BEMIDJI STATE UNIVERSITY
A MEMBER OF THE
MINNESOTA STATE COLLEGES AND UNIVERSITIES SYSTEM
ANNUAL FINANCIAL REPORT
FOR THE YEARS ENDED JUNE 30, 2010 and 2009
Prepared by:
Chief Financial Officer
Deputy Hall
Bemidji State University
1500 Birchmont Drive East
Bemidji, MN 56601-2699
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
TTY: (651) 282-2660
BEMIDJI STATE UNIVERSITY
ANNUAL FINANCIAL REPORT
FOR THE YEARS ENDED JUNE 30, 2010 and 2009
TABLE OF CONTENTS
INTRODUCTION
Page
Transmittal Letter .................................................................................................................................. 5
Organization Chart ................................................................................................................................. 7
FINANCIAL SECTION
Independent Auditors’ Report .............................................................................................................. 10
Management’s Discussion and Analysis .............................................................................................. 12
Basic Financial Statements
Statements of Net Assets .............................................................................................................. 18
Bemidji State University Foundation – Statements of Financial Position ..................................... 19
Statements of Revenues, Expenses, and Changes in Net Assets ................................................... 20
Bemidji State University Foundation – Statements of Activities .................................................. 21
Statements of Cash Flows ............................................................................................................. 22
Notes to the Financial Statements ................................................................................................. 24
SUPPLEMENTAL SECTION
Components of Bemidji State University - Statement of Net Assets ................................................... 46
Components of Bemidji State University - Statements of Revenues
Expenses, and Changes in Net Assets .......................................................................................... 47
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 ................................................................... 48
1
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2
INTRODUCTION
3
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4
5
6
Organizational Chart
June 30, 2010
Board of Trustees
Minnesota State
Colleges and Universities
James H. McCormick
Chancellor
R. Hanson
President
N. Erickson
Vice President for
Academic Affairs
A. Schaffhauser
Executive Director,
Optivation
L. Erwin
Vice President for Student
Development & Enrollment
B. Hemstad
Dean of Academics,
Northwest Technical
College Bemidji
R. Bollinger
Executive Director,
University Advancement
7
W. Maki
Vice President for
Finance and Administration
R. Jones
Director of
Communications and
Marketing
The financial activity of the Bemidji State University is included in this report. The University is one of 32
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
MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited)
INTRODUCTION
The following discussion and analysis provides an overview of the financial position and activities of Bemidji State
University, a member of the Minnesota State Colleges and Universities system, for the years ended June 30, 2010,
2009, and 2008. This discussion has been prepared by management and should be read in conjunction with the
financial statements and the notes, which follow this section.
Bemidji State University (BSU) and Northwest Technical College (NTC) are aligned under the leadership of one
president. The institutions share administration, business services, information technology, select student services,
and some academic areas. BSU and NTC maintain separate institutional accreditation from the Higher Learning
Commission and all its student, personnel, and financial records are recorded in separate integrated student records
systems. For financial statement purposes, the records BSU and NTC are then combined and referred to within this
document to as the University unless specifically noted.
Bemidji State University and Northwest Technical College are two of 32 colleges and universities comprising the
Minnesota State Colleges and Universities system. Minnesota State Colleges and Universities are 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 4 serving at-large. Three student trustees: one from a state university, one
from a community college and one from a technical college, serve 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.
BSU is a comprehensive public university founded in 1919, with current student enrollment of approximately 5,000
students from nearly all 50 states and approximately 35 foreign countries. The campus is comprised of 89 acres
with 19 academic/student services buildings, seven residence buildings, and a 240 acre private forest. BSU offers
more than 65 majors and pre-professional programs. Fourteen graduate programs are offered, with online programs
in education, special education, and industrial technology. BSU operates with approximately 400 faculty members
and 200 staff.
NTC was established in 1965 and has a current student enrollment of over 1,400 students. NTC has evolved into a
technological institution offering over 40 programs in business, health, industrial technology, and human protective
services. NTCs online offerings include programs in accounting, administrative assistant, general business, medical
office technology, nursing, and supervisory management. NTC operates with approximately 70 faculty members and
35 staff.
FINANCIAL HIGHLIGHTS
The University’s financial position improved during fiscal year 2010, and ended at June 30 with assets of $106.8
million and liabilities of $40.7 million compared to fiscal year 2009 with assets of $101.6 million and liabilities of
$40.8 million and fiscal year 2008 with assets of $90.6 million and liabilities of $38.0 million. The increase in total
assets was primarily due to a $4.9 million increase in current assets. The University made efforts in fiscal year 2010
to increase cash in anticipation of budgetary challenges in the next biennium. Net assets, which represent the
residual interest in the University’s assets after liabilities are deducted, are comprised of:
•
Investment in capital assets, net of related debt was $48.4 million for fiscal year 2010 compared with $46.3
million in fiscal year 2009 and $40.5 million in fiscal year 2008.
•
Restricted net assets were $8.2 million for fiscal year 2010, $7.6 million for fiscal year 2009 and $7.1
million for fiscal year 2008. Unrestricted net assets were $9.6 million for fiscal year 2010, $6.9 million for
fiscal year 2009, and $5.0 million for fiscal year 2008.
12
USING THE FINANCIAL STATEMENTS
The University’s financial report includes three financial statements: the statement of net assets, the statement of
revenues, expenses and changes in net assets and the statement of cash flows. These financial statements are
prepared in accordance with generally accepted accounting principles (GAAP) as prescribed by the Governmental
Accounting Standards Board (GASB) through authoritative pronouncements. 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 on the University as a whole, with resources classified for accounting and reporting
purposes into three net asset categories.
STATEMENT OF NET ASSETS
The statement 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. The difference between total assets and total liabilities (net assets) is one
indicator of the current financial condition of the University. The change in net assets is an indicator of whether the
overall financial condition has improved or worsened during the year. Assets and liabilities are generally measured
using current values. One notable exception is capital assets, which are stated at historical cost less an allowance for
depreciation. A summary of the University’s assets, liabilities and net assets at June 30, 2010, 2009 and 2008,
follows:
(In Thousands)
2010
2009
2008
Current assets
$ 32,095 $ 27,191 $ 24,943
Current restricted assets
1,942
3,100
1,970
Noncurrent assets:
Student loans receivable, net
4,249
4,267
4,173
Capital assets, net
68,497
67,056
59,476
Total assets
106,783
101,614
90,562
Current liabilities
Noncurrent liabilities
Total liabilities
Net Assets
11,480
29,193
40,673
$ 66,110
11,269
29,570
40,839
$ 60,775
10,283
27,703
37,986
$ 52,576
Unrestricted current assets consist primarily of cash, cash equivalents and investments which total $27.5 million at
June 30, 2010, $23.4 million at June 30, 2009, and $20.9 million at June 30, 2008. This represents approximately
4.5 months, 3.9 months, and 3.7 months of operating expenses (excluding depreciation) for fiscal years 2010, 2009
and 2008, respectively.
Included in current assets are accounts receivables. Accounts receivable balance ending June 30, 2010 was $1.5
million comprising primarily of tuition and fees, and room and board. Accounts receivable from 2009 to 2010
increased by 3.3 percent or $.05 million while 2008 to 2009 decreased slightly by 1.3 percent or $.02 million.
Current liabilities consist primarily of accounts payable and salaries payable. Accounts payable was $1.4 million at
June 30, 2010 compared to $.8 million at June 30, 2009 compared to $1.1 million at June 30, 2008. Salaries Payable
ending June 30, 2010 were $5.6 million compared to $4.8 million June 30, 2009, and $4.6 million June 30, 2008.
The increase in both accounts payable and salaries payable were due to pending project payments and Board Early
Separation Incentive (BESI) distributions respectively. Net assets represent the residual interest in the University’s
assets after liabilities are deducted. The University’s net assets at June 30, 2010, 2009 and 2008, are summarized as
follows:
(In Thousands)
Net Assets
2010
Investments in capital assets, net of related debt
$ 48,368
Restricted expendable, bond covenants
3,874
Restricted expendable, other
4,304
Unrestricted
9,564
Total net assets
$ 66,110
13
2009
$ 46,255
3,273
4,396
6,851
$ 60,775
2008
$ 40,456
3,001
4,095
5,024
$ 52,576
Investments in capital assets, net of related debt, represent the University’s capital assets net of accumulated
depreciation and outstanding principal balances of debt.
Restricted net assets include funding received for capital projects, revenue bond covenants and the University's
capital contribution for Perkins loans.
CAPITAL AND DEBT ACTIVITIES
One of the critical factors in continuing the quality of the University’s academic programs and residential life is the
development and renewal of its capital assets. The University continues to implement a long-range plan to
modernize its complement of older facilities, balanced with some new construction. Capital outlay totaled $6.0
million in 2010, $11.8 million in 2009, and $9.9 million in 2008. Capital expenses are primarily comprised of
replacement and renovation of facilities, as well as significant investments in equipment. The two largest capital
outlay projects for 2010 were the elevator modification and Bangsberg Hall tuck pointing and abatement while the
majority for fiscal year 2009 was the renovation and addition to Sattgast Hall, and the majority for fiscal year 2008
was the renovation of Linden Hall within the University’s residential life program.
Construction in progress as of June 30, 2010 funded through operating funds included the following projects:
replacement of the multipurpose floor in the campus recreation center, enhancements to the keyless entry system in
the residence halls, emergency alert system for all campus buildings, and asset preservation and replacement
projects funded from capital bonding funds in 2009 and 2010. Additional information for capital project
commitments can be found in note 15 to the financial statements.
Long-term debt totaled $20.1 million at June 30, 2010, $20.8 million at June 30, 2009, and $18.9 million at June 30,
2008. General obligation bonds have financed Sattgast Hall addition and renovation. Revenue fund bonds funded
the renovation of Linden Hall. Additional information on capital and debt activities can be found in Notes 6 and 8
to the financial statements.
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.
(In Thousands)
Operating revenue:
Tuition, auxiliary and sales, net
Restricted student payments, net
Other income
Total operating revenue
2010
$ 25,863
9,028
542
35,433
2009
$ 25,426
8,153
705
34,284
2008
$ 23,955
7,465
515
31,935
Nonoperating revenue:
State and capital appropriations
Private grants and interest income, net
Federal and state grants
Total nonoperating revenue
Total revenue
27,735
1,628
18,657
48,020
83,453
35,473
2,451
13,761
51,685
85,969
29,254
2,452
12,455
44,161
76,096
Operating expense:
Salaries and benefits
Supplies, services and other
Depreciation
Financial aid, net
Total operating expenses
50,060
20,326
4,500
2,335
77,221
49,017
22,280
4,166
1,483
76,946
46,181
20,390
4,021
1,595
72,187
Nonoperating expense:
Total expense
897
78,118
824
77,770
785
72,972
5,335
60,775
$ 66,110
8,199
52,576
$ 60,775
3,124
49,452
$ 52,576
Increase in net assets
Net Assets, beginning of year
Net assets, end of year
14
Tuition, fees, and state appropriations are the primary sources of funding for the University’s academic and
residential life programs. Net tuition, auxiliary and sales revenue increased only slightly by 1.7 percent in fiscal
year 2010 after increasing by 6.1 percent in fiscal year 2009. The net restricted student payments increased by 10.7
percent in fiscal year 2010 after it had increased 9.2 percent in fiscal year 2009.
Federal and state grants increased by 35.5 percent in fiscal year 2010 after increasing by 10.4 percent in fiscal year
2009. Federal funding from the American Recovery and Reinvestment Act (ARRA) along with an increase in
financial aid funds are the main contributors to the $4.9 million increase in fiscal year 2010.
The following graphic depicts the revenue trends by source over the past three fiscal years.
As noted in the following chart, the demographic of our students continues to demand more flexibility in taking their
courses. This change is reflective in the ratio of on-campus credits to distance (mainly on-line) credits. In fiscal year
2008, the ratio was 80.1 percent on-campus and 19.9 percent off-campus. For fiscal year 2009 and 2010, these
ratios have changes to 78.3 percent and 76.6 percent respectively on-campus and 21.7 percent and 23.4 percent
respectively off-campus. Overall credit enrollment for fiscal year 2010 increased by 6.3 percent.
Total operating expenses increased $0.3 million or .36 percent between fiscal years 2010 and 2009 after increasing
by $4.8 million between 2009 and 2008. Salaries and benefits increased $1.0 million or 2.1 percent between fiscal
years 2010 and 2009 after increasing $2.8 million or 6.1 percent between 2009 and 2008. The increase from 2009
to 2010 is primarily due to the one-time Board Early Separation Incentive. The collective bargaining agreement(s)
for both the college and university had no salary or wage increases from fiscal year 2009 to fiscal year 2010.
15
Depreciation expense increased by $0.3 million or 8.0 percent due to the completion of the Sattgast Hall project
from fiscal years 2009 to 2010 after increasing by $0.1 million or 3.6 percent between 2009 and 2008.
Net assets increased by $5.3 million or 8.8 percent in fiscal year 2010 after increasing 15.6 percent in fiscal year
2009. The increase in 2009 was primarily due to the capital assets because of the Sattgast project while the increase
in 2010 was primarily due to the access to stimulus funding and conservative spending in preparation for budgetary
challenges in the next biennium.
COMPONENT UNIT
The Bemidji State University Foundation is a component unit of Bemidji State University. As such, the separately
audited financial statements for the foundation are included, but shown separately from those of the University in
compliance with the requirements of GASB Statement No. 39. The Foundation contributed $653,793, $772,664,
and $773,555, to the University for the fiscal years ended June 30, 2010, 2009, and 2008 respectively.
ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE
The February 2010 State of Minnesota Economic forecast indicates the state faces an approximately $5.8 billion
deficit for the 2012-2013 biennium. Anticipating this significant decrease in state funding over the next biennium,
BSU and NTC is projecting a budgetary shortfall in the range of $3.1 million to $5.5 million for the upcoming
biennium if budget adjustments are not made.
16
Anticipating this decrease in state funding over the next biennium, President Hanson has informed our campus
communities that “We must begin now to plan for the possible impact that such a reduction would have on us. To
be successful, we must sharpen our focus and begin resetting our academic vision and institutional profile.
Ultimately, our effectiveness will depend on our ability to recalibrate our programs and services, ensuring they are
distinctive, sustainable and innovative.” Recalibration will involve evaluating everything, involving everyone, and
sharpening our educational focus. Our planning process will be encompassing and result in a changed institution.
We will work to preserve our capacity to create transformational learning environments, recalibrate to sharpen our
educational focus, and be richly innovative in increasing our capacity to keep improving.
Continuing to plan for declining state appropriations and minimal tuition and fee increases, the University has
concentrated its efforts in enrollment management. With tuition and fee income being the primary source of
revenue, maintaining and growing the number of credits sold is paramount. Enrollment targets have been
established that take into account challenging regional demographics and the rapid growth and demand in on-line
learning. BSU’s 30th day enrollment numbers for Fall 2010 are in, and they show the largest total enrollment in
nearly two decades. Fuelling BSU enrollment increase is another sizeable group of freshmen and new transfer
students. BSU welcomed in 864 new freshmen this year, an 8.8 percent increase from last year, and has 320 new
transfer students, an increase of 4.9 percent. Over the last five years, freshman enrollment at BSU is up nearly 33
percent; BSU had 651 new freshmen enrolled in 2006. NTC has also had enrollment growth in the past five years of
both on campus and on line, and is taking a leadership role in the next phase in the Distance Minnesota partnership.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the University’s financial position. Those
interested in the University’s finances should direct questions concerning any of the information provided in this
report or requests for additional financial information to:
Chief Financial Officer
Deputy Hall
Bemidji State University
1500 Birchmont Drive N.E.
Bemidji, MN 56601
17
BEMIDJI STATE UNIVERSITY
STATEMENTS OF NET ASSETS
AS OF JUNE 30, 2010 AND 2009
(IN THOUSANDS)
Assets
Current Assets
Cash and cash equivalents
Investments
Grants receivable
Accounts receivable, net
Prepaid expense
Inventory
Student loans and other assets, net
Total current assets
Current Restricted Assets
Cash and cash equivalents
Total current restricted assets
Noncurrent Assets
Student loans and other assets, net
Capital assets, net
Total noncurrent assets
2010
$
Total Assets
26,952 $
597
1,107
1,519
1,073
167
680
32,095
2009
22,766
678
475
1,470
836
187
779
27,191
1,942
1,942
3,100
3,100
4,249
68,497
72,746
4,267
67,056
71,323
106,783
101,614
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
5,652
1,405
1,704
315
101
438
1,157
708
11,480
4,845
834
1,404
1,353
105
575
1,240
913
11,269
18,909
5,822
4,462
29,193
19,560
5,566
4,444
29,570
Total Liabilities
40,673
40,839
48,368
3,874
4,304
9,564
46,255
3,273
4,396
6,851
66,110 $
60,775
Net Assets
Invested in capital assets, net of related debt
Restricted expendable, bond covenants
Restricted expendable, other
Unrestricted
Total Net Assets
$
The notes are an integral part of the financial statements.
18
BEMIDJI STATE UNIVERSITY FOUNDATION
STATEMENTS OF FINANCIAL POSITION
AS OF JUNE 30, 2010 AND 2009
(IN THOUSANDS)
2010
Assets
Current Assets
Cash and cash equivalents
Investments
Pledges and contributions receivable
Other receivables and Other assets
Total current assets
Noncurrent Assets
Long-term pledges receivable
Annuities/Remainder interests/Trusts
Property and equipment, net
Other assets
Total noncurrent assets
Total Assets
$
$
Liabilities and Net Assets
Current Liabilities
Accounts payable
Annuities payable
Interest payable
Notes payable
Total current liabilities
Noncurrent Liabilities
Annuities 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
2009
60
12,896
752
29
13,737
689
108
307
35
1,139
14,876
24
20
3
2
49
$
$
$
53
10,687
537
3
11,280
878
111
342
35
1,366
12,646
11
38
23
6
78
212
732
944
993
205
734
939
1,017
395
2,874
10,614
13,883
383
1,838
9,408
11,629
14,876
$
12,646
BEMIDJI STATE UNIVERSITY
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2010 AND 2009
(IN THOUSANDS)
2010
Operating Revenues
Tuition, net
Fees, net
Sales, 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
Private grants
Federal grants
State grants
Interest income
Interest expense
Grants to other organizations
Total nonoperating revenue (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
21,326 $
2,788
1,749
9,028
542
35,433
2009
20,257
2,797
2,372
8,153
705
34,284
50,060
9,662
3,853
1,637
4,500
2,335
5,174
77,221
(41,788)
49,017
10,087
4,271
1,347
4,166
1,483
6,575
76,946
(42,662)
24,383
1,551
13,933
4,724
177
(898)
(100)
43,770
27,668
2,335
9,411
4,350
288
(778)
(172)
43,102
1,982
440
3,352
1
5,335
7,805
(46)
8,199
60,775
52,576
66,110 $
60,775
BEMIDJI STATE UNIVERSITY FOUNDATION
STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED JUNE 30, 2010 AND 2009
(IN THOUSANDS)
2010
Support and Revenue
Contributions
Endowment gifts
Unrealized losses
Investment income
Program income
Other income
Total support and revenue
$
Expenses
Program services
Scholarships
Special projects
Total program services
Supporting services
Management and general
Fundraising
Total supporting services
Total expenses
Change in Net Assets
Net Assets, Beginning of Year
Net Assets, End of Year
$
The notes are an integral part of the financial statements.
21
2,444
891
(15)
1,410
67
30
4,827
2009
$
2,860
583
(28)
(2,013)
66
15
1,483
680
1,452
2,132
773
1,489
2,262
136
305
441
2,573
71
377
448
2,710
2,254
(1,227)
11,629
12,856
13,883
$
11,629
BEMIDJI STATE UNIVERSITY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2010 AND 2009
(IN THOUSANDS)
2010
Cash Flows from Operating Activities
Cash received from customers
Cash repayment of program loans
Cash paid to suppliers for goods or services
Cash payments to employees
Financial aid disbursements
Cash payments of program loans
Net cash flows used in operating activities
$
36,318
512
(20,589)
(49,202)
(2,317)
(534)
(35,812)
2009
$
34,743
516
(23,536)
(48,604)
(1,435)
(633)
(38,949)
Cash Flows from Noncapital Financing Activities
Appropriations
Agency activity
Federal grants
State grants
Private grants
Grants to other organizations
Net cash flows from noncapital financing activities
24,383
(137)
13,357
4,724
1,551
(100)
43,778
27,668
250
9,560
4,350
2,335
(172)
43,991
Cash Flows from Capital and Related Financing Activities
Investment in capital assets
Capital appropriation
Proceeds from sale of capital assets
Proceeds from borrowing
Proceeds from bond premium
Interest paid
Repayment of lease principal
Repayment of note principal
Repayment of bond principal
Net cash flows from capital and related financing activities
(6,734)
3,352
16
705
96
(1,023)
(350)
(26)
(1,230)
(5,194)
(10,492)
7,805
2,565
53
(824)
(108)
(21)
(633)
(1,655)
Cash Flows from Investing Activities
Proceeds from sales and maturities of investments
Investment earnings
Net cash flows from investing activities
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
$
The notes are an integral part of the financial statements.
22
100
156
256
478
478
3,028
3,865
25,866
22,001
28,894
$
25,866
BEMIDJI STATE UNIVERSITY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2010 AND 2009
(IN THOUSANDS)
2010
Operating Loss
$
Adjustment to Reconcile Operating Loss
Net Cash Flows used in Operating Activities
Depreciation
Provision for loan defaults
Loan principal repayments
Loans issued
Loans forgiven
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 be added to operating income
Net cash flow used in operating activities
Non-Cash Investing, Capital, and Financing Activities
Capital projects on account
Gain (loss) on disposal of capital assets
Change in fair market value of investment
Investment earnings on account
Amortization of bond premium
$
$
23
(41,788)
2009
$
(42,662)
4,500
(65)
512
(534)
107
4,166
(63)
516
(633)
85
20
(49)
310
807
51
18
243
56
5,976
(35,812)
(72)
19
(662)
229
185
48
(139)
34
3,713
(38,949)
576
1
19
18
42
$
$
1,353
(46)
(5)
58
34
BEMIDJI STATE UNIVERSITY
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2010 AND 2009
1.
SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Basis of Presentation — The reporting policies of Bemidji State University, a member of the Minnesota State
Colleges and Universities system, conform to generally accepted accounting principles (GAAP) 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
Bemidji State University.
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. The University 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. The Bemidji State University Foundation, Inc. is
considered significant to the University and is included as a discretely presented component unit and separately
identified in Note 17. Complete financial statements may be obtained from the Bemidji State University
Foundation, 1501 Birchmont Drive Northeast, Bemidji, MN 56601-2699.
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
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 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 and College without
Board approval. The budget of the University can be legally amended by the authority of the Vice
Chancellor/Chief Financial Officer.
The 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 the 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 is 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, and most fees are in the state treasury. The
University also has accounts in local banks. The activities handled through local banks include financial aid,
student payroll, auxiliary, and student activities.
Investments — The Minnesota State Board of Investment (SBI) 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 Office of the Chancellor and
allocated to the colleges and universities as part of the appropriation allocation process.
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.
Receivables — Receivables are shown net of an allowance for uncollectible accounts.
Inventories — Inventories are valued at cost using the retail 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:
Buildings
Building Improvements
Equipment
Library Collections
35-40 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, 2008;
$5,000 and over for items purchased between July 1, 2003 and June 30, 2008; and $2,000 and over for items
purchased prior to July 1, 2003. Buildings, building improvements, and internally developed software includes
all projects with a cost of $250,000 and over for projects started since July 1, 2008, and $100,000 and over for
projects started prior to July 1, 2008. All land and library collection purchases are capitalized regardless of
amount spent.
25
Funds Held for Others — Funds held for others are primarily assets held in a custodial capacity such as student
organizations, student loans or for other clearing accounts that serve as a flow-through conduit.
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 notes payable, compensated absences, net other postemployment
benefits, workers’ compensation claims, early termination benefits, and capital contributions associated with
Perkins loan agreements with the U.S. 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 included herein. Details on the Revenue Fund bonds are available in the
separately audited and issued Revenue Fund annual financial report. Copies are available from the financial
reporting director, Minnesota State Colleges and Universities, Wells Fargo Place, 30 7 th St. E., Suite 350,
St. Paul, Minnesota 55101-7804.
Unearned Revenue — Unearned revenue consists primarily of tuition received, but not yet earned, for summer
session. It also includes room deposits and amounts received from grants which have not yet been earned under
the terms of the agreement.
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, and investment income.
Tuition, Fees, and Sales, Net — Tuition, fees, and sales are reported net of scholarship allowances of
$13,761,990 and $10,996,127 for fiscal years 2010 and 2009, respectively. Sales are also net of cost of goods
sold of $689,257 and $577,606 for fiscal years 2010 and 2009, respectively.
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 of $505,583 and $486,438 for
fiscal years 2010 and 2009, respectively.
Federal Grants — The University participates in several federal grant programs. The largest programs include
Pell, Supplemental Educational Opportunity Grant, Federal Work Study, TRIO, and AmeriCorps. Federal grant
revenue is recognized as nonoperating revenue in accordance with GASB Statement No. 33, Accounting and
Financial Reporting for Nonexchange Transactions. During fiscal year 2010, $1,979,768 of federal aid was
recognized as revenue related to the American Recovery and Reinvestment Act of 2009. Of this amount,
$415,726 was used to mitigate tuition increases, which would have otherwise been necessary. 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.
Reclassifications — Certain prior year amounts have been reclassified to conform to current year presentation.
These classifications had no effect on net assets previously reported. Fiscal year 2009 federal and state grant
revenue, in the amount of $9,410,454 and $4,350,027, respectively, have been reclassified from operating to
nonoperating revenue. This reclassification increases the total operating loss by $13,760,481 while increasing
total nonoperating revenue by the same amount.
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.
26
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. For fiscal year 2010, the estimate used to calculate the allowance for uncollectible
accounts was changed to more closely align with historical receivable collections.
Net Assets — The difference between assets and liabilities is net assets. Net assets are furthered classified 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 the acquisition, construction or improvement of those
assets.
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)
2010
2009
Donations
$ 521 $ 807
Loans
502
494
Capital projects
1,626
1,747
Debt service
1,070
835
Faculty contract obligations
585
513
Total
$ 4,304 $ 4,396
Unrestricted: Net assets that are not subject to externally imposed stipulations. Unrestricted net assets may
be designated for specific purposes by action of management, Office of the Chancellor or the Board of
Trustees.
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 two checking and five savings accounts in 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 10 percent greater than the
amount on deposit.
Cash and Cash Equivalents at June 30 (In Thousands)
Carrying Amount
2010
2009
Cash, in bank
$ 1,432 $ 1,820
Restricted cash
1,941
3,100
Cash, trustee account (US Bank)
829
831
Total local cash and cash equivalents
4,202
5,751
Total treasury cash accounts
24,692
20,115
Grand Total
$ 28,894 $ 25,866
27
At June 30, 2010 and 2009, the University’s local bank balances were $1,432,461 and $1,820,140, respectively.
These balances were adjusted by items in transit to arrive at the University’s cash in bank balance.
The University’s balance in the 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 (SBI) manages the majority of the state’s investments.
All investments managed by SBI are governed by Minnesota Statutes, Chapters 11A and 356A. Minnesota
Statutes, Section 11A.24, broadly restricts investments to obligations and stocks of 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 asset classes and contain specific restrictions to ensure the quality of the investments.
Within statutory parameters, SBI 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.03. This statute limits investments to the top quality rating categories of a nationally
recognized rating agency.
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
with 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 a debt 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 investments. As of
June 30, the University had the following investments:
Fair Value as of June 30
(In Thousands)
Investment Type
2010
2009
Stock
$ 52 $ 33
Certificate of deposit
545
645
Total
$ 597 $ 678
Securities Lending Transactions — State statutes do not prohibit the state of Minnesota from participating in
securities lending transactions. The Minnesota State Board of Investment (SBI) has, by way of custodial trust
agreements, authorized State Street Bank and Trust Company (State Street) and Wells Fargo Bank, Minnesota,
N.A. (Wells Fargo) to act as agents in lending Minnesota’s securities to broker/dealers and banks pursuant to a
form of loan agreement.
28
During fiscal years 2010 and 2009, State Street and Wells Fargo lent, on behalf of the state of Minnesota,
certain securities held by State Street or Wells Fargo as custodian and received cash (both United States and
foreign currency) and securities issued or guaranteed by the United States government, sovereign debt of
foreign countries and irrevocable bank letters of credit as collateral. The securities lending activity for Wells
Fargo ceased in May 2009. Neither State Street nor Wells Fargo has the ability to pledge or sell collateral
securities absent a borrower default. Borrowers were required to deliver collateral for each loan in amounts
equal to not less than 100 percent of the fair value of the loaned securities.
The state of Minnesota did not impose any restrictions during the fiscal years on the amount of the loans that
either State Street or Wells Fargo made on its behalf. State Street and Wells Fargo indemnified the state of
Minnesota by agreeing to purchase replacement securities or return the cash collateral in the event a borrower
failed to return a loaned security or pay distributions thereon. No borrower failed to return loaned securities or
pay distributions thereon during fiscal years 2010 or 2009. In addition, there were no losses during the fiscal
years resulting from default of the borrowers, State Street, or Wells Fargo.
During fiscal years 2010 and 2009, the state of Minnesota and the borrowers maintained the right to terminate
all securities lending transactions on demand. The cash collateral received on each loan was invested in the
separately managed funds of the Minnesota State Board of Investment (SBI). Because the loans were
terminable at will, their duration did not generally match the duration of the investments made with cash
collateral. On June 30, 2010 and 2009, the state of Minnesota had no credit risk exposure to borrowers because
the amounts the state owed the borrowers exceeded the amounts the borrowers owed the state.
The University had no security lending allocation for fiscal years 2010 and 2009. The following tables provide
information related to the securities invested by State Street:
Security Lending Analysis, State Street, at June 30
(In Thousands)
2010
2009
Fair value of securities on loan $3,845,017 $6,587,602
Collateral held
3,720,275 6,829,949
Average duration
8 days
37 days
Average weighted maturity
43 days
201 days
3.
ACCOUNTS RECEIVABLE
The accounts receivable balances are made up primarily of receivables from individuals and businesses. At
June 30, 2010 and 2009, the total accounts receivable balances for the University were $2,064,873 and
$2,058,835, respectively, less an allowance for uncollectible receivables of $545,303 and $588,226,
respectively.
Summary of Accounts Receivable at June 30
(In Thousands)
2010
Tuition
$ 1,302
Room and board
128
Sales and services
130
Fees
94
Interest
1
Other
409
Total accounts receivable
2,064
Allowance for uncollectible accounts
(545)
Net accounts receivable
$ 1,519
29
2009
$ 1,379
259
101
99
1
219
2,058
(588)
$ 1,470
The allowance for uncollectible accounts has been computed based on the following aging schedules:
Fiscal Year 2010
Allowance
Percentage
Less than 1 year
15%
1 to 3 years
45%
3 to 5 years
70%
Over 5 years
95%
4.
Fiscal Year 2009
Allowance
Percentage
Less than 1 year
2%
1 to 2 years
50%
Over 2 years
100%
PREPAID EXPENSE
Prepaid expense consists of $1,072,524 and $835,516 for fiscal years 2010 and 2009, respectively, which have
been deposited in the state’s Debt Service Fund for future general obligation bond payments. 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.
5.
LOANS RECEIVABLE
Loans receivable balances consist 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. Minnesota State
Colleges and Universities’ loan collections unit is responsible for loan collections for the University. At
June 30, 2010 and 2009, the total loans receivable for this program were $5,234,522 and $5,318,498,
respectively, less an allowance for uncollectible loans of $385,591 and $450,676, respectively.
6.
CAPITAL ASSETS
Summaries of changes in capital assets for fiscal years 2010 and 2009 follow:
Year Ended June 30, 2010
(In Thousands)
Beginning
Completed
Balance Increases Decreases Construction
Capital assets, not depreciated:
Land
$
Construction in progress
Total capital assets, not depreciated
1,091
6,861
7,952
$
—
4,853
4,853
$
—
—
—
$
Ending
Balance
— $
(9,551)
(9,551)
1,091
2,163
3,254
Capital assets, depreciated:
Buildings and improvements
Equipment
Library collections
Total capital assets, depreciated
116,025
9,937
3,212
129,174
—
570
537
1,107
—
912
454
1,366
9,551
—
—
9,551
125,576
9,595
3,295
138,466
Less accumulated depreciation:
Buildings and improvements
Equipment
Library collections
Total accumulated depreciation
60,915
7,353
1,802
70,070
3,428
601
471
4,500
—
893
454
1,347
—
—
—
—
64,343
7,061
1,819
73,223
Total capital assets depreciated, net
Total capital assets, net
59,104
$ 67,056
(3,393)
$ 1,460 $
30
19
19
$
9,551
—
$
65,243
68,497
Year Ended June 30, 2009
(In Thousands)
Capital assets, not depreciated:
Land
$
Construction in progress
Total capital assets, not depreciated
7.
Beginning
Balance
1,091
2,015
3,106
Increases
$
—
10,701
10,701
Completed
Decreases Construction
$
—
—
—
$
Ending
Balance
— $
(5,855)
(5,855)
1,091
6,861
7,952
Capital assets, depreciated:
Buildings and improvements
Equipment
Library collections
Total capital assets, depreciated
110,170
10,100
3,150
123,420
—
625
466
1,091
—
788
404
1,192
5,855
—
—
5,855
116,025
9,937
3,212
129,174
Less accumulated depreciation:
Buildings and improvements
Equipment
Library collections
Total accumulated depreciation
57,877
7,425
1,748
67,050
3,038
670
458
4,166
—
742
404
1,146
—
—
—
—
60,915
7,353
1,802
70,070
Total capital assets depreciated, net
Total capital assets, net
56,370
$ 59,476
5,855
—
59,104
$ 67,056
(3,075)
$ 7,626 $
46
46
$
ACCOUNTS PAYABLE
Accounts payable represent amounts due for goods and services received prior to the end of the fiscal year.
Summary of Accounts Payable at June 30
(In Thousands)
2010
2009
Purchased services
$ 226 $ 339
Supplies
219
84
Capital projects
261
1
Repairs and maintenance
523
172
Other payables
176
238
Total
$ 1,405 $ 834
In addition, as of June 30, 2010 and 2009, the University had payable from restricted assets in the amounts of
$314,797 and $1,352,698, which was related to capital projects financed by general obligation bonds and
revenue bonds.
31
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 2010 and 2009 follow:
Liabilities for:
Bond premium
Capital leases
General obligation bonds
Notes payable
Revenue bonds
Total long term debt
Liabilities for:
Bond premium
Capital leases
General obligation bonds
Notes payable
Revenue bonds
Total long term debt
Year Ended June 30, 2010
(In Thousands)
Beginning
Balance
Increases Decreases
$
304
350
9,444
397
10,305
$ 20,800
$
$
96
—
705
—
—
801
$
$
42
350
712
26
405
1,535
Ending
Balance
$
358
—
9,437
371
9,900
$ 20,066
Year Ended June 30, 2009
(In Thousands)
Beginning
Balance
Increases Decreases
$
286
458
7,474
418
10,305
$ 18,941
$
53
—
2,565
—
—
$ 2,618
$
35
108
595
21
—
759
$
Current
Portion
$
$
Ending
Balance
$
304
350
9,444
397
10,305
$ 20,800
—
—
704
28
425
1,157
Current
Portion
$
—
112
698
25
405
$ 1,240
The changes in other compensation benefits for fiscal years 2010 and 2009 follow:
Liabilities for:
Compensated absences
Early termination benefits
Net other postemployment benefits
Workers’ compensation
Total other compensation benefits
11
Liabilities for:
Compensated absences
Early termination benefits
Net other postemployment benefits
Workers’ compensation
Total other compensation benefits
Year Ended June 30, 2010
(In Thousands)
Beginning
Balance
Increases
$
5,646
320
382
131
6,479
$
$ 1,317
—
390
30
$ 1,737
$
1,060
217
287
122
1,686
$
Year Ended June 30, 2009
(In Thousands)
Beginning
Balance
Increases
$
$
5,339
645
206
104
6,294
32
$ 1,162
245
381
82
$ 1,870
Ending
Balance
Decreases
Decreases
$
$
855
570
205
55
1,685
$
$
5,903
103
485
39
6,530
Current
Portion
$
$
Ending
Balance
$ 5,646
320
382
131
$ 6,479
588
103
—
17
708
Current
Portion
$
$
574
287
—
52
913
Bond Premium — In fiscal years 2010 and 2009, bonds were issued resulting in premiums of $95,610 and
$53,203, respectively. Amortization is calculated using the straight line method and amortized over the average
remaining life of the bonds.
Capital Leases — Liabilities for capital leases include those leases that meet the criteria of FASB Accounting
Standards Codification (ASC) 840, Leases (previously FAS Statement No. 13). See Note 11 for details.
General Obligation Bonds Liability — 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. The 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.
Notes Payable — Notes payable consists of State Energy Efficiency Program loans granted by energy
companies in order to improve energy efficiency in college and university buildings. Projects completed under
Minnesota Statutes, Section 16C.14, have an interest component. The interest rate is tied to the prime interest
rate at the time of the project.
Revenue Bonds Liability — 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 dormitory, residence
halls, food service, student union, and other revenue producing and related facilities at the state universities.
Revenue bonds currently outstanding have interest rates of 4 percent and 4.5 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 fiscal year 2027. Annual principal and interest payments on the bonds are expected to require less than
8.53 percent of net revenues. The total principal and interest remaining to be paid on the bonds is $13,773,619.
Principal and interest paid for the current year and total customer net revenues were $814,375 and $9,630,433,
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.
Early Termination Benefits — Early termination benefits are benefits received for discontinuing services earlier
than planned. See Note 9 for additional information.
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 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 liabilities of $4,462,123 and $4,444,052 at June 30, 2010 and 2009, respectively,
represent the amounts the University would owe the federal government if it were to discontinue the Perkins
loan program. The net change is $18,071 and $47,938 for the fiscal years 2010 and 2009 respectively.
33
Principal and interest payment schedules are provided in the following table for general obligation bonds, notes
payable and revenue bonds. There are no payment schedules for bond premium, compensated absences, early
termination benefits, net other postemployment benefits, or workers’ compensation.
2011
2012
2013
2014
2015
2016-2020
2021-2025
2026-2030
Total
9.
General
Obligation Bonds
Principal Interest
$
705 $ 443
705
410
680
377
681
344
657
312
2,934
1,098
2,176
462
899
71
$ 9,437 $ 3,517
(In Thousands)
Notes Payable
Principal
Interest
$
28 $ 18
31
17
34
15
38
13
41
11
199
21
—
—
—
—
$
371 $ 95
Revenue Bonds
Principal
Interest
$
425 $
397
440
380
455
361
475
343
490
324
2,735
1,305
3,340
695
1,540
69
$ 9,900 $ 3,874
EARLY TERMINATION BENEFITS
Early termination benefits are defined as benefits received for discontinuing services earlier than planned.
Certain bargaining unit contracts—Minnesota State College Faculty (MSCF), Inter Faculty Organization (IFO),
and Minnesota State University Association of Administrative Service Faculty (MSUAASF)—provide for this
benefit. The following is a description of the different benefit arrangements for each contract, including the
number of retired faculty receiving the benefit, and the amount of future liability as of the end of fiscal years
2010 and 2009.
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 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.
The number of retired faculty who received this benefit and the amount of future liability for those faculty, as of
the end of fiscal years 2010 and 2009 follow:
Fiscal Year
2010
2009
Number
of Faculty
3
8
Future Liability
(In Thousands)
$ 89
245
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.
34
The number of retired faculty who received this benefit and the amount of future liability for those faculty as of
the end of fiscal years 2010 and 2009 follow:
Fiscal Year
2010
2009
Number
of Faculty
1
3
Future Liability
(In Thousands)
$ 14
75
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, 2008, there were approximately 35 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 Postemployment 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 2010 and 2009, the amount actually
contributed to the plan, and changes in the net OPEB obligation:
Components of the Annual OPEB Cost
(In Thousands)
2010
2009
Annual required contribution (ARC)
$ 387 $ 379
Interest on net OPEB obligation
18
10
Adjustment to ARC
(15)
(8)
Annual OPEB cost
390
381
Contributions during the year
(287) (205)
Increase in net OPEB obligation
103
176
Net OPEB obligation, beginning of year
382
206
Net OPEB obligation, end of year
$ 485 $ 382
Bemidji State University annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for fiscal years 2010 and 2009 were as follows:
For Year Ended June 30
(In Thousands)
Beginning of the year net OPEB obligation $
Annual OPEB cost
Employer contribution
End of year net OPEB obligation
$
Percentage contributed
2010
382
390
(287)
485
73.59%
35
$
$
2009
206
381
(205)
382
53.81%
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
July 1, 2008
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)
$ 4,733
$ 4,733
0.00%
Covered
Payroll
(c)
$ 38,245
UAAL as a
Percentage of
Covered Payroll
((b - a)/c)
12.38%
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, 2008 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 8.97 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 — The University is committed under various leases primarily for building space. These
leases are considered for accounting purposes to be operating leases. Lease expenses for the years ended
June 30, 2010 and 2009, totaled $236,628 and $226,875, respectively. Future obligations consist primarily of
an operating lease for the City of Bemidji’s Regional Event Center starting October 2010. For more
information, see Note 15. Future minimum lease payments for existing lease agreements are as follows:
Year Ended June 30
(In Thousands)
Fiscal Year
Amount
2011
$ 404
2012
390
2013
390
2014
274
2015
224
2016-2020
1,170
2021-2025
1,356
2026-2030
1,572
2031-2035
86
Total
$ 5,866
Capital Leases — In fiscal year 2007, the University entered into a five year $556,000 capital lease (principal
and interest) for a keyless entry project. The balance due was paid in full during fiscal year 2010.
36
12. OPERATING EXPENSES BY FUNCTIONAL CLASSIFICATION
The following tables provide information related to the operating expenses by functional classification:
For the Year Ended June 30, 2010
(In Thousands)
Salaries/
Description
Benefits
Other
Academic support
$
5,821
$ 2,197
Institutional support
6,555
3,168
Instruction
23,507
2,018
Operation & maintenance of plant
3,353
3,206
Public service
126
192
Research
303
—
Student services
7,492
3,158
Auxiliary enterprises
2,903
6,388
Depreciation
—
4,500
Scholarships & fellowships
—
2,334
Total operating expenses
$ 50,060
$ 27,161
Total
8,018
9,723
25,525
6,559
318
303
10,649
9,291
4,500
2,335
$ 77,221
$
For the Year Ended June 30, 2009
(In Thousands)
Description
Academic support
Institutional support
Instruction
Operation & maintenance of plant
Public service
Research
Student services
Auxiliary enterprises
Depreciation
Scholarships & fellowships
Total operating expenses
Salaries/
Benefits
$
5,688
6,060
22,808
3,511
151
257
7,666
2,876
—
—
$ 49,017
Other
$ 2,622
3,781
1,881
2,983
134
34
3,800
7,045
4,166
1,483
$ 27,929
$
$
Total
8,310
9,841
24,689
6,494
285
291
11,466
9,921
4,166
1,483
76,946
13. 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 Minnesota 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.
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.
37
The annuity formula is the greater of a step rate with a flat rate reduction for each month of early retirement, or
a level rate (the higher step rate) with an actuarial reduction for early retirement. 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. Beginning July 1, 2007 the funding
requirement for both employer and employee was 4.25%. The funding contribution rate increases 0.25 percent
in each of the subsequent years until reaching 5 percent from July 1, 2010, and thereafter. For the period
July 1, 2009 to June 30, 2010, the funding requirement is 4.75 percent for both employer and employee. Actual
contributions were 100 percent of required contributions.
Required contributions for Bemidji State University were:
(In Thousands)
Fiscal Year
Amount
2010
$ 460
2009
443
2008
415
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.
The TRF 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 participants 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 retirement, or a level rate (the higher step rate) with an actuarially based reduction for early
retirement. 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, 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. Effective July 1, 2007, the funding
requirement is 5.5 percent for both employer and employee coordinated members. Beginning July 1, 2011, both
employee and employer contribution rate increases will be phased-in with a 0.5 percent increase occurring
every July 1 over four 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 Bemidji State University were:
(In Thousands)
Fiscal Year
Amount
2010
$ 454
2009
471
2008
438
Minnesota State Colleges and Universities Defined Contribution Retirement Fund
General Information — The 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, Chapters 354B and 354C. The plans are designed to provide retirement
38
benefits to Minnesota State Colleges and Universities unclassified employees. The plans cover unclassified
teachers, librarians, administrators and certain other staff. The plans are mandatory for qualified employees.
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 — Each 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.
Contributions — There are two member groups participating in the IRAP, a faculty group and an administrators
group. For 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 Bemidji State University were:
(In Thousands)
Fiscal Year Employer
Employee
2010
$
998
$
749
2009
957
716
2008
814
608
Supplemental Retirement Plan (SRP)
Participation — Each 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 eligible compensation up to a defined maximum annual
contribution as specified in the following table:
Member Group
Inter Faculty Organization
MN State University Association of Administrative & Service Faculty
Administrators
Middle Management Association Unclassified
Minnesota Association of Professional Employees Unclassified
Commissioner’s Plan
Eligible
Compensation
$ 6,000 to 51,000
6,000 to 50,000
6,000 to 60,000
6,000 to 40,000
6,000 to 40,000
6,000 to 40,000
Max. Annual
Contribution
$
2,250
2,200
2,700
1,700
1,700
1,700
The University matches amounts equal to the contributions made by participants. The contributions are made
under the authority of Minnesota Statutes, Chapter 354C. Required contributions for the University were:
(In Thousands)
Fiscal Year
Amount
2010
$ 564
2009
558
2008
462
39
14. 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 by an external party to be accounted for
separately. Minnesota State Colleges and Universities issues revenue bonds to finance the University
dormitories and student unions.
Bemidji State University Portion of the Revenue Fund
(In Thousands)
CONDENSED STATEMENTS OF NET ASSETS
Assets:
Total current assets
Total current restricted assets
Total noncurrent assets
Total assets
Liabilities:
Total current liabilities
Total noncurrent liabilities
Total liabilities
Net Assets:
Invested in capital assets, net of related debt
Restricted net assets
Total net assets
2010
$ 4,730
1,626
12,458
18,814
2009
$
4,205
1,747
13,020
18,972
1,145
9,604
10,749
1,130
10,033
11,163
2,565
5,500
$ 8,065
2,789
5,020
7,809
$
CONDENSED STATEMENTS OF REVENUES,
EXPENSES, AND CHANGES IN NET ASSETS
Total operating revenues
Total operating expenses
Operating gain (loss)
Total nonoperating revenues (expenses)
Change in net assets
Total net assets, beginning of year
Total net assets, end of year
$ 9,631
(9,022)
609
(353)
256
7,809
$ 8,065
$
CONDENSED STATEMENTS OF CASH FLOWS
Net cash flows from operating activities
Net cash flows used in capital and related financing activities
Net cash flows from investing activities
Net increase in cash & cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
$ 1,526
(1,227)
105
404
5,636
$ 6,040
$
$
$
8,855
(8,988)
(133)
(231)
(364)
8,173
7,809
1,055
(984)
231
302
5,334
5,636
15. COMMITMENTS
On July 19, 2010, fiscal year 2009 bond proceeds were delegated to the University to continue the design phase
for the Birch Hall renovation project in the sum of $505,635. The University expects to receive proceeds of
about $6,500,000 from the system revenue bond sale in February 2011 and begin construction on the project in
May 2011.
On November 19, 2008, the Board of Trustees authorized a hockey arena lease at the new City of Bemidji’s
Regional Event Center. The 20 year lease has an expected value at approximately $5 million over the term, and
40
began October 2010 for Bemidji State University men’s and women’s hockey programs. The lease was
executed with the City of Bemidji on January 26, 2009.
16. RISK MANAGEMENT
Minnesota State Colleges and Universities is exposed to various risks of loss related to tort; theft of, damage to,
or destruction of assets; error or omissions; and employer obligations. Minnesota State Colleges and
Universities manage 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 purchases optional physical damage coverage for their newest or most expensive
vehicles.
While property and casualty coverage is required by Minnesota State Colleges and Universities policy,
campuses may select optional coverage. The University purchased optional coverage for professional liability
for employed physicians and student health services professional liability. Property coverage offered by the
Minnesota Risk Management Fund is as follows:
Institution deductible
Fund responsibility
Primary re-insurer coverage
Multiple re-insurers’ 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
$25,000
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
$4,000,000
$25,000
The University retains the risk of loss. The University did not have any settlements in excess of coverage in the
last three years.
The Minnesota Risk Management Fund purchased student intern professional liability, dental clinics
professional liability, and a variety of bonds on the open market for the University and College.
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.
The following table presents changes in the balances of workers’ compensation claims liability during the fiscal
years ended June 30, 2010 and 2009.
(In Thousands)
Net Additions
Beginning Liability
and Changes
Payments
Ending Liability
Fiscal Year Ended 6/30/10 $
131
$
30
$
122
$
39
Fiscal Year Ended 6/30/09
104
82
55
131
41
17. COMPONENT UNITS
In accordance with Governmental Accounting Standards Board (GASB) Statement No. 39, Determining
Whether Certain Organizations Are Component Units, the following foundation affiliated with Bemidji State
University is a legally separate, tax exempt entity and reported as a component unit.
The Bemidji State University Foundation 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 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 Financial Accounting Standards Board (FASB)
Accounting Standards Codification (ASC) 958-205, Presentation of Financial Statements (previously FAS
117). 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: Net assets that are not subject to donor imposed stipulations.
Temporarily Restricted Net Assets: Net assets subject to donor imposed restrictions as to how the
assets be used.
Permanently Restricted Net Assets: 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 general or specific
purposes.
In fiscal years 2010 and 2009, Bemidji State University received $653,793 and $772,664, respectively, from its
Foundation. These proceeds were used for student scholarships.
Investments — The Foundation’s investments are presented in accordance with FASB ASC 958-320,
Investments-Debt and Equity Securities (previously FAS 124). 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 financial position. At June 30, 2010, $10,486,109 of the foundation's total
investments was related to endowments.
Schedule of Investments at June 30
(In Thousands)
Investments
2010
Money market & certificate of deposit $ 260
Fixed income/bonds/U.S. treasuries
4,592
Equity based mutual funds
5,455
Real estate
1,160
Other investments
1,429
Total investments
$ 12,896
42
2009
21
4,257
3,956
1,992
461
$ 10,687
$
Capital Assets — Summaries of the foundations’ capital assets for fiscal years 2010 and 2009 are:
Schedule of Capital Assets at June 30
(In Thousands)
Investments
2010
Capital assets, depreciated
Buildings and improvements
$ 532
Equipment
124
Total capital assets, depreciated
656
Less accumulated depreciation
349
Total capital assets depreciated, net
$ 307
2009
$
$
532
257
789
447
342
Long Term Obligations — Bemidji State University Foundation, Inc. has a $732,250 secured note from
Security Bank USA. The full principle balance of the note is payable on August 21, 2013. Interest only
payments will be due quarterly, calculated as a variable interest rate. In addition, the Foundation has a $1,899
note payable to GMAC Financing due in the year ended June 30, 2011.
43
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44
SUPPLEMENTAL SECTION
As of July 1, 2004, the Bemidji campus of the former Northwest Technical College was aligned with Bemidji
State University under the name Northwest Technical College – Bemidji. The activities of the College were
consolidated with the University effective July 1, 2005 and were first included in the University’s fiscal year
2006 annual financial report. Included in the supplementary section are the unaudited financial statements of
both individual institutions.
45
COMPONENTS OF BEMIDJI STATE UNIVERSITY (Unaudited)
STATEMENTS OF NET ASSETS
AS OF JUNE 30, 2010
(IN THOUSANDS)
Bemidji
State
University
Assets
Current Assets
Cash and cash equivalents
Investments
Grants receivable
Accounts receivable, net
Prepaid expense
Inventory
Student loans and other assets, net
Total current assets
Current Restricted Assets
Cash and cash equivalents
Total current restricted assets
Noncurrent Assets
Student loans and other assets, 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
$
46
23,575 $
597
963
831
950
23
659
27,598
Northwest
Technical
CollegeBemidji
Total
3,377 $
144
688
123
144
21
4,497
26,952
597
1,107
1,519
1,073
167
680
32,095
1,931
1,931
11
11
1,942
1,942
4,249
62,220
66,469
6,277
6,277
4,249
68,497
72,746
95,998
10,785
106,783
4,939
1,304
1,441
304
101
438
1,047
637
10,211
713
101
263
11
110
71
1,269
5,652
1,405
1,704
315
101
438
1,157
708
11,480
17,245
5,108
4,462
26,815
1,664
714
2,378
18,909
5,822
4,462
29,193
37,026
3,647
40,673
43,866
3,874
4,184
7,048
4,502
120
2,516
48,368
3,874
4,304
9,564
58,972 $
7,138 $
66,110
COMPONENTS OF BEMIDJI STATE UNIVERSITY (Unaudited)
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
AS OF JUNE 30, 2010
(IN THOUSANDS)
Bemidji
State
University
Operating Revenues
Tuition, net
Fees, net
Sales, 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
Private grants
Federal grants
State grants
Interest income
Interest expense
Grants to other organizations
Total nonoperating revenue (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
$
47
18,503 $
2,565
1,758
9,028
434
32,288
Northwest
Technical
CollegeBemidji
2,823 $
223
(9)
108
3,145
Total
21,326
2,788
1,749
9,028
542
35,433
43,304
8,959
3,116
1,340
4,033
1,482
4,610
66,844
(34,556)
6,756
703
737
297
467
853
564
10,377
(7,232)
50,060
9,662
3,853
1,637
4,500
2,335
5,174
77,221
(41,788)
20,890
1,259
10,824
4,081
169
(807)
36,416
3,493
292
3,109
643
8
(91)
(100)
7,354
24,383
1,551
13,933
4,724
177
(898)
(100)
43,770
1,860
122
1,982
3,193
4
5,057
159
(3)
278
3,352
1
5,335
53,915
6,860
60,775
58,972 $
7,138 $
66,110
48
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