The University of Michigan Fiscal Year 2004 Financial Statements
Total Page:16
File Type:pdf, Size:1020Kb
Financial Report university of michiganYear Ended June 30, 2004 table of University of Michigan contents Financial Report Letter from the President 3 Report from the Chief Financial Officer 5 Report from the Vice President for Development 11 The Michigan Difference Campaign 12 Highlights of the Year 16 Projects in Planning, in Progress, and Completed 34 Report of Independent Auditors 37 Management’s Discussion and Analysis 38 Financial Statements 56 Supplementary Information to Financial Statements 77 1 Officers and Staff As of June 30, 2004 Regents of the University of Michigan Allen Lichter, Medical School David A. Brandon, Ann Arbor Terrence McDonald, College of Literature, Science, and the Arts Laurence B. Deitch, Bingham Farms Peter Polverini, School of Dentistry Olivia P. Maynard, Goodrich Bryan Rogers, School of Art and Design Rebecca McGowan, Ann Arbor Beverly Ulrich, Division of Kinesiology Andrea Fischer Newman, Ann Arbor Karen K. Wixson, School of Education Andrew C. Richner, Grosse Pointe Park Karen L. Wolff, School of Music S. Martin Taylor, Grosse Pointe Farms Katherine E. White, Ann Arbor Business and Financial Staff Mary Sue Coleman, ex officio Henry D. Baier, Associate Vice President for Facilities and Operations Executive Officers Laurita E. Thomas, Associate Vice President for Human Mary Sue Coleman, President Resources and Affirmative Action Paul N. Courant, Provost and Executive Vice President for L. Erik Lundberg, Chief Investment Officer Academic Affairs Fred J. White Jr., C.P.A., Interim Executive Director of E. Royster Harper, Vice President for Student Affairs University Audits Robert Kelch, Executive Vice President for Medical Affairs Margaret E. Norgren, Associate Vice President for Finance Marvin Krislov, Vice President and General Counsel Laura M. Patterson, Associate Vice President for Michigan Daniel Little, Chancellor, University of Michigan-Dearborn Administrative Information Systems Jerry A. May, Vice President for Development Cheryl L. Soper, C.P.A., Controller and Director, Financial Juan E. Mestas, Chancellor, University of Michigan-Flint Operations Lisa M. Rudgers, Vice President for Communications Gregory J. Tewksbury, Treasurer Timothy P. Slottow, Executive Vice President and Chief Financial Officer Financial Staff Lisa A. Tedesco, Vice President and Secretary of the Phil M. Abruzzi, Director of Purchasing, Stores and University Auxiliary Services Fawwaz T. Ulaby, Vice President for Research Robert L. Barbret, Associate Director of Financial Operations Cynthia H. Wilbanks, Vice President for Government for Sponsored Programs, Contract Administration and Cost Relations Reimbursement Antony E. Burger, Director of Financial Analysis Deans of the University of Michigan Frederick G. Caryl, Assistant Director of Financial Operations Paula Allen-Meares, School of Social Work for Invested, Designated, General, Plant and Auxiliary Funds Rosina Bierbaum, School of Natural Resources and Russell R. Fleming, C.P.A., Financial Manager of Environment Financial Operations for Financial Reporting Rebecca Blank, Gerald R. Ford School of Public Policy Elizabeth S. Hokada, Director of University Investments Evan Caminker, Law School Edward J. Jennings, C.P.A., Financial Manager of Financial Noreen M. Clark, School of Public Health Operations for Corporate Tax Reporting Stephen W. Director, College of Engineering Deborah S. Mero, Director of the Core Process Unit for Robert J. Dolan, School of Business Administration Financial/Physical Resources Ada Sue Hinshaw, School of Nursing Chip R. Simper, Assistant Director of Financial Operations Douglas S. Kelbaugh, A. Alfred Taubman College of for Student Loan Operations, Student Financial Operations Architecture and Urban Planning and Cashier’s Office George L. Kenyon, College of Pharmacy John S. Sullivan, Financial Manager of Financial Operations John L. King, School of Information for Investment Reconciliation Steven Kunkel, Horace H. Rackham School of Graduate Norel C. Tullier, Assistant Director of Financial Operations 2 Studies (Interim) for Payroll promise on either our academic quality or our public commitment. The great strengths of the University of Michigan letter prepare it well to enhance its position of academic leadership and to engage its public mission even from the President more profoundly over the next century. This University is characterized by world-class academic quality, depth and breadth, across a broad range of disciplines. As Business School Dean Robert Dolan described it recently, we have 19 schools and colleges at the top of their It has been an exciting year, games. I believe the University’s ability to tap the one in which we laid impor- strengths of these individual fields in a multi- tant groundwork for the disciplinary approach to scholarship is one of our future strength of the most distinctive hallmarks—we are a boundary- University of Michigan. breaking academic culture with great capacity for This past May, the University kicked off the most multi-disciplinary work. ambitious fundraising campaign in its history. The Our goal is this: We will build on this unique com- momentum has carried us to early success, allowing bination of strengths—those characteristics that add us to start the public phase halfway to our goal! up to The Michigan Difference—to ensure that the Our donors know that their support provides this University of Michigan continues to define the University with the margin of excellence so critical great public university of the world. And in so to Michigan’s future prominence and the quality of doing, we will renew our efforts to: our students’ educational experience. We hope to I sustain academic excellence raise $2.5 billion from generous alumni and friends I foster active intellectual engagement and who want to help us sustain what we are calling engagement with the world around us The Michigan Difference. We will need every bit I build collaborative and multidisciplinary learning of that momentum to raise the next billion dollars. environments I invite you to read more about the campaign and I create greater access to Michigan’s academic its success to date on pages 11-17. quality The “Difference” is that distinctive collection of qualities long associated with the University—the State Funding Challenge academic excellence, the research enterprise at the Our focus on the importance of philanthropy to forefront of scientific discovery, the loyal alumni sustain Michigan’s excellence comes at an especially spirit, the historic and iconic campus architecture. critical time. For me, possibly the most important definition of Like other states across the nation, the economic The Michigan Difference is the understanding that downturn of the last three years has created a seri- this University is a unique American treasure—it is ous budget challenge for the State of Michigan. The both a great university and the very best of public result has been a significant decrease in appropria- universities. Each of the University’s stakeholders tions to the state’s 15 public colleges and universities. plays an important role in its future strength—our For fiscal years 2004 and 2005 alone, University alumni, students, faculty, staff, friends and every citi- general support from the State of Michigan has zen of the State of Michigan. We will never com- been reduced by 12 percent, or $49 million. 3 The continuing uncertainty of the state budget work. We want to make our collaborations even situation has compounded a long-term erosion of more extensive, enabling the University to both state support—a trend I have called an unarticulated highlight its strengths and build on its potential. policy. The compact of the State to fund higher In addition to the LSI, we are planning and design- education has become strained over the past thirty ing a significant new set of facilities that speak to years. This translates to the following: in the 1970s, our future direction and aspirations. This year we the State provided about two-thirds of the cost of a broke ground on several buildings including a state- University of Michigan education; by 2004, State of-the-art Cardiovascular Center, new and renovat- support had dwindled to less than one-third. ed space for the School of Public Health, and the I believe funding for public higher education is one University’s multi-disciplinary Depression Center. of the country’s most important public policy issues, And in the next year we anticipate moving ahead especially as demand for a high-quality education with a new facility for the Gerald R. Ford School increases and our need to provide access to that of Public Policy, the Walgreen Drama Center and education—regardless of economic means—remains Arthur Miller Theatre to be located on North central to our mission as a public institution. Our Campus, and a major addition to the University’s public universities should be no less great because Museum of Art. Also, we will make important deci- of the public commitment. Our ability to provide sions about improving the quality of the residential access to that education for thousands of students experience for our students, including a recommen- each year is more important than ever before. dation for a new residence hall, as part of our important Residential Life Initiative now underway. Throughout these challenging economic times, we have remained steadfast in our commitment to the These new facilities will help us animate our aspira- University’s core academic strength. Under the tions for the