, 30 Seventh Street
East, Suite 350, St. Paul, Minnesota 55101-7804.
Operating Activities — Operating activities as reported in the statements of revenues, expenses, and changes in
net assets are those that generally result from exchange transactions such as payments received for providing
services and payments made for services or goods received. Nearly all of the University’s expenses are from
exchange transactions. Certain significant revenue streams relied upon for operations are recorded as
nonoperating revenues including state appropriations, federal, state and private grants.
Tuition, Fees, and Sales, Net — Tuition, fees, and sales are reported net of scholarship allowances. See Note 12
for additional information.
Restricted Student Payments — Restricted student payments consist of room, board, sales, and fee revenue
restricted for payment of revenue bonds, and are net of scholarship allowances. See Note 12 for additional
information.
Federal Grants — Minnesota State University Moorhead participates in several federal grant programs. The
largest programs include Pell, Supplemental Educational Opportunity Grant, Carl Perkins, and Federal Work
Study. Federal Grant revenue is recognized as nonoperating revenue in accordance with GASB Statement
No. 33, Accounting and Financial Reporting for Nonexchange Transactions. Expenditures under government
contracts are subject to review by the granting authority. To the extent, if any, that such a review reduces
expenditures allowable under these contracts, the University will record such disallowance at the time the
determination is made.
Use of Estimates — To prepare the basic financial statements in conformity with generally accepted accounting
principles, management must make estimates and assumptions. These estimates and assumptions may affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. The most significant areas that require the use of management’s
estimates relate to allowances for uncollectible accounts, scholarship allowances, workers’ compensation
claims, and compensated absences.
Net Assets — The difference between assets and liabilities is net assets. Net assets are classified further for
accounting and reporting purposes into the following three net asset categories:

Invested in capital assets, net of related debt: Capital assets, net of accumulated depreciation, and
outstanding principal balances of debt attributable to acquisition, construction or improvement of
those assets.
26

Restricted expendable: Net assets subject to externally imposed stipulations. Net asset restrictions
for the University are as follows:
Restricted for bond covenants — revenue bond restrictions.
Restricted for other — includes restrictions for the following:
Donations — restricted per donor requests.
Loans — University capital contributed for Perkins loans.
Capital projects — restricted for completion of capital projects.
Debt service — legally restricted for bond debt repayments.
Faculty contract obligations — faculty development and travel required by contracts.
Net Assets Restricted for Other
(In Thousands)
2012
Donations
$
20
Loans
635
Capital projects
286
Debt service
3,775
Faculty contract obligations
794
Total
$ 5,510

2011
20
637
110
3,372
753
$ 4,892
$
Unrestricted: Net assets that are not subject to externally imposed stipulations. Unrestricted net
assets may be designated for specific purposes by action of management, the System Office, or the
Board of Trustees.
New Accounting Pronouncements — In December 2010, the GASB issued Statement No. 60, Accounting and
Reporting for Service Concession Arrangements. The objective of this statement is to improve financial
reporting by establishing recognition, measurement, and disclosure requirements for Service Concession
Arrangements (SCA’s) for both transferors and governmental operators, and by requiring governments to
account for and report SCAs in the same manner, which improves the comparability of financial statements. In
addition, it is designed to alleviate the confusion that can arise when determining what guidance should be
applied in complex circumstances not previously specifically addressed in GASB literature. The requirements
of this statement are effective for Minnesota State Colleges and Universities for the year ended June 30, 2013.
The effect GASB Statement No. 60 will have on the fiscal year 2013 basic financial statements has not been
determined.
2.
CASH, CASH EQUIVALENTS, AND INVESTMENTS
Cash and Cash Equivalents — All balances related to the appropriation, tuition, and most fees are in the state
treasury. In addition, the University has five accounts in two local banks. The activities handled through local
banks include financial aid, student payroll, auxiliary, and student activities.
Minnesota Statutes, Section 118A.03, requires that deposits be secured by depository insurance or a
combination of depository insurance and collateral securities held in the state’s name by an agent of the state.
This statute further requires that such insurance and collateral shall be at least ten percent greater than the
amount on deposit.
The following tables summarize cash and cash equivalents:
Year Ended June 30
(In Thousands)
Carrying Amount
Cash, in bank
$
Repurchase agreements
Cash, trustee account (US Bank)
Total local cash and cash equivalents
Total treasury cash accounts
Grand Total
$
27
2012
647
1,741
2,223
4,611
46,206
50,817
2011
821
2,076
2,839
5,736
48,488
$ 54,224
$
At June 30, 2012 and 2011, Minnesota State University Moorhead’s local bank balances were $2,179,214 and
$1,860,880, respectively. These bank balances were adjusted by items in transit to arrive at the University’s
cash in bank balance.
The University’s balance in the state treasury, except for the Revenue Fund, is invested by the Minnesota State
Board of Investment as part of the state investment pool. This asset is reported as a cash equivalent.
The cash accounts are invested in short term, liquid, high quality debt securities.
Investments — The Minnesota State Board of Investment manages the majority of the state’s investments. All
investments managed by the Minnesota State Board of Investment are governed by Minnesota Statutes,
Chapters 11A and 356A. Minnesota Statutes, Section 11A.24, broadly restricts investments to obligations and
stocks of the United States and Canadian governments, their agencies, and registered corporations; other
international securities; short term obligations of specified high quality; restricted participation as a limited
partner in venture capital, real estate, or resource equity investments; and the restricted participation in
registered mutual funds. Generally, when applicable, the statutes limit investments to those rated within the top
four quality rating categories of a nationally recognized rating agency. The statutes further prescribe the
maximum percentage of fund assets that may be invested in various assets classes and contain specific
restrictions to ensure the quality of the investments.
Within statutory parameters, the Minnesota State Board of Investment has established investment guidelines
and benchmarks for all funds under its management. These investment guidelines and benchmarks are tailored
to the particular needs of each fund and specify investment objectives, risk tolerance, asset allocation,
investment management structure, and specific performance standards.
Custodial Credit Risk — Custodial credit risk for investments is the risk that in the event of a failure of the
counterparty, the University will not be able to recover the value of the investments that are in the possession of
an outside party. Board procedure 7.5.1 requires compliance with Minnesota Statutes, Section 118A.03, and
further excludes the use of FDIC insurance when meeting collateral requirements.
Credit Risk — Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. The University’s policy for reducing its exposure to credit risk is to comply with Minnesota
Statutes, Section 118A.04. This statute limits investments to the top quality rating categories of a nationally
recognized rating agency.
At June 30, 2012 and 2011, Minnesota State University Moorhead had debt securities rated equivalent to
Standard and Poor’s AAA.
Concentration of Credit Risk — Concentration of credit risk is the risk of loss attributed to the magnitude of a
government’s investment in a single issuer. The University’s policy for reducing this risk of loss is to comply
Board procedure 7.5.1 which recommends investments be diversified by type and issuer.
Interest Rate Risk — Interest rate risk is the risk that changes in interest rates will adversely affect the fair value
of an investment. The University complies with Board procedure 7.5.1 that recommends considering
fluctuating interest rates and cash flow needs when purchasing short term and long term debt investments.
As of June 30, 2012 and 2011, Minnesota State University Moorhead had the following investments and
maturities:
Year Ended June 30
(In Thousands)
2012
Weighted
2011
Weighted
Fair
Maturity
Fair
Maturity
Investment Type
Value
(In Years)
Value
(In Years)
12.85
18.11
U.S. agencies
$ 1,633
$ 1,639
1,633
1,639
Total
12.85
18.11
Portfolio weighted average maturity
2,223
2,839
Certificates of deposit
Total fair value
$ 3,856
$ 4,478
28
3.
ACCOUNTS RECEIVABLE
The accounts receivable balances are made up primarily of receivables from individuals. At June 30, 2012 and
2011, the total accounts receivable balances for the University were $2,493,838 and $2,661,235, respectively,
less an allowance for uncollectible receivables of $846,323 and $869,500, respectively.
Summary of Accounts Receivable at June 30
(In Thousands)
2012
Tuition
$ 1,113
Fees
450
Room and board
542
Sales and services
57
Third party obligations
44
Other
288
Total accounts receivable
2,494
Allowance for uncollectible accounts
(846)
Net accounts receivable
$ 1,648
$
$
2011
1,102
464
514
50
130
401
2,661
(869)
1,792
The allowance for uncollectible accounts has been computed based on the following aging schedule:
Allowance
Age
Percentage
15
Less than 1 year
1 to 3 years
45
3 to 5 years
70
95
Over 5 years
4.
PREPAID EXPENSE
Prepaid expense consists primarily of funds which have been deposited in the state’s Debt Service Fund for
future general obligation bond payments in the amounts of $1,614,356 and $1,507,262 for fiscal years 2012 and
2011, respectively. Minnesota Statutes, Section 16A.641, requires all state agencies to have on hand on
December 1 of each year an amount sufficient to pay all general obligation bond principal and interest due, and
to become due, through July 1 of the second fiscal year. Also, included in prepaid expense for fiscal years 2012
and 2011 was $118,416 and $54,580, respectively, stemming from prepaid software maintenance agreements
and prepaid contractual support.
5.
LOANS RECEIVABLE
The loans receivable balance consists of loans under the Federal Perkins Loan Program. The federal
government provides most of the funding for the loans with amounts collected used for new loan advances. The
University is responsible for loan collections. As of June 30, 2012 and 2011, the total loans receivable for this
program were $6,263,290 and $5,993,654, respectively, less an allowance for uncollectible loans of $375,287
and $347,867, respectively.
29
6.
CAPITAL ASSETS
Summaries of changes in capital assets for fiscal years 2012 and 2011 follow:
Description
Capital assets, not depreciated:
Land
$
Construction in progress
Total capital assets, not depreciated
Year Ended June 30, 2012
(In Thousands)
Beginning
Balance
Increases
6,833 $
4,648
11,481
–– $
8,923
8,923
Decreases
–– $
––
––
Completed
Construction
–– $
(1,280)
(1,280)
Ending
Balance
6,833
12,291
19,124
Capital assets, depreciated:
Buildings and improvements
Equipment
Library collections
Total capital assets, depreciated
152,431
10,408
2,598
165,437
––
1,235
324
1,559
––
247
451
698
1,280
––
––
1,280
153,711
11,396
2,471
167,578
Less accumulated depreciation:
Buildings and improvements
Equipment
Library collections
Total accumulated depreciation
66,352
8,824
1,582
76,758
4,406
447
353
5,206
––
215
451
666
––
––
––
––
70,758
9,056
1,484
81,298
1,280
–– $
86,280
105,404
Total capital assets, depreciated, net
Total capital assets, net of depreciation $
Description
Capital assets, not depreciated:
Land
$
Construction in progress
Total capital assets, not depreciated
88,679
100,160 $
(3,647)
5,276 $
Year Ended June 30, 2011
(In Thousands)
Beginning
Balance
Increases
6,759 $
10,228
16,987
74 $
9,611
9,685
32
32 $
Decreases
–– $
3
3
Completed
Construction
–– $
(15,188)
(15,188)
Ending
Balance
6,833
4,648
11,481
Capital assets, depreciated:
Buildings and improvements
Equipment
Library collections
Total capital assets, depreciated
136,495
10,585
2,681
149,761
748
257
339
1,344
––
434
422
856
15,188
––
––
15,188
152,431
10,408
2,598
165,437
Less accumulated depreciation:
Buildings and improvements
Equipment
Library collections
Total accumulated depreciation
62,352
8,734
1,633
72,719
4,000
347
371
4,718
––
257
422
679
––
––
––
––
66,352
8,824
1,582
76,758
Total capital assets, depreciated, net
Total capital assets, net of depreciation
$
77,042
94,029 $
30
(3,374)
6,311 $
177
180 $
15,188
–– $
88,679
100,160
7.
ACCOUNTS PAYABLE
Accounts payable represents amounts due for goods and services received prior to the end of the fiscal year.
Summary of Accounts Payable at June 30
(In Thousands)
2012
2011
Purchased services
$ 551
$ 545
Supplies
535
897
Repairs & maintenance
557
283
Inventory
44
49
Other
844
701
Total
$ 2,531
$ 2,475
In addition, as of June 30, 2012 and 2011, the University had payable from restricted assets in the amounts of
$974,023 and $1,860,131, respectively, which were related to capital projects financed by general obligation
bonds and revenue bonds.
8.
LONG TERM OBLIGATIONS
Summaries of amounts due within one year are reported in the current liability section of the statements of net
assets.
The changes in long term debt for fiscal years 2012 and 2011 follow:
Description
Liabilities for:
Bond premium
Capital leases
General obligation bonds
Revenue bonds
Total long term debt
Description
Liabilities for:
Bond premium
Capital leases
General obligation bonds
Revenue bonds
Total long term debt
Year Ended June 30, 2012
(In Thousands)
Beginning
Balance
Increases Decreases
$
$
1,204
3,388
14,475
22,679
41,746
$
213
––
420
––
633
$
$
$
141
163
1,003
779
2,086
Ending
Balance
$
$
Year Ended June 30, 2011
(In Thousands)
Beginning
Balance
Increases Decreases
$
$
546
3,543
14,097
15,241
33,427
$
782
––
1,354
9,215
$ 11,351
31
$
$
124
155
976
1,777
3,032
1,276
3,225
13,892
21,900
40,293
Current
Portion
$
––
105
1,007
1,156
$ 2,268
Ending
Balance
$
$
1,204
3,388
14,475
22,679
41,746
Current
Portion
$
––
164
1,005
779
$ 1,948
The changes in other compensation benefits for fiscal years 2012 and 2011 follow:
Description
Liabilities for:
Compensated absences
Early termination benefits
Net other postemployment benefits
Workers’ compensation
Total other compensation benefits
Description
Liabilities for:
Compensated absences
Early termination benefits
Net other postemployment benefits
Workers’ compensation
Total other compensation benefits
Year Ended June 30, 2012
(In Thousands)
Beginning
Balance
Increases Decreases
$
$
6,815
132
800
879
8,626
$
$
783
27
544
94
1,448
$
$
750
132
454
170
1,506
Ending
Balance
$
$
Year Ended June 30, 2011
(In Thousands)
Beginning
Balance
Increases Decreases
$
$
6,943
628
672
603
8,846
$
$
545
132
522
350
1,549
$
$
673
628
394
74
1,769
6,848
27
890
803
8,568
Current
Portion
$
$
Ending
Balance
$
$
6,815
132
800
879
8,626
738
27
––
361
1,126
Current
Portion
$
$
750
132
––
387
1,269
Bond Premium — In fiscal years 2012 and 2011, bonds were issued resulting in premiums, of $213,144 and
$782,641 at June 30, 2012 and 2011, respectively. Amortization is calculated using the straight line method and
amortized over the remaining life of the bonds.
Capital Leases — Liabilities for capital leases include those leases that meet the criteria in FASB Accounting
Standards Codification (ACS) 840, Leases. See Note 11 for additional information.
General Obligation Bonds — The state of Minnesota sells general obligation bonds to finance most of the
Minnesota State Colleges and Universities’ capital projects. The interest rate on these bonds ranges from 2.0 to
5.5 percent. Minnesota State Colleges and Universities is responsible for paying one third of the debt service
for certain general obligation bonds sold for those capital projects, as specified in the authorizing legislation.
This debt obligation is allocated to the colleges and universities based upon the specific projects funded. The
general obligation bond liability included in these financial statements represents the University’s share.
Revenue Bonds — The Revenue Fund is authorized by Minnesota Statutes, Section 136F.98, to issue revenue
bonds whose aggregate principal shall not exceed $300,000,000 at any time. The proceeds of these bonds are
used to finance the acquisition, construction and remodeling of buildings for residence hall, food service,
student union, and other revenue-producing and related facilities at the state universities. Revenue bonds
currently outstanding have interest rates of 3.875 percent to 6.5 percent.
The revenue bonds are payable solely from, and collateralized by, an irrevocable pledge of revenues to be
derived from the operation of the financed buildings and from student fees. These revenue bonds are payable
through 2032. Annual principal and interest payments on the bonds are expected to require less than 15.31
percent of net revenues. The total principal and interest remaining to be paid on the bonds is $31.0 million.
Principal and interest paid for the current year and total customer net revenues were $1.8 million and
$13.7 million, respectively.
Compensated Absences — University employees accrue vacation leave, sick leave, and compensatory leave at
various rates within limits specified in the collective bargaining agreements. The liability for compensated
absences is payable as severance pay under specific conditions. This leave is liquidated only at the time of
termination from state employment.
32
Early Termination Benefits— Early termination benefits are the benefits received for discontinuing services
earlier than planned. See Note 9 for details.
Net Other Postemployment Benefits — Other postemployment benefits are health insurance benefits for certain
retired employees under a single employer fully insured plan. Under the health benefits program retirees are
required to pay 100 percent of the total premium cost. Since the premium is a blended rate determined on the
entire active and retiree population, the retirees are receiving an implicit rate subsidy. See Note 10 for further
details.
Workers’ Compensation — The state of Minnesota Department of Management and Budget manages the self
insured workers’ compensation claims activities. The reported liability for workers’ compensation of $803,292
and $879,108 at June 30, 2012 and 2011, respectively, is based on claims filed for injuries to state employees
occurring prior to the fiscal year end and is an undiscounted estimate of future payments.
Capital Contributions — The liability of $5,592,828 and $5,599,244 at June 30, 2012 and 2011 represents the
amount the University would owe the federal government if it were to discontinue the Perkins loan program.
The decrease was $6,416 and $20,325 for the fiscal years 2012 and 2011, respectively.
Principal and interest payment schedules are provided in the following tables for revenue bonds, general
obligation bonds, and capital leases. There are no payment schedules for bond premium, compensated
absences, early termination benefits, net other postemployment benefits, workers’ compensation, or capital
contributions.
Fiscal Years
2013
2014
2015
2016
2017
2018-2022
2023-2027
2028-2032
Total
9.
Long Term Debt Repayment Schedule
(In Thousands)
General
Capital Leases
Obligation Bonds
Principal Interest
Principal Interest
$
105 $ 167
$ 1,007 $
657
103
162
1,007
608
109
156
988
558
114
151
982
509
121
144
970
460
709
616
4,770
1,584
922
403
3,326
531
1,042
128
842
58
$
3,225 $ 1,927
$ 13,892 $ 4,965
Revenue Bonds
Principal
Interest
$ 1,156 $
938
1,195
888
1,239
837
1,287
784
1,000
736
5,647
2,999
7,351
1,557
3,025
393
$ 21,900 $ 9,132
EARLY TERMINATION BENEFITS
Early termination benefits are defined as benefits received for discontinuing services earlier than planned. The
following is a description of the different benefit arrangements including the number of retired employees
receiving the benefit and the amount of future liability as of the end of fiscal years 2012 and 2011.
Minnesota State University Association of Administrative Service Faculty (MSUAASF) contract — The
MSUAASF contract allows faculty members who meet certain eligibility and combination of age and years of
service requirements to receive an early retirement incentive cash payment based on base salary at time of
separation, as well as an amount equal to the employer’s contribution for one year’s health insurance premiums
deposited in his/her health care savings plan at time of separation. The cash incentive can be paid either in one
or two payments.
33
The number of retired faculty who received this benefit and the amount of future liability for faculty as of the
end of fiscal years 2012 and 2011 follow:
Fiscal Year
2012
2011
Number
of Faculty
1
2
Future Liability
(In Thousands)
$ 14
42
Inter Faculty Organization (IFO) contract — The IFO contract allows faculty members who meet certain
eligibility and combination of age and years of service requirements to receive an early termination incentive
cash payment based on base salary at time of separation, as well as an amount equal to the employer’s
contribution for one year’s health insurance premiums deposited in his/her health care savings plan at time of
separation. The cash incentive can be paid either in one or two payments. The number of retired faculty who
received this benefit and the amount of future liability for those faculty members as of the end of fiscal years
2012 and 2011 follow:
Fiscal Year
2012
2011
Number
of Faculty
1
4
Future Liability
(In Thousands)
$ 13
90
10. NET OTHER POSTEMPLOYMENT BENEFITS
The University provides health insurance benefits for certain retired employees under a single employer fully
insured plan, as required by Minnesota Statute, 471.61, subdivision 2B. Active employees who retire when
eligible to receive a retirement benefit from a Minnesota public pension plan and do not participate in any other
health benefits program providing coverage similar to that herein described, will be eligible to continue
coverage with respect to both themselves and their eligible dependent(s) under the health benefits program.
Retirees are required to pay 100 percent of the total premium cost. Since the premium is a blended rate
determined on the entire active and retiree population, the retirees are receiving an implicit rate subsidy. As of
July 1, 2010 there were approximately 46 retirees receiving health benefits from the health plan.
Annual OPEB Cost and Net OPEB Obligation — The annual other postemployment benefit (OPEB) cost
(expense) is calculated based on the annual required contribution (ARC) of the employer, an amount actuarially
determined in accordance with the parameters of GASB Statement No. 45, Accounting and Financial Reporting
by Employers for Post Employment Benefits Other Than Pensions. The ARC represents a level of funding that,
if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed 30 years.
The following table shows the components of the annual OPEB cost for 2012 and 2011, the amount actually
contributed to the plan, and changes in the net OPEB obligation:
Components of the Annual OPEB Cost
(In Thousands)
2012
Annual required contribution (ARC)
Interest on net OPEB obligation
Adjustment to ARC
Annual OPEB Cost
Contributions during the year
Increase in net OPEB obligation
Net OPEB obligation, beginning of year
Net OPEB obligation, end of year
34
$ 537
38
(31)
544
(454)
90
800
$ 890
2011
$
$
516
32
(26)
522
(394)
128
672
800
The University’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net
OPEB obligation for fiscal years 2012 and 2011 were as follows:
For Year Ended June 30
(In Thousands)
2012
800
Beginning of year net OPEB obligation $
Annual OPEB cost
544
Employer contribution
(454)
$
890
End of year net OPEB obligation
Percentage contributed
$
$
83.46%
2011
672
522
(394)
800
75.48%
Funding Status — There are currently no assets that have been irrevocably deposited in a trust for future health
benefits. Therefore, the actuarial value of assets is zero.
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
July 1, 2010 $
—
Schedule of Funding Progress
(In Thousands)
Unfunded
Actuarial
Funded
Covered
Accrued
Accrued
Ratio
Payroll
Liability
Liability
(b)
(b - a)
(a/b)
(c)
$ 5,744
$ 5,744
0.00% $ 49,760
UAAL as a
Percentage of
Covered Payroll
((b - a)/c)
11.54%
Actuarial Methods and Assumptions — Actuarial valuations involve estimates of the value of reported amounts
and assumptions about the probability of occurrence of events far into the future. Examples include
assumptions about future employment, mortality, and healthcare cost trends. Amounts determined regarding
the funded status of the plan and the annual required contributions of the employer are subject to continual
revision as actual results are compared with past expectations and new estimates are made about the future.
Projections of benefits for financial reporting purposes are based on the substantive plan (as understood by the
employer and the plan members) and include the types of benefits provided at the time of each valuation. The
actuarial methods and assumptions used include techniques that are designed to reduce the effects of short term
volatility in actuarial accrued liabilities, consistent with the long term perspective of the calculations.
In the July 1, 2010 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial
assumptions included a 4.75 percent discount rate, which is based on the estimated long term investment yield
on the general assets, using an underlying long term inflation assumption of 3 percent. The annual healthcare
cost trend rate is 6.25 percent initially, reduced incrementally to an ultimate rate of 5 percent after twenty years.
The unfunded actuarial accrued liability is being amortized as a level dollar amount over an open 30 year
period.
11. LEASE AGREEMENTS
Operating Leases — Minnesota State University Moorhead is committed under various leases primarily for
building space, including three leases with the Minnesota State University Moorhead Alumni Foundation, Inc.
These leases are considered for accounting purposes to be operating leases. Lease expenses for the years ended
June 30, 2012 and 2011, totaled approximately $341,697 and $96,362, respectively.
Future minimum lease payments for existing lease agreements are as follows:
Year Ended June 30
(In Thousands)
Fiscal Year
Amount
2013
$
51
2014
10
Total
$
61
35
Capital Leases — Included in the capital leases are two leases with the Foundation. In fiscal year 2003, the
Foundation and the Revenue Fund entered into a $3,940,000, 30 year capital lease for John Neumaier Hall
Apartments. As of June 30, 2012, related accumulated depreciation for the apartment building totaled
$1,281,153. Also, in fiscal year 2003, the Foundation constructed the Hendrix Health Center on land owned by
the University, while entering into a ten year capital lease for $525,000. The related accumulated depreciation
for the Hendrix Health Center totaled $471,152 as of June 30, 2012.
The agreements meet the criteria of capital leases, as defined by FASB ASC 840, Leases, which defines a
capital lease generally as one which transfers benefits and risk of ownership to the lessee. The terms of the
agreements provide options to purchase at any time during the lease period. Current and noncurrent portions
are reported separately. See Note 8 for principal and interest payment schedules.
12. TUITION, FEES, AND SALES, NET
The following table provides information related to tuition, fees, and sales revenue:
Description
Tuition
Fees
Sales
Restricted student payments
Total
For the Year Ended June 30
(In Thousands)
2012
Scholarship
Gross
Allowance
Net
$ 44,518 $ (13,652) $ 30,866
2,824
(515)
2,309
5,520
(441)
5,079
13,624
(293)
13,331
$ 66,486 $ (14,901) $ 51,585
2011
Scholarship
Gross
Allowance
Net
$ 41,350 $ (12,942) $ 28,408
5,095
(871)
4,224
5,928
(557)
5,371
13,291
(396)
12,895
$ 65,664 $ (14,766) $ 50,898
13. OPERATING EXPENSES BY FUNCTIONAL CLASSIFICATION
The following tables provide information related to operating expenses by functional classification:
For the Year Ended June 30, 2012
(In Thousands)
Description
Academic support
Institutional support
Instruction
Public service
Research
Student services
Auxiliary enterprises
Scholarships & fellowships
Less interest expense
Total operating expenses
Salaries
6,986
3,662
24,271
332
43
6,588
3,609
—
—
$ 45,491
$
Benefits
2,018
907
7,760
80
6
1,874
1,499
—
—
$
14,144
$
36
$
$
Other
3,528
3,399
3,386
225
47
3,607
16,303
605
—
31,100
Interest
257
130
912
12
—
241
145
—
(1,697)
$
—
$
Total
$ 12,789
8,098
36,329
649
96
12,310
21,556
605
(1,697)
$ 90,735
For the Year Ended June 30, 2011
(In Thousands)
Description
Academic support
Institutional support
Instruction
Public service
Research
Student services
Auxiliary enterprises
Scholarships & fellowships
Less interest expense
Total operating expenses
Salaries
7,033
4,998
25,590
521
139
5,719
3,088
—
—
$ 47,088
$
Benefits
2,038
1,294
8,161
107
23
1,815
1,508
—
—
$ 14,946
$
Other
3,049
4,301
5,786
810
—
4,045
13,728
1,406
—
$ 33,125
$
Interest
236
163
875
16
4
195
119
—
(1,608)
$
—
$
Total
$ 12,356
10,756
40,412
1,454
166
11,774
18,443
1,406
(1,608)
$ 95,159
14. EMPLOYEE PENSION PLANS
The University participates in three retirement plans: the State Employees Retirement Fund, administered by the
Minnesota State Retirement System; the Teachers Retirement Fund, administered by the Teachers Retirement
Association; and the Minnesota State Colleges and Universities Defined Contribution Retirement Plan.
State Employees Retirement Fund (SERF)
Pension fund information is provided by the Minnesota State Retirement System, which prepares and publishes
its own stand alone comprehensive annual financial report, including financial statements and required
supplementary information. Copies of the report may be obtained directly from Minnesota State Retirement
System at 60 Empire Drive, Suite 300, St. Paul, Minnesota 55103-3000.
The SERF is a cost sharing, multiple employer defined benefit plan. All classified employees are covered by
this plan. A classified employee is one who serves in a civil service position. Normal retirement age is 65. The
annuity formula is the greater of a step rate with a flat rate reduction for each month of early termination, or a
level rate (the higher step rate) with an actuarial reduction for early termination. The applicable rates for each
year of allowable service are 1.2 percent and 1.7 percent of the members’ average salary, which is defined as
the highest salary paid in five successive years of service. Minnesota State Colleges and Universities, as an
employer for some participants, is liable for a portion of any unfunded accrued liability of this fund.
The statutory authority for SERF is Minnesota Statutes, Chapter 352. For fiscal year 2010 the funding
requirement for both employer and employee was 4.75 percent. For fiscal years 2011 and 2012 the funding
requirement was 5 percent for both employer and employee. Actual contributions were 100 percent of required
contributions.
Required contributions for Minnesota State University Moorhead were:
(In Thousands)
Fiscal Year
Amount
2012
$ 536
2011
559
2010
488
37
Teachers Retirement Fund (TRF)
Pension fund information is provided by the Minnesota Teachers Retirement Association, which prepares and
publishes its own stand alone comprehensive annual financial report, including financial statements and
required supplementary information. Copies of the report may be obtained directly from Teachers Retirement
Association at 60 Empire Drive, Suite 400, St. Paul, Minnesota 55103-3000.
The Teachers Retirement Fund is a cost sharing, multiple employer defined benefit plan. Teachers and other
related professionals may participate in TRF. Normal retirement age is 65. Coordinated membership includes
those who are covered by the Social Security Act. The annuity formula is the greater of a step rate with a flat
reduction for each month of early termination, or a level rate (the higher step rate) with an actuarial based
reduction for early termination. The applicable rates for coordinated members are 1.2 percent and 1.7 percent
for service rendered before July 1, 2006, and 1.4 percent and 1.9 percent for service rendered on or after July 1,
2006. Minnesota State Colleges and Universities, as an employer for some participants, is liable for a portion of
any unfunded accrued liability of this fund.
The statutory authority for TRF is Minnesota Statutes, Chapter 354. For fiscal years 2010 and 2011 the funding
requirement was 5.5 percent for both employer and employee coordinated members. For fiscal year 2012 the
funding requirement was 6 percent for both employer and employee coordinated members. Beginning July 1,
2011, both employee and employer contribution rate increases were and will continue to be phased in with a 0.5
percent increase, occurring every July 1 over three years, until it reaches a contribution rate of 7.5 percent on
July 1, 2014. Actual contributions were 100 percent of required contributions.
Required contributions for Minnesota State University Moorhead were:
(In Thousands)
Fiscal Year
Amount
2012
$ 403
2011
433
2010
421
Minnesota State Colleges and Universities Defined Contribution Retirement Fund
General Information — The Minnesota State Colleges and Universities Defined Contribution Retirement Fund
includes two plans: an Individual Retirement Account Plan and a Supplemental Retirement Plan. Both plans
are mandatory, tax deferred, single employer defined contribution plans authorized by Minnesota Statutes,
Chapter 354C. The plans are designed to provide retirement benefits to Minnesota State Colleges and
Universities unclassified employees. An unclassified employee is one who belongs to Minnesota State Colleges
and Universities specific bargaining units. The plans cover unclassified teachers, librarians, administrators and
certain other staff. The plans are mandatory for qualified employees and vesting occurs immediately.
The administrative agent of the two plans is Teachers Insurance and Annuity Association College Retirement
Equities Fund (TIAA-CREF). Separately issued financial statements can be obtained from TIAA-CREF,
Normandale Lake Office Park, 8000 Norman Center Drive, Suite 1100, Bloomington, MN 55437.
Individual Retirement Account Plan (IRAP)
Participation — Every employee who is in unclassified service is required to participate in TRF or IRAP upon
achieving eligibility. An unclassified employee is one who serves in a position deemed unclassified according
to Minnesota Statutes. This includes presidents, vice presidents, deans, administrative or service faculty,
teachers, and other managers and professionals in academic and academic support programs.
Eligibility begins with the employment contract for the first year of unclassified service in which the employee
is hired for more than 25 percent of a full academic year, excluding summer session. An employee remains a
participant of the plan, even if employed for less than 25 percent of a full academic year in subsequent years.
38
Contributions — There are two member groups participating in the IRAP, a faculty group and an administrators
group. For both the faculty and administrators, the employer and employee statutory contribution rates are 6
percent and 4.5 percent, respectively. The contributions are made under the authority of Minnesota Statutes,
Chapter 354B
Required contributions for Minnesota State University Moorhead were:
(In Thousands)
Fiscal Year
Employer
2012
$
1,397 $
2011
1,456
2010
1,411
Employee
1,042
1,077
1,046
Supplemental Retirement Plan (SRP)
Participation — Every unclassified employee who has completed two full time years of unclassified service
with Minnesota State Colleges and Universities must participate upon achieving eligibility. The eligible
employee is enrolled on the first day of the fiscal year following completion of two full time years. Vesting
occurs immediately and normal retirement age is 55.
Contributions — Participants contribute 5 percent of the eligible compensation up to a defined maximum
annual contribution as specified in the following table
Maximum
Eligible
Annual
Member Group
Compensation
Contributions
Administrators
$ 6,000 to 60,000 $
2,700
Inter Faculty Organization
6,000 to 51,000
2,250
Middle Management Association Unclassified
6,000 to 40,000
1,700
Minnesota Association of Professional Employees Unclassified
6,000 to 40,000
1,700
Minnesota State College and Faculty Association
6,000 to 56,000
2,500
Minnesota State University Assiociation of Administrative & Service Faculty 6,000 to 50,000
2,200
Other Unclassified Members
6,000 to 40,000
1,700
The University matches amounts equal to the contributions made by participants. The contributions are made
under the authority of Minnesota Statute, Chapter 354C.
Required contributions for Minnesota State University Moorhead were:
(In Thousands)
Fiscal Year
Amount
2012
$
749
2011
723
2010
712
39
15. SEGMENT INFORMATION
A segment is an identifiable activity reported as a stand-alone entity for which one or more revenue bonds are
outstanding. A segment has a specific identifiable revenue stream pledged in support of revenue bonds and has
related expenses, gains and losses, assets, and liabilities that are required to be accounted for separately by an
external party.
Minnesota State Colleges and Universities issues revenue bonds to finance the University’s dormitories and
student unions.
Minnesota State University Moorhead Portion of the Revenue Fund
(In Thousands)
2012
CONDENSED STATEMENTS OF NET ASSETS
Assets
Current assets
Current restricted assets
Noncurrent restricted assets
Noncurrent assets
Total assets
Liabilities
Current liabilities
Noncurrent liabilities
Total liabilities
Net Assets
Invested in capital assets, net of related debt
Restricted
Total net assets
CONDENSED STATEMENTS OF REVENUES,
EXPENSES, AND CHANGES IN NET ASSETS
Operating revenues
Operating expenses
Net operating income
Nonoperating revenues (expenses)
Change in net assets
Net assets, beginning of year
Net assets, end of year
CONDENSED STATEMENTS OF CASH FLOWS
Net cash provided (used) by
Operating activities
Capital and related financing activities
Noncapital and related financing activities
Investing activities
Net increase (decrease)
Cash, beginning of year
Cash, end of year
40
$
$
$
$
$
$
17,032
6,621
7,499
21,197
52,349
2011
$
13,549
12,000
2,358
22,501
50,408
2,839
24,047
26,886
3,308
25,276
28,584
7,107
18,356
25,463
7,552
14,272
21,824
$
13,676
(10,022)
3,654
(15)
3,639
21,824
25,463
$
13,369
(10,320)
3,049
430
3,479
18,345
$ 21,824
4,733
(7,775)
882
88
(2,072)
24,739
22,667
$
$
3,884
5,599
—
1,351
10,834
13,905
24,739
16. COMMITMENTS AND CONTINGENCIES
Minnesota State Colleges and Universities is in negotiations with the faculty bargaining units for the 2011-2013
contract period. Further, the legislative sub-committee on employee relations rejected the settlements reached
by the State with MAPE and AFSCME for the same period. As a result, these contracts have not been
implemented. It is possible that the full legislature will consider and approve the settlements, during the regular
legislative session. Whether there will be retroactive pay owed to state employees as a result of negotiated
settlements, and the impact of such settlement may have on the fiscal year 2012 financials, remains
unknown. Therefore, no provision for related expense or liability, if any, has been reflected in these financial
statements.
As of June 30, 2012, Minnesota State University Moorhead has $12.3 million in construction in progress, of
which $8.6 million is related to the renovation of Dahl Hall. The estimated completion date of this project is
January 1, 2013 with a total project cost of $8.6 million.
17. RISK MANAGEMENT
Minnesota State Colleges and Universities is exposed to various risks of loss related to tort; theft of, damage to,
or destruction of asset; error or omissions; and employer obligations. Minnesota State Colleges and
Universities manages these risks through state of Minnesota insurance plans including the state of Minnesota
Risk Management Fund and through purchased insurance coverage.
Automobile liability coverage is required by the state and is provided by the Minnesota Risk Management
Fund. The University also purchased optional physical damage coverage. Property and casualty coverage is
required by Minnesota State Colleges and Universities policy. The University also purchased optional
professional liability for employed physicians, and student health services professional liability coverage.
Property coverage offered by the Minnesota Risk Management Fund is as follows:
Coverage Type
Institution deductible
Fund responsibility
Primary reinsurance coverage
Multiple reinsurance coverage
Bodily injury and property damage per person
Bodily injury and property damage per occurrence
Annual maximum paid by fund, excess by reinsurer
Maintenance deductible for additional claims
Amount
$ 2,500 to $ 250,000
Deductible to $ 1,000,000
$ 1,000,001 to $ 25,000,000
$ 25,000,001 to $ 1,000,000,000
$ 500,000
$ 1,500,000
$ 2,000,000
$ 25,000
The University retains the risk of loss and did not have any settlements in excess of coverage in the last three
years. The Minnesota Risk Management Fund purchased student intern professional liability on the open
market for the University.
Minnesota State Colleges and Universities participates in the State Employee Group Insurance Plan, which
provides life insurance, hospital, medical, and dental benefits coverage through provider organizations.
Workers’ compensation is covered through state participation in the Workers’ Compensation Reinsurance
Association, which pays for catastrophic workers’ compensation claims. Other workers’ compensation risks are
covered through self insurance for which Minnesota State Colleges and Universities pays the cost of claims
through the state Workers’ Compensation Fund. A Minnesota State Colleges and Universities workers’
compensation payment pool helps institutions manage the volatility of such claims. Annual premiums are
assessed by the pool based on salary dollars and claims history. From this pool, all workers’ compensation
claims are paid to the state Workers’ Compensation Fund.
41
The following table presents changes in the balances of workers’ compensation liability during the fiscal years
ended June 30, 2012 and 2011:
(In Thousands)
Fiscal Years Ended
June 30, 2012
June 30, 2011
Beginning
Liability
$ 879
603
Additions
$
94
350
Payments
& Other
Reductions
$
170
74
Ending
Liability
$ 803
879
18. COMPONENT UNITS
In accordance with GASB Statement No. 39, Determining Whether Certain Organizations Are Component
Units, the following Foundation affiliated with Minnesota State University Moorhead is a legally separate, tax
exempt entity, and reported as a component unit.
The Minnesota State University Moorhead Alumni Foundation, Inc. is a separate legal entity formed for the
purpose of obtaining and disbursing funds for the sole benefit of the University. The University does not
appoint any members of the board and the resources held by the Foundation can only be used by, or for, the
benefit of the University. The Foundation’s relationship with the institution is such that exclusion of the
Foundation’s financial statements would cause the University’s financial statements to be misleading or
incomplete. The Foundation is considered a component unit of the University and their statements are
discretely presented in the University’s financial statements.
The Foundation’s financial statements have been prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles as prescribed by the FASB ASC 958-205, Presentations of Financial
Statements. Net assets, which are classified on the existence or absence of donor imposed restrictions, are
classified and reported according to the following classes:

Unrestricted: net assets that are not subject to donor imposed stipulations.

Temporarily Restricted: net assets subject to donor imposed restrictions as to how the assets are to
be used.

Permanently Restricted: net assets subject to donor imposed stipulations that they be maintained
permanently by each Foundation. Generally, the donors of these assets permit the Foundation to
use all or part of the income earned on any related investments for any Foundation purposes.
The University received from the Foundation $468,829 and $465,762 in restricted funds for fiscal years 2012
and 2011, respectively. These proceeds were used for scholarships. The University has lease agreements with
the Foundation for rental properties owned by the Foundation. Information about the leases is found in Note 11.
Investments— The Foundation’s investments are presented in accordance with FASB ASC 958-320,
Investments-Debt and Equity Securities. Under ASC 958-320, investments in marketable securities with readily
determinable fair values and all investments in debt securities are reported at their fair values in the statement of
position.
Schedule of Investments at June 30
(In Thousands)
Money market & certificate of deposit
Fixed income/bonds/US treasuries
Equity securities
Other investments
Total investments
42
2012
$ 1,252
165
9,116
639
$ 11,172
Restated
2011
$
1,016
152
7,655
341
$
9,164
Capital Assets— Summaries of the Foundation’s capital assets for fiscal years 2012 and 2011 are:
Schedule of Capital Assets at June 30
(In Thousands)
Capital Assets
Capital assets, not depreciated:
Land
Capital assets, depreciated:
Building and improvements
Total accumulated depreciation
Total capital assets depreciated, net
Total capital assets, net
2012
$
425
4,577
(1,584)
2,993
$ 3,418
Restated
2011
$
425
4,780
(1,652)
3,128
$ 3,553
Long Term Obligations — The Foundation has a dormitory bond loan payable of $3,217,676 and a note payable
of $7,034 with Bremer Bank. Future scheduled debt payments are as follows:
Year Ended June 30
(In Thousands)
2013
$ 105
2014
103
2015
109
2016
114
2017
121
2,673
Thereafter
$ 3,225
Total
Endowment Funds— The Foundation’s endowment includes both donor-restricted funds and funds designated
by the Foundation Board of Trustees to function as endowments. As required by GAAP, net assets associated
with endowment funds, including funds designated by the Board of Trustees to function as endowments, are
classified and reported based on the existence or absence of donor-imposed restrictions.
Changes in endowment net assets as of June 30, 2012 are as follows:
Schedule of Endowment Net Assets
As of June 30, 2012
(In Thousands)
Total
Temporarily
Permanently
Endowment
Restricted
Restricted
Net Assets
$
Net assets, beginning of year
1,273 $
7,822 $
9,095
Contributions
—
1,725
1,725
Investment income
565
—
565
Amounts appropriated for expenditures
(200)
—
(200)
Net assets, end of year
$
1,638 $
9,547 $
11,185
Changes in endowment net assets as of June 30, 2011 are as follows:
Schedule of Endowment Net Assets
As of June 30, 2011
(In Thousands)
Total
Temporarily Permanently
Endowment
Restricted
Restricted
Net Assets
$
Net assets, beginning of year
106 $
6,577 $
6,683
Contributions
—
1,245
1,245
Investment income
1,349
—
1,349
Amounts appropriated for expenditures
(182)
—
(182)
Net assets, end of year
$
1,273 $
7,822 $
9,095
43
Restatement of Financial Statements—Temporarily restricted net assets at the beginning of 2011 and 2012 have
been adjusted for a previously collected pledge related to construction of the University’s Wellness Center.
Unrestricted net assets at the beginning of 2011 and 2012 have been adjusted to remove the University’s
Wellness Center and the related accumulated depreciation and properly record the lease as a capital lease.
Permanently and temporarily restricted net assets at the beginning of 2011 and 2012 have been adjusted to
properly reflect the life estate assets and liabilities received in past years. The June 30, 2011 financial
statements have been restated to correct these errors as follows:
Moorhead State University Alumni Foundation, Inc.
Restatement of Statements of Financial Position and Activities
Restated for the Year Ended June 30, 2011
(In Thousands)
2011 as
Previously
Reported
Pledges receivable
Less: Unamortized discount
Less: Allowance for doubtful accounts
Pledges receivable, net
$
$
2,371
(96)
(123)
2,152
2011
as
Restated
$
$
2,296
(95)
(123)
2,078
Property held for investment
Rental property and equipment
Property and equipment
Less: Accumulated depreciation
Property and equipment, net
$
638
5,092
—
(1,749)
$ 3,981
$
Capital lease receivable
$
—
$
77
Life estate obligations
$
—
$
355
Unrestricted net assets
Temporarily restricted net assets
Permanently restricted net assets
Total net assets
$
1,492
5,056
7,793
$ 14,341
$
Contributions and campaigns - permanently restricted
$
1,236
$
1,246
Investment income - unrestricted
$
24
$
32
Lease and rental income - unrestricted
$
373
$
299
Academic department support
$
1,523
$
1,498
Depreciation expense
$
149
$
135
Change in net assets - unrestricted
Change in net assets - temporarily restricted
Change in net assets - permanently restricted
Total change in net assets
$
1,154
(725)
1,236
1,665
$
922
(521)
1,246
1,647
44
$
—
—
5,204
(1,651)
$ 3,553
1,123
4,614
7,823
$ 13,560
$
REQUIRED SUPPLEMENTARY
INFORMATION SECTION
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MINNESOTA STATE UNIVERSITY MOORHEAD
SCHEDULE OF FUNDING PROGRESS FOR NET OTHER POSTEMPLOYMENT BENEFITS
Actuarial
Valuation
Date
July 1, 2006
July 1, 2008
July 1, 2010
Actuarial
Value of
Assets
(a)
$ —
—
—
Schedule of Funding Progress
(In Thousands)
Actuarial
Unfunded
Accrued Actuarial Accrued Funded
Liability
Liability
Ratio
(b)
(b - a)
(a/b)
$ 4,810
$ 4,810
0.00%
5,394
5,394
0.00
5,744
5,744
0.00
47
Covered
Payroll
(c)
$ 45,516
45,292
49,760
UAAL as a
Percentage of
Covered Payroll
((b - a)/c)
10.57%
11.91
11.54
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SUPPLEMENTARY SECTION
49
50
51
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