ANNUAL R E PORT 2018-19 INCLUDING FINANCIAL STATEMENTS Contents Financial results Our financial health Financial results 1 President’s message The following table illustrates the financial results of the University presented on a funding basis as well as in accordance with Chair’s message accounting standards for not-for-profits (NFPS). A reconciliation between two presentations can be found starting on page 64. Gervan Fearon, President and Vice-Chancellor Chair of the Board’s message 2 Figure 1 Chair of Senate’s message 3 Funding NFPS Funding NFPS Leadership 2018-19 2018-19 2018-19 2018-19 2017-18 2017-18 ($000s) Message from leadership 5 Actual Budget Actual Budget Actual Actual Governance Revenue Governance at Brock University 6 It is my pleasure to extend warm greetings on behalf of the entire team here at Brock Student fees 178,067 178,091 178,739 178,091 167,446 167,658 Board of Trustees 6 University. Grant revenue 97,927 97,575 96,442 95,814 97,371 96,156 Senate (Pullout 1) i Our financial health Internal chargebacks 10,055 8,994 9,426 Institutional Strategic Plan ii The University has enjoyed an outstanding year, marked by successes and milestones The big picture iv that reflect excellence in teaching and research, as well as a new generation of Inter-fund revenue 6,712 5,416 3,239 Research revenue 14,592 11,031 12,794 Student Experience 11 community partnerships that create experiential learning opportunities for our students Other revenue 51,333 49,130 64,144 62,211 48,600 60,589 New programs 15 while also contributing to the strength and vitality of our neighbouring communities. Research 17 Total revenues 344,094 339,206 353,917 347,147 326,082 337,197 Community Engagement 22 One of the most significant strides Brock has taken in recent years was the completion Operating costs Inclusivity 26 of a new Institutional Strategic Plan that lays out clear definitions and goals in terms of Personnel costs (212,647) (219,568) (220,714) (222,683) (205,233) (212,064) Brock Sports achievements 31 where the University should be focusing its efforts and tracking progress over the next Inter-fund expense (29,950) (25,293) (23,288) Brock student excellence 33 seven years. Approved in November 2018 by our University Senate and our Board of Other operating costs (94,993) (94,345) (117,284) (119,332) (92,419) (113,085) Teaching awards 34 Trustees, the document was developed through extensive consultation with hundreds Total operating costs (337,590) (339,206) (337,998) (342,015) (320,940) (325,149) Graduate Studies awards 38 Funding surplus (before discretionary of participants from across the University and neighbouring communities. This 6,504 - 15,919 5,132 5,142 12,048 Research awards and appropriations) collective effort established four key strategic priorities for the University: Canada Research Chairs 39 Discretionary appropriations (6,475) (5,132) Excellence in staff 40 • Offering a transformational and accessible academic and university experience; Funding surplus (after discretionary 29 - 15,919 5,132 10 12,048 Donations (Pullout 2) ii • Building research capacity across the University; appropriations) Excellence in 2018-19 iv • Enhancing the life and vitality of our local region and beyond; and Our people 45 • Fostering a culture of inclusivity, accessibility, reconciliation and decolonization. Reviewing the numbers Financial facts 47 We also celebrated other highlights in 2018-19. In terms of reputational attraction and Statement of operations metrics Overview 50 educational prominence, Brock saw its total enrolment surpass 19,000 students for the Financial results – funding basis 51 first time ever. We crossed another major threshold last year when we convocated the Figure 2 Revenue and expense (1) (2) (2) 100,000th graduate in Brock University’s history. These alumni have gone on to find By student headcount Brock Median Average 1 allocation model 62 rewarding jobs, build outstanding careers and contribute at local and global levels. ($000s) April 2019 April 2018 April 2017 April 2018 April 2017 April 2018 April 2017 Funding basis reconciled to the Financial Statements 64 Student fees (primarily tuition) 9.35 8.90 8.43 9.29 8.94 9.13 8.78 Advancing its research scope, Brock is increasing its complement of Canada Research Grant 6.01 5.98 5.89 9.67 9.68 11.27 10.92 Examination of net assets 66 Chair positions to 13, a tribute to the calibre of our faculty members. Financial review of the audited Personnel costs 11.55 11.26 10.90 13.76 13.78 14.28 14.06 Financial Statements 68 In our commitment to advancing Indigenous engagement on campus and across the Scholarships 1.24 1.19 1.16 1.43 1.34 1.52 1.43 Taking a closer look at some community, we created the new executive position of Vice-Provost for Indigenous Interest on long-term debt 0.37 0.38 0.39 0.28 0.26 0.28 0.27 of the numbers 69 Engagement, and have appointed Amos Key, Jr. to that role. Investment income 0.18 0.11 0.12 0.54 0.81 0.57 0.81 University Risk Management 77 Annual Report 2018-19 (1) Certain Brock metrics have been adjusted due to a change in reporting of student headcount to include the number of new-entry students in programs having a Winter Term start date. Financial Statements Brock embraces opportunities to work alongside community partners on meaningful (2) Calculated using financial information from 14 other comprehensive universities. Certain 2017 metrics have been updated due to revisions in certain universities’ financial statements. Statement of Administrative initiatives, and this year we signed Memoranda of Understanding with both Niagara Responsibility 79 Health and Pathstone Mental Health, adding to agreements with the Township of Brock’s tuition is in line with the average; however, grant revenue per student continues to be well below the sector average and Independent Auditor’s Report 80 represents an area of ongoing attention for the University. Naturally, Brock operates more efficiently given the below-average funding, Statement of Financial Position 83 Lincoln and others. We pursue these collaborations as a way to help improve the quality Statement of Operations 84 of life for families who are our neighbours all across Niagara. Brock is also playing a key and this is seen in the lower personnel costs per student. Brock continues to invest in students through increasing scholarships. Statement of Changes in Net Assets 85 role in support of the upcoming 2021 Canada Games being held here in Niagara. Interest and investment income metrics are in line with Brock’s financial health metrics, as detailed below. Statement of Cash Flows 86 Another meaningful day came on Feb. 1, when we officially opened the beautiful new Notes to Financial Statements 87 Appendices $24-million home of our Goodman School of Business, overseen by members of the Financial health metrics Appendix 1 104 family of our former Chancellor, Ned Goodman. Figure 3 Facilities Management (FM) The Rankin Family Pavilion is well underway and will house the Brock LINC, which is an Brock(1) Median (2) Weighted average (2) utilities savings 104 entrepreneurial learning and incubator space to facilitate the development of business April 2019 April 2018 April 2017 April 2018 April 2017 April 2018 April 2017 Appendix 2 105 Primary reserve ratio 16.6% 17.1% 14.6% 30.9% 34.7% 40.3% 37.8% Niagara Community Observatory initiatives through the involvement of students, faculty and staff, as well as local Debt burden ratio 2.8% 2.9% 3.0% 2.6% 2.6% 2.9% 2.7% Policy Brief#36 105 businesses and social enterprises. Interest burden % 2.2% 2.4% 2.5% 1.6% 1.7% 1.4% 1.4% And finally, the Brock community was pleased and proud to learn that our Chancellor, Interest coverage 4.97 4.23 3.70 8.51 7.89 6.98 6.55 Shirley Cheechoo, was named to the Order of Canada. Viability ratio 44.8% 39.3% 31.9% 133.7% 154.5% 116.5% 126.2% This report contains certain forward-looking I invite you to read this annual report to get a more fulsome sense of how Brock Net operating revenues ratio 9.8% 9.2% 5.1% 10.6% 7.5% 9.8% 8.1% information. In preparing the 2018-19 Annual Employee future benefits per student headcount ($000s) $(0.89) $(1.47) $(0.53) $(3.31) $(3.03) $(2.24) $(2.37) University functions and thrives as a post-secondary educational institution of Report, certain assumptions and estimates were Endowment per student headcount ($000s) $5.60 $5.13 $4.98 $8.44 $8.75 $7.69 $7.42 necessary. They are based on information available continued growing renown and contributing partner to regional community and to management at the time of preparing the budget. (1) Certain Brock metrics have been adjusted, due to a change in reporting of student headcount, to include the number of new-entry students in programs having a Winter Term start date. Users are cautioned that actual results may vary. economic vitality. (2) Calculated using financial information from 14 other comprehensive universities. Certain 2017 metrics have been updated due to revisions in certain universities’ financial statements. Throughout the text in this annual report, financial values have been rounded to the nearest thousand. Refer to page 72 for explanations of the debt-related financial health metrics. Chair of the Board’s message Chair of Senate’s message Gary Comerford, Chair of the Board, Brock University Scott Henderson, Chair of Senate, Brock University On behalf of the Board of Trustees at Brock University, I am to Brock.