Annual Financial Report 2011-2012
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Annual Financial Report 2011-2012 nmsu.edu Table of Contents Financial Statements and Schedules June 30, 2012 and 2011 Official Roster........................................................................................................................................................................ 1 President’s Letter .................................................................................................................................................................. 2 Report of Independent Auditors ............................................................................................................................................ 3 Financial Statements Management’s Discussion and Analysis ............................................................................................................................... 6 Exhibit A: Statement of Net Assets ..................................................................................................................................... 17 Exhibit B: Statement of Revenues, Expenses, and Changes in Net Assets ........................................................................ 19 Exhibit C: Statement of Cash Flows .................................................................................................................................... 21 Notes to the Financial Statements ...................................................................................................................................... 23 Supplemental Schedules Schedule 1 - Combining Statement of Net Assets for the Years Ended June 30, 2012 and 2011 for the Primary Institution ....................................................................................................................... 55 Schedule 2 - Combining Statement of Revenues, Expenses, and Changes in Net Assets for the Years Ended June 30, 2012 and 2011 for the Primary Institution .......................................................... 56 Schedule 3 - Budget Comparison Schedules as of June 30, 2012 ............................................................................. 57 Schedule 4 - Bank Balances, Pledged Collateral Requirements, and Pledged Collateral by Financial Institution ................................................................................................................................ 61 Schedule 5 - Schedule of Funding Progress and Employee Contributions ................................................................. 63 Schedule 6 - Joint Powers of Agreement and Memorandums of Understanding ........................................................ 64 Single Audit Information Schedule 7 - Schedule of Expenditures of Federal Awards ........................................................................................ 66 Report of Independent Auditors 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 ............................................................ 80 Report of Independent Auditors 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 ............................................................................................... 82 Summary Schedule of Prior Audit Findings ......................................................................................................................... 85 Schedule of Findings and Questioned Costs ...................................................................................................................... 86 Exit Conference ............................................................................................................................................................... 89 Board of Regents Mike Cheney Chair of Board Isaac Pino Christopher Dulany Vice Chair Secretary-Treasurer Javier Gonzales Kari Mitchell Member Member Ex-Officio Members Susana Martinez Hanna Skandera Governor Secretary of Education Timothy Ketelaar Breeana Sylvas Faculty Representative President, ASNMSU Executive Officers Manuel T. Pacheco Interim President Wendy K. Wilkins Angela Throneberry Executive Vice President Senior Vice President for and Provost Administration and Finance Dennis Prescott Benjamin E. Woods Vice President for University Senior Vice President for External Advancement Relations and Chief of Staff Administration and Finance Officials D’Anne Stuart Lorin Gobble Associate Vice President Assistant Vice President/ for Administration and Finance Controller Leland Kiehne Anna Price Director of University Accounts Chief Budget Officer Receivable Norma Noel Jean Carsey Associate Controller Associate Controller Meghann Hutchison Dorothy Anderson Director of Accounting and Interim Assistant Vice President for Financial Reporting Human Resource Services 1 October 22, 2012 Members of the Board of Regents New Mexico State University We are pleased to submit the annual financial report of New Mexico State University (the University) for the fiscal year ended June 30, 2012. The accompanying financial statements of the University include a separate column entitled Discrete Component Unit representing the New Mexico State University Foundation, Inc. Moss Adams LLP, independent auditors, have examined the financial statements and their unqualified opinion is displayed on pages 3 through 5 of the report. The University continued to manage through reductions in state appropriations and other budgetary impacts related to the economic instability during fiscal year ended June 30, 2012. As we have relied on during the past few years, the University benefitted greatly from the underlying soundness of our financial position. Assets in total increased by 1 percent, and total net assets increased by $6.9 million, despite a decline in state appropriations of 7 percent and operating revenues of 5 percent. The impact of the decline in revenues is offset by a reduction in operating expenses of 3 percent over the same period. We have recently completed a number of construction projects including the second phase of the Chamisa Village student apartment complex, the infrastructure portion of the Satellite Chilled Water Plant, the Dona Ana Community College education center in the Village of Hatch, New Mexico, and further expansion of the East Mesa Campus. With an expected capital outlay of at least $95 million by early fiscal year 2015, we look forward to completion of the Center for the Arts and the Satellite Chilled Water Plant followed by completion of the Institute for Public Policy. These facilities demonstrate our strong commitment to delivering the highest quality educational experience in the furtherance of our mission. The revenue outlook at the state level is improving and state forecasts reflect increased total revenue collections providing new funds available for the upcoming year. The University benefited from the state’s economic growth and a new higher education funding formula through increased general fund appropriations for fiscal year 2013. The continued commitment of state level support for higher education and our conservative fiscal management, will allow us to maintain our focus on strategic goals supporting our core mission of instruction, research, extension and public service. With the combined expertise, dedication and support of our Regents, sponsors, friends, faculty and staff, even amid uncertain macroeconomic conditions at the federal, state and local level, we can continue to make a positive difference in higher education and beyond. Sincerely, Manuel T. Pacheco Interim President 2 REPORT OF INDEPENDENT AUDITORS The Board of Regents New Mexico State University and Mr. Hector Balderas New Mexico State Auditor We have audited the accompanying financial statements of the business‐type activities and the discretely presented component unit of New Mexico State University (the “University”) as of and for the years ended June 30, 2012 and 2011, which collectively comprise the University’s basic financial statements as listed in the table of contents. We have also audited the combining statements of net assets – primary institution as of June 30, 2012 and 2011, and the combining statements of revenues expenses and changes in net assets – primary institution for the years then ended, and the budget comparison for the year ended June 30, 2012, as listed in the table of contents. These basic financial statements are the responsibility of the University’s management. Our responsibility is to express opinions on these 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 audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting