ANNUAL FINANCIAL REPORT for the Fiscal Year Ended August 31, 2018

ANNUAL FINANCIAL REPORT for the fiscal year ended August 31, 2018 Texas State University, to the extent not in conflict with federal or state law, prohibits discrimination or harassment on the basis of race, color, national origin, age, sex, religion, disability, veterans’ status, sexual orientation, gender identity or expression. Annual Financial Report for the fiscal year ended August 31, 2018 Annual Financial Report for the fiscal year ended August 31, 2018 for Texas State University Texas State University 1 Message from the President I am pleased to present our 2018 producing the largest number of graduates in our Annual Financial Report which history, over 8,500. Those graduates go into the world demonstrates the financial strength with the added good fortune of having been a part of a of Texas State University. university with a rising national profile. Our excellence The university achieved several in research is reflected not only in the quality and growth of our master’s and doctoral programs, but also Dr. Denise M. Trauth milestones over the past fiscal year, and we expect the momentum in our total research expenditures, which grew from from them to carry over in the coming year. These under $10 million in 2005 to more than $60 million achievements reflect an institution rich in diversity this past year. with strong academic programs, world-class research, It is not a coincidence that our research activities have and a culture of excellence. increased substantially, that philanthropic giving Our distinguished and dedicated faculty and staff make continues to be strong, that first-time enrollment Texas State one of the top public universities in Texas, continues to climb, that we are adding degree programs and our 38,600 primarily traditional students make us in high-demand disciplines, and that Texas State one of the largest universities in the nation. We are proud continues to be recognized for our accomplishments. of what we have to offer. Our faculty take the Rather, we are reaping what we have sown through a responsibility of nurturing individuals and cultivating very deliberate planning process and a lot of hard work character seriously. We value inclusion, ethical behavior, from every corner of the University. honesty, integrity, diligence, courage, compassion, I am proud of our world-class academic community, fairness, civility, and respect. Our extensive list of and I invite you to study this document and learn more distinguished alumni, such as President Lyndon B. about Texas State University, the Rising Star of Texas. Johnson, stands as testimony to the university’s proud legacy. The list of over 190,000 Texas State alumni continues to grow with each passing year. Sincerely, In fact, we attracted the largest freshman class in our Denise M. Trauth history this year, over 6,100 students, while also President 2 Texas State University Annual Financial Report for the fiscal year ended August 31, 2018 From the Vice President for Finance and Support Services Financial Strength University is a minority-majority institution and is well Texas State University continues positioned to best serve the future youth of the state of to flourish on many fronts. Texas and the nation. While the size and diversity of our Even a cursory review of this student body soars, measures of our academic strength Annual Financial Report also continue to improve with very strong retention demonstrates as much: the and graduation rates and some of the best and brightest Mr. Eric Algoe University’s Net Position continues students in the country applying to be Bobcats each year. to grow, closing at just over $1.5 The Facilities of Yesterday, Today, and Tomorrow billion for the first time in our history; the University’s From the first building at Texas State in 1899, our net investment in capital assets increased by more beloved Old Main, to the cutting-edge laboratories, than $100 million; and the University’s endowment collaboration spaces, and innovation zones that we surpassed $200 million. Financially sound as we are, are designing and building today, our facilities make a however, we understand that the true measure of a statement about who we are as a University and who we university’s strength comes from the measure of the intend to be in the future. We continue to invest heavily knowledge we create and impart, the stature of our in our classroom and research facilities. Our Science, academic programs, and our people. Texas State is Technology, and Advanced Research (STAR) Park is a strong on all of those fronts. center for fostering and commercializing innovation Growth in Diversity, Enrollment, and continues to grow as we nearly completed Research, and Quality construction on three new buildings in 2018 totaling Students want to be at Texas State. This is evidenced more than 300,000 square feet of new space and have by the impressive trend of student enrollment growth scores of other facilities projects underway. over the past several decades and our record-setting We are particularly excited about new academic programs and highly qualified freshman class in the Fall of that have recently launched or that will be launching 2018 of over 6,000 students, and our record-setting in the coming year. Those include a new bachelor of graduating class of over 8,500 students. With 38,661 science in civil engineering, a new master of science students enrolled this fall semester, we rank among in respiratory therapy, a new master of science in the largest universities in the country. engineering, new doctoral programs in anthropology We are especially proud of the fact that Texas State’s and computer science, and five new master’s degrees student body mirrors that of the state of Texas itself in in the College of Business. terms of its diversity across every conceivable measure: In short, Texas State University continues to be with an incredibly wide variety of backgrounds, they financially sound, growing in size and quality, and come from across the state, every state in the country, continues to move towards National Research University and dozens of countries around the world. Texas State recognition through careful planning and management. Texas State University 3 This page intentionally left blank. 4 Texas State University Annual Financial Report for the fiscal year ended August 31, 2018 Table of Contents University Overview 6 Organizational Data 8 Financial Statements Statement of Net Position 12 Statement of Revenues, Expenses, and Changes in Net Position 14 Matrix of Operating Expenses Reported by Function 16 Statement of Cash Flows 20 Notes to the Financial Statements Note 1: Summary of Significant Accounting Policies 24 Note 2: Capital Assets 28 Note 3: Deposits, Investments and Repurchase Agreements 32 Note 4: Long-Term Liabilities 34 Note 5: Bonded Indebtedness 35 Note 6: Leases 35 Note 7: Pension Plans 36 Note 8: Interfund Activity and Transactions 36 Note 9: Contingencies and Commitments 37 Note 10: Risk Management 38 Note 11: The Financial Reporting Entity 39 Note 12: Stewardship, Compliance, and Accountability 40 Note 13: Donor Restricted Endowments 40 Texas State University 5 About Texas State University Texas State University is an Emerging Research and Hispanic-Serving University located in the burgeoning Austin-San Antonio corridor. Serving student needs in both San Marcos and Round Rock, it is the largest university in The Texas State University System and among the largest in the state. Texas State’s more than 38,600 students choose from 97 undergraduate, 93 master’s, and 14 doctoral programs offered by 10 colleges (Applied Arts, The Emmett and Miriam McCoy College of Business Administration, Education, Fine Arts and Communication, Health Professions, Honors, Liberal Arts, Science and Engineering, The Graduate College, and the University College). With a diverse campus community, Texas State is one of the top 12 producers of Hispanic baccalaureate graduates in the nation. Research and creative activities have led to growing success in attracting external support. Texas State University is accredited by the Commission on Colleges (COC) of the Southern Association of Colleges and Schools (SACS), the regional accrediting organization for 11 states in the southeastern United States, including Texas. 97 undergraduate ✪ MORE THAN 93 master’s 38,600 th 14 doctoral programs STUDENTS 4 • • • • • FROM • • • • • across Texas and MEN’S AND WOMEN’S TEAMS around the world COMPETE AT THE 16 NCAA DIVISION I LEVEL CAMPUS RESIDENCE HALLS 23 AND APARTMENTS 6 Texas State University Annual Financial Report for the fiscal year ended August 31, 2018 Our Mission Texas State University is a doctoral-granting, student- centered institution dedicated to excellence and innovation in teaching, research, including creative expression, and service. The university strives to create new knowledge, to embrace a diversity of people and ideas, to foster cultural and economic development, and to prepare its graduates to participate fully and freely as citizens of Texas, the nation, and the world. Our Shared Values In pursuing our mission, the faculty, staff, and students of Texas State University are guided by a shared collection of values: • Teaching and learning based on research, student involvement, and the free exchange of ideas in a supportive environment; • Research and creative activities that encompass the full range of academic disciplines — research with relevance, from the sciences to the arts, from the theoretical to the applied; • The cultivation of character, integrity, honesty, civility, compassion, fairness, respect, and ethical behavior in all members of our university community; • A diversity of people and ideas, a spirit of inclusiveness, a global perspective, and a sense of community as essential conditions for campus life; • A commitment to service and leadership for the exceptional public good; • Responsible stewardship of our resources and environment; and undergraduate • Continued reflection and evaluation to ensure that our strengths as a community always benefit experience those we serve.

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