Southern University and A&M College System
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SOUTHERN UNIVERSITY AND A&M COLLEGE SYSTEM ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2020 SOUTHERN UNIVERSITY SYSTEM J.S. CLARK ADMINISTRATION BLDG., 4TH FLOOR BATON ROUGE, LOUISIANA 70813 BOARD MEMBERS ATTY. DOMOINE D. RUTLEDGE – CHAIR REV. SAMUEL C. TOLBERT, JR. – VICE CHAIR MR. JOHN L. BARTHELEMY MRS. ARLANDA WILLIAMS ATTY. JODY AMEDEE DR. LEROY DAVIS MR. RAYMOND M. FONDEL, JR. ATTY. PATRICK D. MAGEE MR. RICHARD T. HILLIARD MR. SAM GILLIAM MRS. ANN A. SMITH DR. CURMAN L. GAINES DR. RANI G. WHITFIELD ATTY. EDWIN SHORTY DR. LEON R. TARVER, II MR. BAKARI GARVEY President-Chancellor DR. RAY BELTON TABLE OF CONTENTS Page Independent Auditor’s Report ......................................................................................................... 3 Management’s Discussion and Analysis ........................................................................................ 6 Statement Basic Financial Statements: Southern University System – Statement of Net Position .................................................................................... A ..................19 Southern University System Foundation – Statement of Financial Position ........................................................................... B ..................21 Southern University System – Statement of Revenues, Expenses, and Changes in Net Position ..................................................................................................... C ..................23 Southern University System Foundation – Statement of Activities ......................................................................................... D ..................25 Southern University System – Statement of Cash Flows ..................................................................................... E ..................26 Notes to the Financial Statements ..................................................................................................28 Schedule Required Supplementary Information: Schedule of the System’s Proportionate Share of the Net Pension Liability ........................................................................1...................76 Schedule of System’s Contributions .......................................................................2...................76 Schedule of the System’s Proportionate Share of the Total Collective OPEB Liability ................................................................3...................78 1 Southern University System Table of Contents Page Schedule Supplementary Information: Combining Schedule of Net Position, by Campus .................................................4...................80 Combining Schedule of Revenues, Expenses, and Changes in Net Position, by Campus ............................................................5...................82 Combining Schedule of Cash Flows, by Campus ..................................................6...................84 Exhibit 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 ................................................ A 2 LOUISIANA LEGISLATIVE AUDITOR March 31, 2021 Independent Auditor’s Report SOUTHERN UNIVERSITY SYSTEM STATE OF LOUISIANA Baton Rouge, Louisiana Report on the Financial Statements We have audited the accompanying financial statements of the business-type activities and the discretely presented component unit of the Southern University System (System), a component unit of the state of Louisiana, as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the System’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Southern University System Foundation, which represents the only discretely presented component unit of the System. Those financial statements were audited by another auditor, whose report has been furnished to us, and our opinions, insofar as they relate to the amounts included for the Southern University System Foundation, are based solely on the report of the other auditor. We conducted our audit in accordance with the 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 financial statements are free from material misstatement. The financial statements of the Southern University System Foundation, which were audited by another auditor, were audited in accordance with auditing standards generally accepted in the United States of America but not audited in accordance with Government Auditing Standards. 1600 NORTH THIRD STREET • POST OFFICE BOX 94397 • BATON ROUGE, LOUISIANA 70804-9397 WWW.LLA.LA.GOV • PHONE: 225-339-3800 • FAX: 225-339-3870 Southern University System Independent Auditor’s Report An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the 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 financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, based on our audit and the report of another auditor, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the discretely presented component unit of the System as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As disclosed in note 9 to the financial statements, the net pension liability for the System was $210,367,714 at June 30, 2020, as determined by the Louisiana State Employees’ Retirement System (LASERS) and Teachers’ Retirement System of Louisiana (TRSL). The related actuarial valuations were performed by LASERS’s and TRSL’s actuaries using various assumptions. Because actual experience may differ from the assumptions used, there is a risk that this amount at June 30, 2020, could be under or overstated. Our opinion is not modified with respect to this matter. As discussed in Note 18 of the financial statements, the 2019 financial statements have been restated to correct a misstatement. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that Management’s Discussion and Analysis on pages 6 through 18, the Schedule of the System’s Proportionate Share of the Net Pension Liability on page 76, the Schedule of System’s Contributions on page 76, and the Schedule of the System’s Proportionate Share of the Total Collective OPEB Liability on page 78 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with 4 Southern University System Independent Auditor’s Report management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.