Audit Reports | Budget Development | Directory
• The university received an unqualified (clean) opinion on its’ financial statements presented for the year ended June 30, 2008. This means that the financial statements presented are in accordance with general accepted accounting principles (GAAP), and properly stated in all material respects.
• The financial statements for the year ended June 30, 2008, reflect the university’s excellent financial position.
EXTRACTS FROM MANAGEMENT’S DISCUSSION & ANAYSIS
• Discussion of Statement of Net Assets
During the fiscal year ended June 30, 2008, the university’s net assets increased by 10.8 percent from $68.7 million to$76.1 million and cash and cash equivalents increased by 93.7%, from $22.5 million to $43.6million. These increases are primarily attributed to increases in the value of our investments and capital assets, as offsets by the increases in accumulated depreciation and in our long-term debt financing of these capital assets (projects).
Current assets increased 73 percent during the year. The ending balance of $54.2 million consists primarily of cash/cash equivalents ($43.6 million) and receivables ($7.5 million). Cash/cash equivalents increased 93.7 percent. The university capitalizes on earnings by investing funds in the State of New Mexico Local Government Investment Pool ($42.1 million) and with the State Investment Council ($5.2 million). The total cost of capital assets is comprised of land, buildings and improvements ($93.2 million); and library books, equipment, vehicles, and furniture ($28.4 million). All capital assets, except land and construction-in-progress, are being depreciated, meaning a percentage of the assets’ cost is being charged to operating expenses each year. Consequently, capital assets are shown as a net amount of $47.7 million ($121.6 million cost less $73.9 million accumulated depreciation).
Total liabilities of $31 million constitute 28.9 percent of total assets and consist primarily of payables/accrued liabilities ($6.2 million), bonds/notes payable ($21.6 million), and deferred revenue ($2.8 million). The university increase in noncurrent liabilities is a result of a bond issuance during the fiscal year ($19,740,852). Deferred revenue represents amounts prepaid by students, auxiliary enterprises customers, grantors and contractors (or amounts received before the university met all of its requirements for income recognition).
Total net assets increased by $7.4 million, or 10.8 percent, during the year. (Over a two-year period, net assets increased $12.3 million or 18.4 percent). The ending balance of $76.1 million is derived by deducting total liabilities from total assets and shows the composition of the university’s equity. Restricted for nonexpendable ($6.0 million) represents the university’s endowment corpus, whereas restricted for expendable ($17.6 million) represents resources that must be spent according to the stipulations of external entities. Unrestricted net assets ($6.6 million) are available to the university for any lawful purpose under the full discretion of management.
The Foundation’s net assets increased $0.01 million, from $4.4 million to $4.5 million, due to the fact that expenditures were kept below the revenue level.
• Discussion of Statement of Revenues, Expenses and Changes in Net Assets
This statement shows the components that increased, in the aggregate. The university’s net assets increased by $7.4 million during the year. Operating expenses ($60.7 million) are subtracted from operating revenues ($26.4 million), resulting in an “operating loss” ($34.3 million). State general fund appropriations ($35.5 million), are not included as operating revenue; however, it is reflected as non operating revenue, because they are provided to the university without the state receiving commensurate goods and services in exchange. Since state general fund appropriations are essential for the university to carry out its instructional and public service mission, the reader should focus on the $1.9 million, “Income before other revenue, expenses, gains and losses,” achieved during the year. Added to this income is $5.7 million in capital grants and gifts (federal and state funds designated for construction projects), in order to arrive at an increase in net assets of $7.4 million. State general fund appropriations increased by $2.9 million (9.1%), $2.9 million is due to the fact that the university’s funding base (work load) for Instruction & General was increased by $.019 million for FY08, because the university’s student credit hours had exceeded the required 3% threshold. An additional $2.0 million is due to a one-time funding of Building Replacement & Renewals.
• Discussion of Statement of Cash Flows
This statement shows the sources and uses of cash and cash equivalents in four standard categories. The university achieved a $21.1 million net increase during the year, resulting in an ending cash balance of $43.6 million. As a result of tight expenditure controls, collection of receivables, timely drawing of grant funds and other prudent cash management measures coupled with proceeds of a bond issue ($19.7 million), the university was able to gradually increase the average amount of cash in the bank throughout the year, thus significantly improving the university’s access to working capital and investment earnings. The Statement of Cash Flows, in conjunction with the Statement of Net Assets, indicates that the university is well able to meet its obligations and finance its operations.