Budget and Finance
EXTRACTS FROM MANAGEMENT’S DISCUSSION & ANALYSIS
• Discussion of Statement of Net Assets
Current Assets increased 1% during the year. The ending balance of $11.9 million consists primarily of cash/cash equivalents ($7.8 million), receivables ($3.7 million) and other ($491 thousand). 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 $180 million less accumulated depreciation of $97 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 $83 million ($180 million cost less $97 million accumulated depreciation).
Total liabilities of $39.4 million constitute 37% of total assets and consist primarily of payables/accrued liabilities and accrued compensated absences ($5.6 million), bonds/notes payable ($29.8 million), accrued interest payable of ($213 thousand) and unearned revenue ($3.8 million). Unearned 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 position decreased by $.8 million or 1%, during the year. The ending balance of $67.9 million is derived by deducting total liabilities from total assets and shows the composition of the University’s equity. Invested in Capital Assets net of debt are ($53 million). Restricted for nonexpendable ($8.9 million) represents the University’s endowment corpus, whereas restricted for expendable ($5.1 million) represents resources that must be spent according to the stipulations of external entities. Unrestricted net assets ($975 thousand) 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 Position
This statement shows the components that increased, in the aggregate. The University’s net position decreased by $758 thousand during the year. Operating expenses ($63.1 million) are subtracted from operating revenues ($32.4 million), resulting in an “operating loss” ($30.7 million). State general fund appropriations ($30.1 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. State general fund appropriations are essential for the University to carry out its instructional and public service mission. “Income/ (loss) before other revenue, expenses, gains and losses” was ($1 million). Added to this income is $1.8 million of other income offset by $230 thousand in capital appropriations revenues (federal and state funds designated for construction projects).
State general fund appropriations increased by $905 thousand (3%). The state appropriation for general funds for year ended June 30, 2014 was $30.1 million as compared to state appropriation for year ended June 30, 2013 at $29.2 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 $948 thousand
net increase during the year, resulting in an ending cash balance of $7.8 million.