BOT: Audit records break-even year, liabilities increasing
An audit of the 2013-14 fiscal year reports Central Michigan University had an "above break-even year," according to Plante Moran consultants.
Vicki VanDenBerg, of Plante Moran, gave a presentation to CMU's Board of Trustees on Thursday, and informing the group the university was given a clean, unmodified opinion, the highest level of assurance they can give.
"There was a $23.4 million increase in total assets and deferred outflows, primarily due to a $15.3 million increase in endowment investments and an increase of $7.8 million in net capital assets," VanDenBerg told trustees.
CMU is also making wise choices in investments, VanDenBerg added. She reported a $12.7 million increase in non-operating revenue because of a $13.4 million increase in investment income. This includes $20.2 million in unrealized gains because of favorable market conditions.
Despite a positive overall net position increase of $20.5 million, the presentation wasn't all good news.
"You did gain $2.9 million in total liabilities, though, primarily due to an increase of $1.9 million in unearned revenue and an increase of $5.9 million in accounts payable," VanDenBerg said. "That was offset by a $4.8 million decrease in long-term debt."
Coupling the bad news, CMU had a $3.5 million decrease in operating revenue from decreased student tuition dollars.
"There was also a $21.4 million increase in operating expenses, primarily from a $14.3 million increase in compensation, of which $6.8 million was from benefit increases," VanDenBerg said. "This is because of the medical school. There was also a $9.3 million increase in supplies and other expenses also primarily related to the startup of the medical school."
The audit went as planned, VanDenBerg said, and everyone at the university was very cooperative.
The next step for the university is meeting the Governmental Accounting Standards Board expectations for accounting and reporting for pensions.
CMU must record their unfunded pension benefit obligation as a liability on the university's statement of position. They will also have to record the proportionate share of MPSERS liability.
MPSERS payments will bring CMU's liability to an estimated $102 million. However, this will directly reduce the unrestricted net position in 2015.
