Finance and Administration Committee - Agenda
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2021 - Finance and Administration Committee - Agenda THE UNIVERSITY OF TENNESSEE BOARD OF TRUSTEES FINANCE AND ADMINISTRATION COMMITTEE 1:30 p.m. (EST)/12:30 p.m. (CST) Thursday, February 25, 2021 Virtual/Knoxville AGENDA I. Call to Order and Opening Remarks II. Roll Call III. Requests to Address the Board (if appropriate for this committee) IV. Annual Financial Report FY 2020—Information..........................................................................Tab 1 V. CFO’s Report on Financial Performance—Information..............................................................Tab 2 VI. Revised FY 2020-21 Operating Budget—Roll Call Vote/Action ...............................................Tab 3 VII. Annual Report on Finances of the Intercollegiate Athletics Programs—Information............Tab 4 VIII. FY 2021-22 Tuition and Fees for UT Health Science Center—Roll Call Vote/Action ............Tab 5 IX. Proposed Paid Parental Leave Policy —Roll Call Vote/Action.................................................Tab 6 X. Enterprise Resource Planning (ERP) Update —Information .....................................................Tab 7 XI. Consent Agenda —Roll Call Vote/Action....................................................................................Tab 8 Action Items A. Minutes of the Last Meeting...................................................................................................Tab 8.1 B. Naming of JTV Center for Applied Business Analytics, UTK...........................................Tab 8.2 C. Renaming of Orange Hall in Honor of Rita Sanders Geier, UTK .....................................Tab 8.3 D. Renaming of White Hall in Honor of Theotis Robinson, Jr., UTK....................................Tab 8.4 E. Long-term Ground Lease Amendment for a Private Commercial-Retail Development of Campus, UTHSC ........................................................................................Tab 8.5 F. Transfer of Property at Research and Education Center – Blount Unit, UTIA...............Tab 8.6 1 2021 - Finance and Administration Committee - Agenda Information Items G. Disclosure of Additional Revenue/Institutionally-funded Capital Projects for FY 2021-22 and FY 2020-21 ...............................................................................................Tab 8.7 H. Report on Endowment Investment Performance................................................................Tab 8.8 I. Composite Financial Index Report for FY 2019-20..............................................................Tab 8.9 J. Fiscal Year 2020 Report of Year-End Fund Balances .......................................................Tab 8.10 XII. Other Business [Note: Under the Bylaws of the Board, items not appearing on the agenda may be considered only upon an affirmative vote representing a majority of the total voting membership of the Committee. Other business necessary to come before the Committee at this meeting should be brought to the attention of the Committee Chair or Board Secretary before the meeting.] XIII. Adjournment 2 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 AGENDA ITEM SUMMARY Meeting Date: February 25, 2021 Committee: Finance and Administration Item: Annual Financial Report FY 2020 Type: Information Presenter: David L. Miller, Senior Vice President and Chief Financial Officer The Annual Financial Report, FY 2020 (“Report”) provides a comprehensive entity-wide perspective of the University’s assets, liabilities, net position, revenues, expenses, changes in net position and cash flows. The financial statements in the Report have been prepared in accordance with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board. The management of the University of Tennessee is responsible for the integrity and objectivity of these financial statements. The financial statements have been audited by the State of Tennessee, Comptroller of the Treasury, Division of State Audit. The auditor’s opinion is based on audit procedures described in their letter on page 3 of the Report, which includes understanding University systems, procedures, and internal controls and performing tests and other auditing procedures sufficient to provide reasonable assurance that the financial statements are not materially misleading nor do they contain material errors. The full Report is available at: Annual Financial Report 2020 3 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 2020 FINANCIAL REPORT The University of Tennessee Comparative Financial Statement Summaries Fiscal Years Ended June 30, 2020 and 2019 4 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 FY2020 FY 2019 Total Revenues $2.596B Total Revenues $2.522B Investment Tuition Tuition Income $66.5M Auxiliaries and Fees Investment and Fees Auxiliaries $244.1M Fed Appr $17.2M $515.8M Income $532.9M $252.2M $117.3M Gifts $37.6M Fed Appr $15.9M Sales & Other Gifts $35.7M Grants and Services Grants and Other $392.9M $56.0M Sales & Contracts Contracts $375.0M Op Rev $20.1M Services $65.2M $761.8M $734.9M Op Rev $22.9M Non-Op Non-Op State Appr Rev State Appr $195.5M Rev $664.7M $644.2M $118.0M Revenues Increased $74M • Non -operating revenue (capital funding, gifts) increased $77.5M • Grants and Contracts increased $26.9 M ($21M Cares Relief) • State appropriations & Student Fees increased $37.6M (3%) • Investment income decreased $50.8M • Sales & Services (Clinics, Farms, UTC & Martin Athletics) decreased by $9.2M • Auxiliaries decreased $8.1M. 5 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 FY 2020 FY 2019 Total Expenses $2.391B Total Expenses $2.354B Scholarships Operating Scholarships Benefits Expenses $84.4M Benefits Operating $67.0M $408.7M $533.9M $409.6M Expenses $563.3M Other Depreciation Other Depreciation $280.1M $144.4M $242.2M $133.0M Salaries Salaries $1.169B $1.139B Non-Op Exp Non-Op Exp $51.3M $42.2M • Expenses increased by $37M (1.5%) • Operating Expenses decreased $29.4M (5.2%) • Salaries increased $30M (2.6%) • Scholarships increased $17.4M (26%) • Depreciation increased by $11.4M • Non -operating (interest on capital assets, disposal of assets) increased by $9.1M 6 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 FY2020 FY 2019 Total Assets $5.663B Total Assets $5.546B Prepaids $2.8M Prepaids $5M Inventories $7.1M Inventories $7M Cash Investments Investments Cash $1.080B $1.352B Net $1.037B Net $1.292B Receivables Pension Receivables Pension $210.3M Asset & $199M Asset & Deferred Deferred Outflows Outflows Capital $145.0M Capital $170M Assets Assets $2.909B $2.793B • Assets Increased by $117M • Capital assets increased by $116M. • Cash, investments & receivables collectively increased by $28M. • Deferred outflows decreased by $25M related to pensions. 7 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 FY 2020 FY 2019 Total Liabilities $2.190B Total Liabilities $2.278B Accounts Accounts Payable & Due to Grantors $13.9M Net Pension Payable & Due to Grantors $20.4M Obligation & Accrued Unearned Net Pension Accrued Unearned Deferred Inflows Liabilities Revenue OPEB Obligation Liabilities Revenue $315.6M $180.2M $63.5M $155.5M & Deferred Inflows $176.0M $78.5M OPEB $261.8M $237.5M Annuities & Deposits $28.1M Other Annuities & Deposits Payables Other $28.9M $560.2M Due to Payables Bonds Component Units Bonds $673.4M Due to Payable $271.4M Payable Component Units $1.070B $1.088B $303.3M Compensated Absences Compensated $91.3M Absences $83.3 M • Liabilities Decreased by $88M • Post Retirement Benefits decreased $82M • Due to Component Units (Foundations) decreased by $31.9M • Bonds payable decreased by $18M • Net pensions and Deferred inflows increased by $53.8M • Compensated absences increased by $8M 8 2021 - Finance and Administration Committee - Annual Financial Report FY 2020 - Information 1 Fiscal Year 2020 - The Bottom Line Revenue $2.596B Less Expenses $2.391B Increase in Net Position $ 205M Assets increased $ 117M Liabilities decreased $ 88M Increase in Net Position $ 205M 9 2021 - Finance and Administration Committee - CFO's Report on Financial Performance - Information 2 AGENDA ITEM SUMMARY Meeting Date: February 25, 2021 Committee: Finance and Administration Item: CFO’s Report on Financial Performance Type: Information Presenter: David L. Miller, Senior Vice President and Chief Financial Officer The attached materials are presented to contribute to the body of financial reports periodically provided to the Board of Trustees. This set of tables provides details summarizing the first two quarters of fiscal year 2020-21 compared to the same time last year. The table below summarizes Unrestricted E&G revenue and auxiliary revenue. The tables on the following pages provide revenue and expense data by institution and for the System as a whole. UT System Quarterly Financial Summary Second Quarter of FY 2020-21 (July 1 through December 31) Current Operating Funds (Unrestricted & Restricted) FY 2020-21 % of same time % of current thru Dec. 31 last year year budget REVENUES Unrestricted E&G Funds $ 1,143,957,864 100.5% 73.7% Unrestricted Auxiliary Funds 132,031,418 72.8% 63.3% Restricted Funds (E&G/Aux.) 355,179,028 106.0% 48.2% TOTAL $ 1,631,168,310 98.5% 65.3% EXPENDITURES Unrestricted E&G Funds $ 717,020,372 96.4% 43.5% Unrestricted Auxiliary Funds 121,553,895