Annual Financial Report, 2018-2019
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University of Arkansas, Fayetteville ScholarWorks@UARK Annual Financial Report Finance and Administration 2019 Annual Financial Report, 2018-2019 University of Arkansas, Fayetteville Follow this and additional works at: https://scholarworks.uark.edu/ua-annual-financial-report Citation University of Arkansas, Fayetteville. (2019). Annual Financial Report, 2018-2019. Annual Financial Report. Retrieved from https://scholarworks.uark.edu/ua-annual-financial-report/21 This Periodical is brought to you for free and open access by the Finance and Administration at ScholarWorks@UARK. It has been accepted for inclusion in Annual Financial Report by an authorized administrator of ScholarWorks@UARK. For more information, please contact [email protected]. 2018-2019 University of Arkansas Annual Financial Report Published by Office of Financial Affairs 316 Administration Building Fayetteville, AR 72701 19-291 UNIVERSITY OF ARKANSAS 2018-2019 ANNUAL FINANCIAL REPORT 3 4 2018-2019 ANNUAL FINANCIAL REPORT TABLE OF CONTENTS The University of Arkansas Message from the Chancellor .........................................................................................................3 Progress and Major Initiatives ..........................................................................................................5 Letter of Transmittal .............................................................................................................................11 Independent Auditor’s Report .....................................................................................................12 Management’s Discussion and Analysis (unaudited) ..................................................15 Statement of Net Position ...............................................................................................................30 Statement of Revenues, Expenses, and Changes in Net Position .......................32 Statement of Cash Flows – Direct Method .........................................................................34 Discretely Presented Component Units ................................................................................37 Notes to the Financial Statements ............................................................................................44 Required Supplementary Information (unaudited) ......................................................96 Board of Trustees, University Officials ...................................................................................100 1 UNIVERSITY OF ARKANSAS 2018-2019 ANNUAL FINANCIAL REPORT MESSAGE FROM THE CHANCELLOR Thank you for your interest in the annual financial report of the University of Arkansas. As the state’s flagship university, we know how important it is to be good stewards of state resources. State resources, however, are just one component of university finances. Tuition dollars, research grants, private gift support, and various auxiliaries like housing and athletics are also critical parts of the budgetary mix. Whatever its source, it’s important that we can account for how every dollar is acquired and spent. This financial report reflects our desire to be completely open in our financial accounting. Nevertheless, it must represent the diversity and complexity of financing a major public research university. While we tried to make this report as clear and straightforward as possible, it will never be mistaken as light reading. As detailed in these pages, it should be clear that university finances are in great shape. Private giving continues to be strong. Last year, the University had another exceptional year of fundraising, exceeding our original goal of $125.6 million by nearly $40 million. The highlight of the year was a $23.7 million dollar gift from the Walton Family Charitable Support Foundation to support research and economic development of the state. This pushed us past the $1.1 billion mark for Campaign Arkansas and closer to our goal of $1.25 billion. We also had an increase of $47 million dollars in our net position this year, which some people refer to as our reserves, due to earnings on investments and the refinancing of some bonds, as well as other changes made in managing our finances. This money will be used to do much needed renovation work around campus as well as enable us to borrow a little less for planned projects like the Student Success Center and a new research building, among other things. It also bears mentioning that we are in the process of implementing Workday as our new ERP system. This system will integrate and streamline processes while creating substantial cost savings. In fact, Workday licensing will cost approximately $1 million less per year than the current maintenance costs of hardware and software for BASIS and UAConnect. So while there will be some short term pain in adopting a system of this size and complexity, it will pay long-term dividends. This is all to say your university is in good hands. We care about the bottom line and we take pride in the sound fiscal management of university resources. We also welcome the opportunity to share that information with our stakeholders across the state. Thank you so much for your support. Joe Steinmetz Chancellor 2 3 UNIVERSITY OF ARKANSAS 2018-2019 ANNUAL FINANCIAL REPORT PROGRESS AND MAJOR INITIATIVES Private Gift Support Impacts the Institution The University of Arkansas continues to rely on private gift Fundraising totals reached $108.1 million in 2012, $108.4 support from alumni, friends, corporations and foundations million in 2013, $113.3 million in 2014, $116.5 million in 2015, to support students, faculty, staff, programs and facilities on $131.6 million in 2016, $134.2 million in 2017 and $292.7 million campus. Fiscal year 2019 was the penultimate fundraising in 2018. year for Campaign Arkansas and another strong year overall. The university recorded $163.4 million in private gift support, The following gifts of $500,000 or more were announced surpassing its production goal of $125.6 million, and included publicly during fiscal year 2019. gifts of cash, gifts-in-kind, planned gifts and new pledges to the U of A received from July 1, 2018, through June 30, 2019. • A $23.7 million investment from the Walton Family Charitable Support Foundation for the university’s research Every aspect of the University of Arkansas campus benefits from and economic development infrastructure. The gift will philanthropy. Students are supported through academic and strengthen the university’s research engine, driving innovation need-based scholarships and fellowships, as well as innovative across disciplines, leading to the commercialization of new programs funded through private gift support. Faculty are technologies and ultimately enhancing economic activity in recruited and retained with endowed positions and research the state. funding and thereby increase the quality of education offered to the students. And facilities are built and improved upon to • A $1 million gift from Ansel and Virginia Condray to create keep up with the demands of a growing campus population and the Babcock and Condray Families Innovative Teaching collaborative educational needs. Endowment in Chemical Engineering for the College of Engineering. Approximately $17.8 million of the total amount raised was directed by donors to be used as endowment when received. • A planned gift of more than $1 million from Jean Cameron Cash receipts, which include pledge payments, outright gifts “Cami” Jones to benefit the Fay Jones School of Architecture and estate and planned gift distributions, reached $151.8 million and Design and University Libraries. Half of Jones’s gift will in fiscal year 2019. More than 52,000 benefactors contributed provide funding for the Fay and Gus Jones House Stewardship 101,253 outright gifts and new pledges during the fiscal year. Endowment, and the remaining half will be used to create two new endowments – the Fay Jones Distinguished Visitor Gifts from individuals such as alumni, friends, parents, faculty Endowment and the Fay and Gus Jones Endowment in Special and staff made up 16 percent of the $163.4 million raised Collections. during the 2019 fiscal year. Another 35 percent came from corporations, while 40 percent came from foundations and 9 • A pledge of $500,000 to the Department of Civil Engineering percent came from other organizations, including trusts and in the College of Engineering for financial support for concrete estates. All private gifts to the university are designated and pavement initiatives, research and related activities. The gift allocated for specific purposes set forth by each donor and used was made by the Oklahoma/Arkansas chapter of the American solely for those purposes. The university makes every effort to Concrete Pavement Association. align donors’ giving interests with campus priorities. • Kelly and Steve Barnes committed $500,000 to the Sam M. Support for capital improvements accounted for 39 percent of Walton College of Business to create the Kelly and Steve Barnes the money raised, 31 percent provided for student scholarships Health and Wellbeing Innovation Fund, which will promote and academic programs, 18 percent supported other key collaborations between health care and business. initiatives and 12 percent supported faculty and staff. 4 5 UNIVERSITY OF ARKANSAS 2018-2019 ANNUAL FINANCIAL REPORT Campaign Arkansas Campaign Arkansas launched to the public in fiscal year 2017 Gifts by Purpose with a working goal of $1 billion, which was increased