Budget and Finance
EXTRACTS FROM MANAGEMENT’S DISCUSSION & ANAYSIS
• Discussion of Statement of Net Assets
Current Assets decreased 21.0% during the year. The ending balance of 23.8 million consists primarily of cash/cash equivalents ($17.6 million), assets held by others ($1.4 million), receivables ($4.1 million) and other ($.64 million). All cash and cash equivalents are essential and completely designated for ongoing operations including capital projects. The University attempts to maximize interest earnings by investing funds in the State Investment Council and with the State of New Mexico Local Government Investment Pool. The University has abided by its short term and endowment investment policies, thereby, ensuring liquidity and safety. The university has implemented procedures to collect receivables in a timely manner and is well able to meet all its current financial obligations.
The total cost of Capital assets is comprised of land, buildings and improvements, library books. Equipment, vehicles, furniture and patents of $173.5 less accumulated depreciation of $94.5. 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 $79.0 million ($173.5 million cost less $94.5 million accumulated depreciation).
Total liabilities of $41.3 million constitute 38% of total assets and consist primarily of payables/accrued liabilities and accrued compensated absences ($6.2 million), bonds/notes payable ($31.9 million), accrued interest payable of $.02million and deferred revenue ($2.9 million). 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). These amounts will be recognized as revenue in future period after all conditions have been satisfied.
Total net assets decreased by 4.7 million, or 7.0%, during the year. The ending balance of $67.9 million is derived by deduction total liabilities from total assets and shows the composition of the university’s equity. Invested in Capital Assets net of debt are (47.1 million). Restricted for nonexpendable ($6.7 million) represents the university’s endowment corpus, whereas restricted for expendable ($13.1 million) represents resources that must be spent according to the stipulations of external entities. Unrestricted net assets ($0.9 million) are available to the university for any lawful purpose under the full discretion of management.
• 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 decreased by $4.7 million during the year. Operation expenses ($67.2 million) are subtracted from operation revenues ($32.9 million), resulting in an “operating loss” (34.2 million). State general fund appropriations ($27.6 million), are not included as operating revenue; however, it is reflected as non operation revenue, because they are provided to the university without the state receiving commensurate goods and services in exchange. State general funds appropriations are essential for the university to carry out it instructional and public service mission. “Income/ (loss) before other revenue, expenses, gains and losses” was ($8.8 million). Added to this loss is $1.6 million of interest of indebtedness offset by $2.8 million in capital appropriations revenue (federal and state funds designated for construction project.)
State general fund appropriations decreased by $0.76 million (.027%). The state appropriation for general funds for year ended June 30, 2012 was $27.6 million as compared to state appropriation for year ended June 30, 2011 at $28.3 million.
• Discussion of Statement of Cash Flows
This statement shows the sources and uses of cash and cash equivalents in four standard categories. The university had a $4.7 million net decrease during the year, resulting in an ending cash balance of $17.6 million.