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The George Washington University The George Washington University Consolidated Financial Statements and Schedule of Expenditures of Federal Awards and Reports in Accordance with OMB Circular A-133 For the year ended June 30, 2015 EIN 530196584 The George Washington University Index June 30, 2015 Page(s) Independent Auditor's Report ................................................................................................................. 1-2 Consolidated Financial Statements for the years ended June 30, 2015 and 2014 ................................... 3-6 Notes to the Consolidated Financial Statements for the years ended June 30, 2015 and 2014 ............ 7-31 Schedule of Expenditures of Federal Awards for the year ended June 30, 2015 ................................ 32-58 Notes to Schedule of Expenditures of Federal Awards for the year ended June 30, 2015 ................. 59-60 Independent Auditor's 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 ..................................................... 61-62 Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 ........................................................... 63-64 Schedule of Findings and Questioned Costs ....................................................................................... 65-66 Summary of Status of Prior Year Audit Findings and Questioned Costs ................................................ 67 Independent Auditor’s Report To the President and Board of Trustees of The George Washington University: Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of The George Washington University and its subsidiaries (the University), which comprise the consolidated statements of financial position as of June 30, 2015 and 2014, and the related consolidated statements of unrestricted activities, consolidated statements of activities, and consolidated statements of cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, based on our audits, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the University as of June 30, 2015 and 2014, and the changes in its net assets and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. PricewaterhouseCoopers LLP, 1800 Tysons Boulevard, McLean, VA 22102-4261 T: (703) 918-3000, F: (703) 918 3100, www.pwc.com/us 1 Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards for the year ended June 30, 2015 is presented for purposes of additional analysis as required by Office of Management and Budget Circular A- 133, Audits of States, Local Governments, and Non-Profit Organizations and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 15, 2015 on our consideration of the University’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters for the year ended June 30, 2015. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University's internal control over financial reporting and compliance. September 15, 2015 2 Consolidated Statements of Financial Position As of June 30, 2015 and 2014 (in thousands) 2015 2014 ASSETS Cash and cash equivalents$ 82,382 $ 40,578 Accounts receivable, net 59,307 56,030 Pledges receivable, net 94,039 130,057 Investments 2,043,240 1,983,120 Loans and notes receivable, net 29,983 28,863 Physical properties, net: Land and buildings 1,608,416 1,434,523 Furniture and equipment 99,395 83,122 Other assets 25,006 26,239 Total assets $ 4,041,768 $ 3,782,532 LIABILITIES Accounts payable and accrued expenses$ 213,622 $ 215,788 Deferred revenue: Tuition and other deposits 36,339 33,087 Grants and contracts payments 11,680 13,557 Bonds and notes payable 1,549,844 1,361,030 Funds advanced for student loans 29,943 29,311 Total liabilities 1,841,428 1,652,773 NET ASSETS Unrestricted net assets (deficit): Unrestricted operating (28,444) (26,266) Unrestricted capital and investing 1,499,316 1,493,452 Total unrestricted 1,470,872 1,467,186 Temporarily restricted 461,842 420,552 Permanently restricted 267,626 242,021 Total net assets 2,200,340 2,129,759 Total liabilities and net assets $ 4,041,768 $ 3,782,532 The accompanying notes are an integral part of these consolidated financial statements. 3 Consolidated Statements of Unrestricted Activities Years Ended June 30, 2015 and 2014 (in thousands) 2015 2014 Capital and Total Capital and Total Operating Investing Unrestricted Operating Investing Unrestricted REVENUE Student tuition and fees$ 890,775 $ - $ 890,775 $ 847,060 $ - $ 847,060 Less: University funded scholarships (251,777) - (251,777) (238,932) - (238,932) Net student tuition and fees 638,998 - 638,998 608,128 - 608,128 Grants and contracts Program funds 164,195 - 164,195 171,784 4,724 176,508 Indirect cost recoveries 25,286 - 25,286 22,768 - 22,768 Investment income, net 363 3,506 3,869 58 80,989 81,047 Investment real property rents and appreciation - 101,302 101,302 - 151,003 151,003 Change in value of split-interest agreements - 13 13 - 31 31 Auxiliary enterprises 98,652 - 98,652 98,388 - 98,388 Contributions, net 15,892 5,771 21,663 17,180 4,447 21,627 Contributions - Corcoran - 60,518 60,518 - - - Net assets released from restrictions 14,171 20,153 34,324 6,408 26,402 32,810 Medical education agreements 59,121 2,837 61,958 58,236 3,035 61,271 Other income 24,991 2,663 27,654 24,840 2,971 27,811 Total revenue 1,041,669 196,763 1,238,432 1,007,790
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