Louisiana State University System a Component Unit of the State of Louisiana
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LOUISIANA STATE UNIVERSITY SYSTEM A COMPONENT UNIT OF THE STATE OF LOUISIANA FINANCIAL STATEMENT AUDIT FOR THE YEAR ENDED JUNE 30, 2009 ISSUED APRIL 7, 2010 LEGISLATIVE AUDITOR 1600 NORTH THIRD STREET POST OFFICE BOX 94397 BATON ROUGE, LOUISIANA 70804-9397 LEGISLATIVE AUDIT ADVISORY COUNCIL SENATOR EDWIN R. MURRAY, CHAIRMAN REPRESENTATIVE NOBLE E. ELLINGTON, VICE CHAIRMAN SENATOR NICHOLAS “NICK” GAUTREAUX SENATOR WILLIE L. MOUNT SENATOR BEN W. NEVERS, SR. SENATOR JOHN R. SMITH REPRESENTATIVE CAMERON HENRY REPRESENTATIVE CHARLES E. “CHUCK” KLECKLEY REPRESENTATIVE ANTHONY V. LIGI, JR. REPRESENTATIVE CEDRIC RICHMOND LEGISLATIVE AUDITOR - ELECT DARYL G. PURPERA, CPA DIRECTOR OF FINANCIAL AUDIT PAUL E. PENDAS, CPA Under the provisions of state law, this report is a public document. A copy of this report has been submitted to the Governor, to the Attorney General, and to other public officials as required by state law. A copy of this report has been made available for public inspection at the Baton Rouge and New Orleans offices of the Legislative Auditor. This document is produced by the Legislative Auditor, State of Louisiana, Post Office Box 94397, Baton Rouge, Louisiana 70804-9397 in accordance with Louisiana Revised Statute 24:513. Five copies of this public document were produced at an approximate cost of $38.00. This material was produced in accordance with the standards for state agencies established pursuant to R.S. 43:31. This report is available on the Legislative Auditor’s Web site at www.lla.la.gov. When contacting the office, you may refer to Agency ID No. 3474 or Report ID No. 80090081 for additional information. In compliance with the Americans With Disabilities Act, if you need special assistance relative to this document, or any documents of the Legislative Auditor, please contact Wayne “Skip” Irwin, Administration Manager, at 225-339-3800. _________________________________________________ TABLE OF CONTENTS Page Independent Auditor's Report on the Financial Statements............................................................ 3 Management’s Discussion and Analysis ........................................................................................ 5 Statement Basic Financial Statements: Louisiana State University System Statement of Net Assets ...................................................................................... A ..................15 Component Units Statement of Financial Position .......................................................................... B ..................18 Louisiana State University System Statement of Revenues, Expenses, and Changes in Net Assets.......................... C ..................23 Component Units Statement of Activities........................................................................................ D ..................26 Louisiana State University System Statement of Cash Flows..................................................................................... E ..................31 Notes to the Financial Statements ...............................................................................................33 Schedule Required Supplementary Information Schedule - Schedule of Funding Progress for the Other Postemployment Benefits Plans ...................................................................1...................93 Supplemental Information Schedules - Louisiana State University System: Combining Schedule of Net Assets, by University..............................................2...................96 Combining Schedule of Revenues, Expenses, and Changes in Net Assets, by University ..............................................................................3.................100 Combining Schedule of Cash Flows, by University............................................4.................104 - 1 - LOUISIANA STATE UNIVERSITY SYSTEM __________________________________ Exhibit Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Basic Financial Statements Performed in Accordance With Government Auditing Standards .......................................... A Appendix Management’s Corrective Action Plans and Responses to the Findings and Recommendations.................................................................. A - 2 - LOUISIANA LEGISLATIVE AUDITOR DARYL G. PURPERA, CPA March 24, 2010 Independent Auditor's Report on the Financial Statements LOUISIANA STATE UNIVERSITY SYSTEM STATE OF LOUISIANA Baton Rouge, Louisiana We have audited the accompanying financial statements of the business-type activities and the aggregate discretely presented component units of the Louisiana State University (LSU) System, a component unit of the State of Louisiana, as of and for the year ended June 30, 2009, which collectively comprise the System’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of management of the LSU System. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Louisiana State University School of Medicine in New Orleans Faculty Group Practice doing business as LSU Healthcare Network and Subsidiaries, the Eunice Student Housing Foundation, Inc., and the Health Care Services Foundation and its subsidiary, which are nonprofit corporations included as blended component units in the basic financial statements representing approximately 2.0% of total assets, 3.1% of total liabilities, 2.1% of total revenues, and 2.0% of total expenses of the LSU System. We also did not audit the financial statements of the LSU Foundation, the Tiger Athletic Foundation, the Pennington Medical Foundation, the Foundation for the LSU Health Sciences Center, and the University of New Orleans Research and Technology Foundation, which are all of the discretely presented component units presented in the basic financial statements of the LSU System. The financial statements of the blended and discretely presented component units were audited by other auditors whose reports thereon have been furnished to us, and our opinions, insofar as they relate to the amounts included for these component units, are based on the reports of the other auditors. We conducted our audit 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The financial statements of the LSU Foundation and the Pennington Medical Foundation were not audited in accordance with Government Auditing Standards. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the reports of the other auditors provide a reasonable basis for our opinions. - 3 - LOUISIANA STATE UNIVERSITY SYSTEM __________________________________ In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to previously present fairly, in all material respects, the respective financial position of the business-type activities and the aggregate discretely presented component units of the LSU System as of June 30, 2009, and the respective changes in its financial position and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in note 1-Q to the financial statements, the LSU System implemented Governmental Accounting Standards Board (GASB) Statement No. 52, Land and Other Real Estate Held as Investments by Endowments, for the year ended June 30, 2009. In addition, as discussed in note 1-Q to the financial statements, the LSU System changed its classification of Pell grant revenues from operating revenues to nonoperating revenues for the year ended June 30, 2009, as a result of recent actions of the GASB. In accordance with Government Auditing Standards, we have also issued our report dated March 24, 2010, on our consideration of LSU System’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Management’s discussion and analysis on pages 5 through 13 and the Schedule of Funding Progress for the Other Postemployment Benefits Plans on page 93 are not required parts of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding