Nonoperating Revenues and Expenses Certain revenue sources that the Regional Campus relies on to provide funding for operations, including State appropriations, certain gifts and grants
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Operating Expenses
Expenses are categorized as operating or nonoperating The majority of the Regional Campus’s expenses are operating expenses as defined by GASB Statement No 35 GASB gives financial reporting entities the choice of reporting operating expenses in the functional or natural classifications The Regional Campus has chosen to report the expenses in their natural classification on the statement of revenues, expenses, and changes in net assets and has displayed the functional classification in the notes to financial statements
The following summarizes the operating expenses by natural classifications for the 2009-10 and 2008-09 fiscal years:
Operating Expenses (In Thousands)
2009-10 2008-09 Compensation and Employee Benefits $ 11,600 $ 10,400 Services and Supplies 2,078 1,577
Utilities and Communications 87 81
Scholarships, Fellowships, and Waivers 1,483 1,338 Depreciation 719 708
Total Operating Expenses $ 15,967 $ 14,104 Total operating expenses increased by $1.9 million mainly attributable to increases in compensation and employee benefits of $1.2 million; services and supplies of $0.5 million; and scholarships, fellowships, and waivers of $0.1 million Increases in compensation and employee benefits, and services and supplies are the result of increased faculty/support personnel, infrastructure, and program and campus operating support Nonoperating Revenues and Expenses Certain revenue sources that the Regional Campus relies on to provide funding for operations, including State appropriations, certain gifts and grants, and investment income, are defined by GASB as nonoperating Nonoperating expenses include capital financing costs and other costs related to capital assets The following summarizes the Regional Campus’s nonoperating revenues and expenses for the 2009-10 and 2008-09 fiscal years: Nonoperating Revenues (Expenses) (In Thousands) 2009-10 2008-09 State Appropriations $ 12,995 $ 8,621 Federal and State Student Financial Aid 1,980 1,589 State Appropriated American Recovery and Reinvestment Act Funds 709
Investment Income 249 116
Other Nonoperating Revenues 2 2
Interest on Capital Asset-Related Debt (20)
Other Nonoperating Expenses (47) (288)
Net Nonoperating Revenues $ 15,888 $ 10,020 Total nonoperating revenues (expenses) increased by $5.9 million, due primarily to a 50.7 percent increase in State appropriations of $4.4 million The appropriation increase will assist in establishing the faculty/support personnel and infrastructure necessary to meet operating requirements of the Regional Campus as it aligns course offerings and faculty hires necessary to meet the Polytechnic mission and vision of an applied learning environment Other changes included an increase in Federal and State student financial aid of $0.4 million, State Appropriated American Recovery
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and Reinvestment Act funds of $0.7 million, and an increase in investment income of $0.1 million due to an increase
in the average investment portfolio balance and favorable changes in investment activities Other nonoperating expenses decreased $0.2 million mainly due to a reduction in the loss on disposal of capital assets
Other Revenues, Expenses, Gains, or Losses
This category is mainly composed of capital appropriations; capital grants, contracts, donations and fees; and transfers
to and from other University campuses The following summarizes the Regional Campus’s other revenues, expenses, gains, or losses for the 2009-10 and 2008-09 fiscal years:
Other Revenues, Expenses, Gains, or Losses
(In Thousands)
2009-10 2008-09 Capital Appropriations $ 10,490 $ 15,220 Capital Grants, Contracts, Donations, and Fees 17,914 Transfers To/From Other University Campuses, Net (297) 792
Total other revenues decreased by $23.7 million The major reduction in capital grants, contracts, donations, and fees was because of a onetime donation of land, $17.9 million, recorded in the 2008-09 fiscal year Capital appropriations decreased $4.7 million from the previous fiscal year’s continued funding for the new campus building A reduction of
$1.1 million in net transfers to/from other university campuses was primarily from interdepartmental charges and cash transfers between other campus University funds
T HE S TATEMENT OF C ASH F LOWS
The statement of cash flows provides information about the Regional Campus’s financial results by reporting the major sources and uses of cash and cash equivalents This statement will assist in evaluating the Regional Campus’s ability to generate net cash flows, its ability to meet its financial obligations as they come due, and its need for external financing Cash flows from operating activities show the net cash used by the operating activities of the Regional Campus Cash flows from the capital financing activities include all plant funds Cash flows from the investing activities show the net source and use of cash related to purchasing or selling investments, and earning income on those investments Cash flows from the noncapital financing activities include those activities not covered in other sections
The following summarizes cash flows for the 2009-10 and 2008-09 fiscal years:
Condensed Statement of Cash Flows
(In Thousands)
2009-10 2008-09 Cash Provided (Used) by:
Operating Activities $ (9,910) $ (9,068) Noncapital Financing Activities 15,047 11,459 Capital and Related Financing Activities (819) (129) Investing Activities (2,351) (9,370)
Net Increase (Decrease) in Cash and Cash Equivalents 1,967 (7,108) Cash and Cash Equivalents, Beginning of Year 3 7,111
Cash and Cash Equivalents, End of Year $ 1,970 $ 3
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Major sources of operating activities cash inflows included net student tuition and fees ($4.4 million) and grants and contracts ($0.3 million) The three major outflows included in the calculation of net cash used for operating activities are payments to employees ($11.1 million), payments to suppliers ($2.1 million) and payments to students for scholarships and fellowships ($1.5 million) The net cash used for operating activities increased by $0.8 million, primarily due to increases in payments to employees of $0.8 million, payments to suppliers of $0.3 million and payments to students for scholarships and fellowships of $0.1 million, offset by increases in tuition and fees collections of $0.5 million, and a reduction in grants and contracts of $0.1 million
The net cash provided by noncapital financing activities consists primarily of $13 million of State appropriations,
$0.7 million of American Recovery and Reinvestment Act funds, and $2 million for Federal and State student financial aid received during the 2009-10 fiscal year
Cash used by capital and related financing activities increased by $0.7 million This was mainly due to an increase in purchases or construction of capital assets
Cash used by investing activities decreased by $7 million mainly due to a decrease in purchases of investments and a
change in investment strategy and activities
CAPITAL ASSETS, CAPITAL EXPENSES AND COMMITMENTS,
AND DEBT ADMINISTRATION
C APITAL A SSETS
At June 30, 2010, the Regional Campus had $39.8 million in capital assets, less accumulated depreciation of
$3.9 million, for net capital assets of $35.9 million Depreciation charges for the current fiscal year totaled
$0.7 million The following table summarizes the Regional Campus’s capital assets, net of accumulated depreciation at June 30:
Capital Assets, Net at June 30 (In Thousands)
Construction in Progress 5,734 3,848 Infrastructure and Other Improvements 29 31 Furniture and Equipment 1,386 1,447 Library Resources 27 44 Other Capital Assets 160 139
Additional information about the Regional Campus’ capital assets is presented in the notes to financial statements
C APITAL E XPENSES AND C OMMITMENTS
The following table summarizes the Regional Campus’s major capital commitments as of June 30, 2010:
Amount
Current Commitment $ 20,400
Balance Committed $ 14,666
(In Thousands)
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D EBT A DMINISTRATION
The Regional Campus’s beginning net assets was increased by $0.5 million to correct an error in reporting bonds and revenue certificates payable for State University System Capital Improvement Trust Fund Revenue Bonds In prior fiscal years the liability for these bonds was reported on the Regional Campus’s statement of net assets It has subsequently been determined that these bonds are not debt of the Regional Campus Although proceeds from the bonds were provided to the Regional Campus for capital projects, the Regional Campus is not responsible for the repayment of the bonds Repayment of the bonds is the responsibility of the Florida Board of Governors to be paid from capital improvement fees collected by all universities and remitted in total to the Florida Department of Education After the recording of this adjustment the Regional Campus has no bonds or revenue certificates payable
ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE
Chapter 2010-206, Laws of Florida, established the Florida Industrial and Phosphate Research Institute (FIPRI, formerly Florida Institute of Phosphate Research) within the University of South Florida Polytechnic The law became effective June 4, 2010 In the 2010-11 fiscal year, FIPRI will receive authority for approximately $7.3 million
by the Phosphate Research Trust Fund This appropriation is not reflected in the Regional Campus 2009-10 fiscal year State allocated funding
Effective July 1, 2010, Chapter 2010-155, Laws of Florida, authorized a doctor of pharmacy degree program at the University of South Florida to be housed at the University of South Florida Polytechnic new campus facility upon completion of facility construction New legislative appropriations for the doctor of pharmacy degree program will be received through Regional Campus appropriations
The recent economic downturn has affected the level of State appropriations The Legislature has authorized tuition increases over the past few years, combined with increased technology and distance learning fees, intended to provide additional resources to support a balanced budget and expansion of academic programs and services to support students
The budget adopted by the Florida Legislature for the State University System for the 2010-11 fiscal year reflected a base budget reduction for the Regional Campus of $459,666 To offset the base budget adjustment, the Legislature allocated $678,080 nonrecurring Federal stimulus funds to the Regional Campus The 2010-11 fiscal year is the second of two years this funding is expected to be allocated The Regional Campus has examined their operations to generate savings in both administrative and academic areas in anticipation that the Federal stimulus funding will not continue
Regional Campus management is committed to meeting its enrollment growth plan to increase full-time student enrollment from 943 in the 2010-11 fiscal year to 2,228 in the 2015-16 fiscal year The Regional Campus is developing more daytime and on-line courses to meet enrollment targets The Regional Campus expects to begin offering lower-level courses in Spring 2011 and admit freshman and sophomore students in the Fall 2013 term Activities associated with Florida Industrial and Phosphate Research Institute do not directly involve student enrollment
At the campus facility shared with Polk State College, the Regional Campus currently occupies 69,830 square feet of offices, classrooms, and both campus and student support space The Regional Campus has been moving through the planning and approval steps necessary for development of its new campus site at Interstate 4 and the Polk Parkway The first facility will establish an open, multipurpose design in support of the interdisciplinary and collaborative learning environment foundational to a polytechnic experience for our students The Legislature, in the 2010-11 fiscal year, approved a $16 million enhancement funding appropriation which provided $10 million for
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faculty and staff hires and programs in support of upper and lower level coursework and freshman and sophomore admissions at the Regional Campus, and provided $6 million operating support for the doctor of pharmacy program
at USF to be housed at the Regional Campus upon completion of facility construction
REQUESTS FOR INFORMATION
Questions concerning information provided in the MD&A or other required supplementary information, and financial statements and notes thereto, or requests for additional financial information should be addressed to Linda Peterson, University Controller, 4202 East Fowler Avenue, Tampa, Florida 33620-5800
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BASIC FINANCIAL STATEMENTS
ASSETS
Current Assets:
Cash and Cash Equivalents $ 1,940,689
Accounts Receivable, Net 673,634 Loans and Notes Receivable, Net 36,124
Noncurrent Assets:
Restricted Cash and Cash Equivalents 29,806 Restricted Investments 183,070 Loans and Notes Receivable, Net 84,289 Depreciable Capital Assets, Net 12,255,006 Nondepreciable Capital Assets 23,643,707
LIABILITIES
Current Liabilities:
Construction Contracts Payable 229,293 Salaries and Wages Payable 538,412
Long-Term Liabilities - Current Portion:
Compensated Absences Payable 63,943
Total Current Liabilities 1,118,877
UNIVERSITY OF SOUTH FLORIDA POLYTECHNIC
STATEMENT OF NET ASSETS
June 30, 2010
A REGIONAL CAMPUS OF THE UNIVERSITY OF SOUTH FLORIDA
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LIABILITIES (Continued)
Noncurrent Liabilities:
Federal Advance Payable $ 96,193 Compensated Absences Payable 715,342 Other Postemployment Benefits Payable 308,750
Total Noncurrent Liabilities 1,120,285
NET ASSETS
Invested in Capital Assets 35,898,713 Restricted for Expendable:
TOTAL LIABILITIES AND NET ASSETS $ 77,377,545 The accompanying notes to financial statements are an integral part of this statement.
UNIVERSITY OF SOUTH FLORIDA POLYTECHNIC STATEMENT OF NET ASSETS (Continued)
June 30, 2010
A REGIONAL CAMPUS OF THE UNIVERSITY OF SOUTH FLORIDA
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REVENUES
Operating Revenues:
Student Tuition and Fees, Net of Scholarship
Federal Grants and Contracts 323,952 State and Local Grants and Contracts 13,931 Nongovernmental Grants and Contracts 18,152 Sales and Services of Auxiliary Enterprises 23,753 Interest on Loans and Notes Receivable 1,235
EXPENSES
Operating Expenses:
Compensation and Employee Benefits 11,599,663
Utilities and Communications 86,619 Scholarships, Fellowships, and Waivers 1,483,525
NONOPERATING REVENUES (EXPENSES)
State Appropriations 12,995,407
Federal and State Student Financial Aid 1,979,830
State Appropriated American Recovery and Reinvestment
Other Nonoperating Revenues 1,695
Other Nonoperating Expenses (46,842)
Income Before Other Revenues, Expenses,
Capital Appropriations 10,489,797
Transfers To/From Other University Campuses, Net (296,831)
Net Assets, Beginning of Year 59,737,373
Adjustment to Beginning Net Assets 484,557
The accompanying notes to financial statements are an integral part of this statement.
UNIVERSITY OF SOUTH FLORIDA POLYTECHNIC STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 2010
A REGIONAL CAMPUS OF THE UNIVERSITY OF SOUTH FLORIDA
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CASH FLOWS FROM OPERATING ACTIVITIES
Grants and Contracts 325,375
Sales and Services of Auxiliary Enterprises 22,829
Interest on Loans and Notes Receivable 2,015
Payments to Employees (11,130,357)
Payments to Suppliers for Goods and Services (2,082,940)
Payments to Students for Scholarships and Fellowships (1,483,525)
Net Loans Issued to Students 58,375
Net Cash Used by Operating Activities (9,909,502)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Federal and State Student Financial Aid 1,979,830
State Appropriated American Recovery and Reinvestment
Operating Subsidies and Transfers (607,589)
Net Change in Funds Held for Others (2,586)
Net Cash Provided by Noncapital Financing Activities 15,047,222
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Capital Appropriations 1,027,466
Purchase or Construction of Capital Assets (1,846,414)
Net Cash Used by Capital and Related Financing Activities (818,948)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase or Sale of Investments, Net (2,356,454)
Investment Income 5,463
Net Cash Used by Investing Activities (2,350,991)
Net Increase in Cash and Cash Equivalents 1,967,781
Cash and Cash Equivalents, Beginning of Year 2,714
Cash and Cash Equivalents, End of Year $ 1,970,495
UNIVERSITY OF SOUTH FLORIDA POLYTECHNIC
STATEMENT OF CASH FLOWS For the Fiscal Year Ended June 30, 2010
A REGIONAL CAMPUS OF THE UNIVERSITY OF SOUTH FLORIDA
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RECONCILIATION OF OPERATING LOSS
TO NET CASH USED BY OPERATING ACTIVITIES
Adjustments to Reconcile Operating Loss
to Net Cash Used by Operating Activities:
Depreciation Expense 718,882
Change in Assets and Liabilities:
Compensated Absences Payable 130,455
Other Postemployment Benefits Payable 165,431
The accompanying notes to financial statements are an integral part of this statement.
UNIVERSITY OF SOUTH FLORIDA POLYTECHNIC STATEMENT OF CASH FLOWS (Continued) For the Fiscal Year Ended June 30, 2010
A REGIONAL CAMPUS OF THE UNIVERSITY OF SOUTH FLORIDA
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