351.7232 L72aisac 1985 State of Montana Office of the Legislative Auditor REPORT TO THE LEGISLATURE MONTANA STATE UNIVERSITY MONTANA AGRICULTURAL EXPERIMENT STATION MONTANA COOPERATIVE EXTENSION SERVICE Financial-Compliance Audit for the Two Fiscal Years Ended June 30, 1985 This report contains seven recommendations for improvement of the university operations. The ma- jor items addressed in the report include: ► Compliance with state and federal laws gov- erning hiring policies and compensation for student and non-student hourly employment. ► Compliance with reporting of unrestricted stu- dent FTEs. ► Lost interest of approximately $50,000 due to cash management of federal funds. ► Compliance with purchasing policies. PLEASE RETURN STATE DOCUMENTS COLLECTION OCT 2 8 1986 MONTANA STATE LIBRARY 1515 E. 6th AVE. HCLENA, MONTANA 59620 85-2 Direct Comments/Inquiries to: Office of the Legislative Auditor Room 135, State Capitol Helena, Montana 59620 MONTANA STATE LIBRARY S 35 1 .7232 L72msuc 1 985 c. 1 Montana State University, Montana Agricu 3 0864 000S5971 9 FINANCIADCOMPLIANCE AUDITS Financial-compliance audits are conducted by the Office of the Legislative Auditor to determine if an agency's financial operations are properly conducted, the financial reports are presented fairly, and the agency has complied with applicable laws and regulations which could have a significant impact on the financial schedules. In performing the audit work, the audit staff uses standards set forth by the American Institute of Certified Public Accountants and the United States General Accounting Office. Financial-compliance audit staff members hold degrees with an emphasis in accounting. Most staff members hold Certified Public Accountant (CPA) certificates. MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE: Senator Judy Jacobson, Chairman Representative John Cobb, Senator Dave Fuller Vice Chairman Senator Pat Goodover Representative Dorothy Bradley Senator Tom Keating Representative Roland Kennedy Representative Bruce Simon Office of the Legislative Auditor MONTANA STATE UNIVERSITY MONTANA AGRICULTURAL EXPERIMENT STATION MONTANA COOPERATIVE EXTENSION SERVICE Financial and Compliance Report For the Two Fiscal Years Ended June 30, 1985 Members of the audit staff involved in this audit were: Julie Barr Brian Farmer Jody Mauel Don Davies John Fine Suzanne Wellcome Mike Donovon Wayne Kedish Brian Zwang Laurie Evans Diane Madden ^(1/ STATE OF MONTANA §ffrc^ nf ike ^t^isiciii'^t ^ubiixxx STATE CAPITOL HELENA, MONTANA 59620 406/444-3122 SCOTT A. SEACAT LEGISLATIVE AUDITOB DEPUTY LEGISLATIVE AUDITORS: JAMES GILLETT FINANCIAL COMPLIANCE AUDITS JIM PELLEGRINI PERFORMANCEAUOITS LEGAL COUNSEL: JOHN W. NORTHEY The Legislative Audit Committee of the Montana State Legislature: This is our financial-compliance audit report on the Montana State University, Cooperative Extension Service, and Agriculture Experiment. Station financial activity for fiscal years 1983-84 and 1984-85. The university's written response to audit recommendations is included in the back of the audit report. We thank the president and his staff for their cooperation and assistance throughout the audit. ResDectfully submitted. Scott A. Seacat Legislative Auditor TABLE OF CONTENTS Page Appointive and Administrative Officials iv Summary of Recommendations v Introduction 1 Background 1 Legal Compliance 2 Hourly Pay Issues 3 Funding Levels '^ Student Withdrawal Notices 5 Purchasing 7 Cash Management 8 Inter-Entity Loans 9 Expenditure Accruals 10 Cash Deposits 11 Equipment 12 Internal Control 13 Prior Audit Recommendations 1^ Auditor's Opinion Letter and Montana State University Financial Statements Summary of Audit Opinion Auditor's Opinion Letter - MSU 15 MSU Financial Statements Balance Sheets - June 30, 1985 17 Statement of Changes in Fund Balances Year Ended June 30, 1985 21 TABLE OF CONTENTS (Continued^ Page Statement of Current Funds, Revenues, Expen- ditures, and Other Changes, Year Ended June 30, 1985 25 Notes to the Financial Statements, June 30, 1985 27 Balance Sheets - June 30, 1984 33 Statement of Changes in Fund Balances Year Ended June 30, 1984 37 Statement of Current Funds, Revenues, Expenditures, and Other Changes, Year Ended June 30, 1984 41 Notes to the Financial Statements - June 30, 1984 43 Schedule of Grant Expenditures and Disbursements Fiscal Year Ended June 30, 1985 49 Schedule of Grant Expenditures and Disbursements Fiscal Year Ended June 30, 1984 63 Schedule of Full-Time Equivalent (FTE) Students For the Two Years Ending June 30, 1985 77 Auditor's Opinion Letter and Agricultural Experiment Station Financial Statements Auditor's Opinion Letter - AES 78 AES Financial Statements Balance Sheets - June 30, 1985 80 Statement of Changes in Fund Balances Year Ended June 30, 1985 82 Statement of Current Funds, Revenues, Expenditures, and Other Changes, Year Ended June 30, 1985 84 Notes to the Financial Statements - June 30, 1985 85 TABLE OF CONTENTS (Continued) Page Balance Sheets - Year Ended June 30, 1984 88 Statement of Changes in Fund Balances Year Ended June 30, 1984 90 Statement of Current Funds, Revenues, Expenditures and Other Changes, Year Ended June 30, 1984 92 Notes to the Financial Statements - June 30, 1984 93 Auditor's Opinion Letter and Cooperative Extension Service Financial Statements Auditor's Opinion Letter - CES 96 CES Financial Statements Balance Sheets - Year Ended June 30, 1985 98 Statement of Changes in Fund Balances Year Ended June 30, 1985 100 Statement of Current Funds, Revenues, Expenditures and Other Changes, Year Ended June 30, 1985 101 Notes to the Financial Statements - June 30, 1985 102 Balance Sheets - Year Ended June 30, 1984 105 Statement of Changes in Fund Balances Year Ended June 30, 1984 _ 107 Statement of Current Funds, Revenues, Expenditures and Other Changes, Year Ended June 30, 1984 108 Notes to the Financial Statements 109 Agencies Response Montana State University 112 Commissioner of Higher Education 115 III APPOINTIVE AND ADMINISTRATIVE OFFICIALS BOARD OF REGENTS OF HIGHER EDUCATION Term Expires Ted Schwinden, Governor* 1988 Ed Argenbright, Superintendent of Public Instruction* 1988 Jeffrey Morrison, Chairman Helena 1987 Dennis Lind, Vice Chairman Missoula 1989 Beatrice McCarthy Anaconda 1990 David Paoli Missoula 1986 Bert Hurwitz White Sulphur Springs 1993 Elsie Redlin Sidney 1991 John Scully Bozeman 1992 *Ex officio members COMMISSIONER OF HIGHER EDUCATION Dr. Carrol Krause Commissioner of Higher Education John Noble Deputy Commissioner for Management and Financial Affairs MONTANA STATE UNIVERSITY ADMINISTRATION Dr. William Tietz President Dr. Stuart Knapp Vice President for Academic Affairs Dr. James Pickett Acting Director of Administration Until June 30, 1986 James Isch Director of Administration Effective July 1 , 1986 Dr. John Jutila Vice President for Research Dr. James Welsh Director, Agricultural Experiment Station Dr. Carl J. Hoffman Vice President for Extension and Director, Cooperative Extension Service iv SUMMARY OF RECOMMENDATIONS This listing serves as a means of summarizing the recommendations contained in the report and the university's response to them. The major issues address problems concerning compliance with state and federal laws governing hiring policies and compensation for student and nonstudent hourly employment; compliance with reporting of unrestricted student FTEs; cash management of grant and contract funds; and compliance with purchasing policies. Page Recommendation #1 The university properly report student FTE in accordance with Regents policy. 5 University Response: Concur. See page 113. Commissioner of Higher Education Response: Concur. See page 116. Recommendation #2 The university follow state purchasing laws and policies. 7 University Response: Concur. See page 113. Recommendation #3 The university request federal moneys in a manner which will minimize the necessity for the state to advance cash to federal programs. 9 University Response: Concur. See page 113. Recommendation #4 The university establish procedures to forecast cash needs to ensure positive cash balances are maintained in compliance with state laws. 10 University Response: Concur. See page 113. Recommendation #5 The university: A. Accrue expenditures in accordance with state accounting policies. 11 University Response: Concur. See page 114. V SUMMARY OF RECOMMENDATIONS (Continued? Page B. Correct invalid expenditure accruals. 11 University Response: Concur. See page 114. Recommendation #6 The university deposit receipts on a timely basis in accordance with state law. 12 University Response: Concur. See page 114. Recommendation #7 The university: A. Improve controls to ensure all items disposed of and ail inventories are deleted from its property records. 12 University Response: Concur. See page 114. B. Ensure all state equipment items are tagged as state property. 12 University Response: Concur. See page 114. VI INTRODUCTION We performed a financial-compliance audit of Montana State University (MSU) and the related Cooperative Extension Service fCES) and Agricultural Experiment Station (AES) for the two fiscal years ended June 30, 1985. The objectives of the audit were to: 1. determine if the university complied with applicable laws and regulations which could have a significant effect on the financial statements; 2. determine if the financial statements present fairly the financial position and results of operations of the univer- sity for the two fiscal years ended June 30, 1985; and 3. make recommendations for improvements in the manage- ment and internal accounting controls of the university. This report contains seven recommendations to the university. These recommendations address areas where compliance with laws and regulations, management, internal control, and financial re- porting can be improved. Other areas of concern deemed not to have a significant effect on the successful operations of the uni- versity programs are not specifically included in the report, but have been discussed with management. In accordance with section 5-13-307, MCA, we analyzed the costs of implementing the recommendations made in this report. Each report section discloses the cost, if significant, of imple- menting the recommendation. BACKGROUND Montana State University was founded on February 15, 1893, as the Agricultural College of the state of Montana, and instruction started on April 17 of that year. The school was later named Montana State College, and on July 1, 1965, it became Montana State University (MSU). The university is a land-grant institution as authorized by the Morrill Act of 1862 and receives part of its support from land-grant income, as well as state appropriations, student fees, and federal and private grants. The public service function of the university had its origin in the establishment of the Cooperative Extension Service (CES) in 1915, created under the federal Smith-Lever Act and state legis- lation. Financial support for its operation comes from county, state, and federal governments, as well as from federal and pri- vate grants. County agents and specialists are an integral part of the university and channel information to Montanans to aid in solving home, farm, and community problems. The Agricultural Experiment Station (AES) is also an integral part of the university. It was established in 1893 by the Montana Legislature under authorization provided by the federal Hatch Act of 1887. The station receives federal funds under the Hatch Act, as well as state appropriations, federal and private grants, and funds from the sale of surplus agricultural products. The Agri- cultural Experiment Station has eight locations in the state, ex- cluding the Bozeman campus. The station components are devoted to solving present and future agricultural and home economics problems of local, regional, and national concern. The distribution of research centers is such that the peculiarities of local or area soil, water, and climate can be considered. The president of Montana State University is the chief execu- tive officer for all three units: MSU, AES, and CES. The presi- dent is responsible for the immediate direction, management, and control of the institution under the general supervision and direc- tion of the Board of Regents. LEGAL COMPLIANCE We have examined the financial statements of MSU, AES, and CES for the two fiscal years ended June 30, 1985, and have issued our report thereon dated February 14, 1986. Our examination was made in accordance with generally accepted auditing standards. Standards for Audits of Governmental Organizations, Programs, Activities, and Functions, Office Management and Budget (0MB) Circulars A-21 and A-110, and the March 1984 student aid audit guide prescribed by the U.S. Department of Education. Accordingly, we reviewed the state and federal laws and regulations applicable to the university's operations. Areas reviewed include specific state laws which could have a material impact on the university's financial operations, specific grant provisions, cost allowability, eligibility, and grantor reporting. For the items tested, except for the items discussed in the following sections of this report, we found the university complied with applicable laws and regulations. Nothing came to our attention that causes us to believe untested compliance items are not in accordance with applicable laws and regulations. Hourly Pay Issues As part of the regular audit process, MSU officials provide the Legislative Auditor's Office information regarding internal audits they have performed during the audit period or are currently working on. At the end of our audit, we reviewed one internal audit which dealt with issues concerning adherence to state and federal laws and Board of Regents rules governing hiring policies and compensation for student and non-student hourly employment. The first issue addressed the legality of MSU hiring hourly employees without regard to the state pay classification plan. Board of Regents policy (Montana University System Policy and Procedures Manual, section 707), states: "The state classification system shall apply to all non-academic employees of the Montana University System not on individual Board of Regent's contracts." The second issue addressed MSU not paying overtime for temporary hourly employees working in excess of 40 hours per week. This is a violation of state statutes and the federal Fair Labor Standards Act. MSU personnel are currently working with the Office of the Commissioner of Higher Education to resolve the concerns addressed in the internal audit report. Personnel Services and the Financial Aid Office at MSU are in the process of developing systems which will monitor and report any individual who works in excess of 40 hours per week to ensure overtime is paid. Due to the corrective actions MSU is currently taking to address the policy and compliance issues raised in the internal audit report, we are disclosing these compliance issues for infor- mational purposes and make no recommendation at this time. During the next audit, we will follow up on these issues to ensure MSU adequately resolves them. Funding Levels Student enrollment is a factor used by the legislature when it determines state funding levels for each unit of the Montana Uni- versity System. Each unit converts its enrollment figures into full-time equivalents (FTEs). The Office of the Commissioner of Higher Education (CHE) has established policies outlined in the "Registrars' Manual for Reporting Enrollment Data" for the university units to follow in reporting enrollment information. One of the reports CHE requires is the "Summary of Restricted Enrollments and Student Classifica- tions." The criteria for this report states that enrollments gen- erated by restricted funds must be identified so they may be removed from the total enrollment figures utilized to generate state funding. It further states that restricted enrollments mean stu- dent credit hours generated in any course or program in which the instructor's teaching responsibilities are funded by sources outside the regular operating budget (current unrestricted) of the institu- tion. Because MSU receives funding other than state (current unrestricted) moneys for some of its academic programs, MSU should eliminate the FTEs associated with this type of funding from the total FTE counts to properly determine state funding levels. MSU generates a report based on quarterly statistics showing the student credit hours and associated FTE levels produced by grant and contract (restricted) funding. These restricted enroll- ment figures indicate the necessary reductions to total FTEs needed to be made in order to properly compute state funding. We noted that, although the Military Science program is partially federally funded, MSU does not factor out the applicable FTEs in computing the state funded FTE levels. The FTEs associated with the Military Science program were 28.53 in fiscal year 1983-84 and 29.82 in fiscal year 1984-85. MSU reports these FTE because the instructor salaries are paid directly by the federal government and are not supported through a MSU grant and contract account. Therefore, MSU does not consider these FTE to be restricted enrollments. As defined in regents policy. Military Science FTEs clearly meet the restricted criteria and MSU should identify and remove them from enrollment figures used to generate state fund- ing. A university official estimated the General Fund support per FTE is approximately $2,648 during fiscal years 1983-84 and 1984-85. Since MSU did not remove the FTEs associated with the Military Science program, MSU received a maximum of approximately $77,255 additional funding for each of the fiscal years 1983-84 and 1984-85. RECOMMENDATION #1 WE RECOMMEND THE UNIVERSITY REPORT STUDENT FTE IN ACCORDANCE WITH REGENTS POLICY. Student V>^ithdrawai Notices Federal regulations (34 CFR Part 682] require schools to notify lenders who issue students Guaranteed Student Loan (GSL) whenever the students graduate, withdraw, or cease to be enrolled at least half-time. The notification is to be made within 60 days of the withdrawal. MSU uses the Student Confirmation Report (SCR), which discloses the status of GSL students, as a source for lender notification. The Student Confirmation Report is initiated by a private company contracted by the state to act as an information pool and processing facility for the Montana Guaranteed Student Loan Program. The company sends the report to MSU's financial aid office each May and October. The financial aid office sends the report to the registrar's office. The registrar's office indicates the enrollment status of each student and sends the report back to the financial aid office. The report is sent back to the company who then uses the information to update its data base and notify applicable lenders. In those instances where notifica- tion of lenders within 60 days cannot be met via the SCR process, MSU notifies the lenders directly. In a sample of four students who met the above criteria, we found one instance where MSU did not notify the lender of the change in the student's status because MSU did not complete the SCR report for the period covering spring quarter 1984. In order to determine the approximate number of students affected, we reviewed the SCRs for the period just prior and subsequent to the period notification was not made. The SCR for the fall of 1983 showed approximately 400 students who were not enrolled at least half-time and about 800 for the fall of 1984. Since the report for the spring of 1984 was not issued, the fall 1984 report contained the students for both spring and fall. Based on this data, we estimate lenders were not informed of 400 students who had GSLs and were less than half-time as of spring quarter 1984. Beginning in spring quarter 1985, MSU revised its time consuming manual reporting system to an automated one. This system compares a computerized listing of students with GSLs to those students who are not registered at least half-time. A listing is generated for those students meeting the match and MSU then notifies the lenders. After reviewing the procedures employed at MSU to update and complete the SCRs, we determined the procedures appear adequate to ensure these reports are completed and lenders are notified. Therefore, we are only disclosing the compliance issue and do not make a recommendation at this time. We will follow up on MSU's revised reporting system during the next audit and re-evaluate its adequacy to meet federal regulations and reporting requirements. Purchasing State law (section 18-it-221, MCA) states the Department of Administration (DofA), shall govern the procurement of all supplies and services to be procured by the state. The DofA, Purchasing Division, acts as the state's central purchasing agent. The pur- pose of having a centralized function is to provide state agencies with necessary supplies and materials at a reduced cost through quantity discounts and lower overhead. The Department of Admin- istration has delegated purchasing authority to the Cooperative Extension Service Multilith Department for purchases up to $2,000. In our previous two audits we found the Multilith Department of the Cooperative Extension Service (CES) was not properly using Central Purchasing for paper purchases. We reviewed a sample of purchases greater than $2,000 to ensure Multilith was complying with purchasing policies. We found that in five instances Multilith did not use Central Purchasing as required. These purchases ranged from slightly above $2,000 to over $17,000. Multilith personnel explained they do not always use Central Purchasing because they believe they can usually get a better quality paper more suited to their printing needs at a lower cost and in less time than Central Purchasing can deliver. In fiscal year 1983-84, Multilith requested delegated authority for purchases up to $30,000 from DofA. However, DofA denied this request. Because CES has an exemption only for purchases up to $2,000, Multilith purchases greater than $2,000 are in violation of state purchasing policies. In addition, federally sponsored projects use Multilith ser- vices. Federal regulations (0MB Circular A-21 section C3) states that one -of the factors affecting allowability of costs is that the costs claimed for federal reimbursement must be consistent with state laws and regulations. RECOMMENDATION #2 WE RECOMMEND THE UNIVERSITY FOLLOW STATE PURCHAS- ING LAWS AND POLICIES. Cash Management During fiscal year 1984-85, the university received approxi- mately $16 million of federal moneys for federally assisted grants, contracts, and student aid. The university receives these funds through cash requests or drawdowns. Because drawdowns are predominantly on a reimbursement basis and are requested on a monthly or longer basis, there is a time lag between an expendi- ture and subsequent reimbursement that is filled by using state funds. Based on our analysis of balances in federal accounts, we estimated MSU's use of state funds to cover federal cash shortfalls due to the time lag is costing the state approximately $50,000 per year in lost interest. According to university personnel, one of the reasons MSU needs state funds to cover federal cash shortfalls is because of the timing of drawdowns. Drawdowns are generally made during the first 10 days of the month prior to the payroll costs being paid. If MSU were to request federal funds more frequently and also at the time the payroll expenses are paid, it should help reduce the amount of state funds needed to temporarily support federal proj- ects. MSU personnel also indicated that in the past, insufficient staff made frequent drawdowns unrealistic. Since the hiring of additional staff, it should be feasible for MSU to request more fre- quent drawdowns. A certain amount of time lag can be expected, however, we believe MSU could substantially reduce the time lag through more frequent drawdowns. Federal regulations (0MB Circular A-1 10 Attachment F(2e)) state the recipient shall make drawdowns as close as possible to the time of making disbursements. State law (section 17-2-108, MCA), requires agencies to use non-General Fund moneys wherever possible before using General Fund moneys. These federal and state requirements advocate the use of frequent drawdowns in order to minimize lost interest on state or federal funds. RECOMMENDATION #3 WE RECOMMEND THE UNIVERSITY REQUEST FEDERAL MON- EYS IN A MANNER WHICH WILL MINIMIZE THE NECESSITY FOR THE STATE TO ADVANCE CASH TO FEDERAL PRO- CRAMS. Inter-Entity Loans State law (section 1 7-2-1 07(2) , MCA] states that when an expenditure of an appropriation is necessary and there is an insufficient amount of cash, the Department of Administration may authorize a cash transfer (inter-entity loan) of unrestricted moneys from other accounts, provided there is reasonable evidence that income provided for the remainder of the year will be suffi- cient to restore the transferred amount. The loan must be repaid by the end of the fiscal year unless an extension is granted by the Department of Administration. Extensions may be granted for one additional fiscal year if the Department of Administration receives sufficient written justification that the loan is for the sole purpose of: a) repairing or replacing property damage covered by insurance; or b) payment of expenses which will later be reimbursed by certain receipts as detailed in 17-2-107(3), MCA. In addition, section 17-2-107(6), MCA, states that no accounting entity may have a negative cash balance at fiscal year-end. Just prior to fiscal year-end 1983-84 and 1984-85, AES and CES had negative cash balances in certain designated funds. Since this was in violation of section 17-2-107(6), MCA, and to comply with generally accepted accounting principles, MSU recorded inter-entity loans to correct the negative cash balances. However, since the loans were not in accordance with sections 17-2-107(2) and (3), MCA, the Department of Administration did not authorize them. The Department of Administration processed the loans without giving its approval. The problems noted with inter-entity loans are not confined to MSU. The overall issue of inter-entity loans is further addressed in the Department of Administration's report for fiscal years 1983-84 and 1984-85. The Department of Administration has acknow- ledged that this issue exists and intends to address, at least in part, this issue in the next legislative session. MSU should establish cash controls that will ensure compliance with state laws and accounting policies. RECOMMENDATION #4 WE RECOMMEND THE UNIVERSITY ESTABLISH PROCEDURES TO FORECAST CASH NEEDS TO ENSURE POSITIVE CASH BALANCES ARE MAINTAINED IN COMPLIANCE WITH STATE LAWS. Expenditure Accruals According to state law (section 17-7-302, MCA) and account- ing policies (MOM 2-1420 and Management Memo 2-85-3), agencies are allowed to accrue expenditures at fiscal year-end for any valid obligations. An agency has a valid obligation when it has re- quested goods or services through a valid purchase order or inter-agency or intra-agency agreement or has received those goods or services but has not yet paid for them. We found MSU accrued $32,600 for a deferred plant mainte- nance project for which MSU had not received the goods nor had a valid maintenance work order agreement been issued. Plant per- sonnel indicated the accrual was made to use available funds for a project to replace windows in one of the campus buildings as soon as the plans were final. Since MSU did not have a valid obliga- tion, the accrual was not valid under state accounting policies. MSU would have reverted $32,600 of appropriation authority if this accrual had not been made. 10 We also found that during fiscal year 1983-84 MSU received $132,399 of services through computer use agreements. MSU did not accrue these expenditures at fiscal year-end 1983-84. When MSU paid these expenditures, it recorded them as fiscal year 1984-85 expenditures. Since MSU had received the services, it should have accrued the expenditures. In addition, at fiscal year-end 1983-84 CES accrued $3,466 related to two purchases. However, CES did not receive a pur- chase order for these items until July of fiscal year 1984-85. Since CES did not have a valid obligation at June 30, 1984, the accrual was not valid under state accounting policies. If CES reverses these accruals, it will not cause a General Fund reversion because Chapter 710, Laws of 1983 allowed CES to carry over fiscal year 1983-84 unused appropriation balance into fiscal year 1984-85 to fund vacancy savings. RECOMMENDATION #5 WE RECOMMEND THE UNIVERSITY: A. ACCRUE EXPENDITURES IN ACCORDANCE WITH STATE ACCOUNTING POLICIES. B. CORRECT INVALID EXPENDITURE ACCRUALS. Cash Deposits State law (section 17-6-105(6), MCA) requires all moneys received be deposited each day when the accumulated amount of coin and currency exceeds $100 or total collections exceed $500. In any event, all moneys collected shall be deposited at least weekly. During our testing we noted Multilith collections were not deposited on a timely basis. We reviewed deposits made between July 1984 and April 1985. During this time period Multilith deposited collections once or twice a month. These deposits ranged from $207 to $3,000. Multilith personnel indicated this occurs because of busy schedules and wanting to ensure deposits are accurate. The failure to deposit receipts on a timely basis results in lost interest on the undeposited amounts during the time period the deposits are delayed and increases possibility of loss. 11 RECOMMENDATION #6 WE RECOMMEND THE UNIVERSITY DEPOSIT RECEIPTS ON A TIMELY BASIS IN ACCORDANCE WITH STATE LAW. EQUIPMENT MSU, AES, and CES had approximately $45.5 million of equip- ment recorded on its respective Net Investment in Plant Fund at June 30, 1985, During our audit, we noted the following problems: 1. MSU did not delete, from its property listing, all equip- ment which had been disposed of in previous years. For instance, we noted a mass spectrometer valued at $100,000 and a Sigma computer valued at $345,457 were still on the listing even though MSU had disposed of them. MSU should ensure all items disposed of are removed from its property listing, 2. MSU recorded service shop, chemical store, on-campus living and Multilith inventories in its property listing. MSU also recorded these inventories on the financial statements in the Current Funds. Since inventories are not fixed assets, MSU should exclude them from its property listing. 3. MSU did not tag numerous equipment items. For example, we noted many dining hall items and musical instruments were not tagged. To safeguard items, state policy requires all items over $200 be tagged or otherwise identified as state property. MSU should ensure all items are tagged. For those items where placing tags on them is not feasible, MSU should consider alternatives, such as engraving, to identify them as state property. RECOMMENDATION #7 WE RECOMMEND THE UNIVERSITY: A. IMPROVE CONTROLS TO ENSURE ALL ITEMS DISPOSED OF AND ALL INVENTORIES ARE DELETED FROM ITS PROPERTY RECORDS. B. ENSURE ALL STATE EQUIPMENT ITEMS ARE TAGGED AS STATE PROPERTY. 12 INTERNAL CONTROL We have examined the financial statements of the Montana State University (MSU), Montana Cooperative Extension Service (CES), and Montana Agricultural Experiment Station (AES) for the two fiscal years ended June 30, 1985. We issued our opinions dated February 14, 1986, on these statements. As part of our examination, we made a study and evaluation of the system of internal control of the university. Our study evaluated the system as required by generally accepted auditing standards and Standards for Audits of Governmental Organizations, Programs, Activities, and Functions for financial and compliance audits. We classified the controls in the following categories: 1. revenue/ receipts; 2. operating expenditures; 3. payroll; 4. accounts payable/interfund loans payable; 5. accounts receivable/interfund loans receivable; 6. plant, property, and equipment; 7. inventory; 8. cash; 9. contracts and grants; 10. student financial aid; and 11. investments. Our study included the control categories listed above. Through our study, we determined the nature, timing, and extent of our auditing procedures. We applied alternative audit tests to cash, inventory, investments, accounts payable, and accounts receivable because the audit could be performed more efficiently by expand- ing substantive audit work. We did not evaluate the control system to the extent necessary to give an opinion on either indi- vidual segments or the system as a whole. The management of the university is responsible for establish- ing and maintaining a system of accounting control. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of a system are to provide management with reasonable assurance that: 1) assets are safe- 13 guarded against loss from unauthorized use or disposition; 2) transactions are executed in accordance with management's authorization; and 3) transactions are recorded properly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Inherent limitations in any system of controls may cause errors or irregularities to remain undetected. The current system evaluation should not be used to project to future periods since procedures may become inadequate or compli- ance with them may deteriorate. The limited purpose study described in the first paragraph would not necessarily disclose all material weaknesses in the sys- tem. Accordingly, we do not express an opinion on the system of controls used by the university. However, our study and evalua- tion disclosed no conditions that we believe to be a material weak- ness. The preceding four paragraphs are intended solely for the use of management and the legislature and should not be used for any other purpose. This restriction as to use is not intended to limit the distribution of this document which, upon presentation to the Legislative Audit Committee, is a matter of public record. PRIOR AUDIT RECOMMENDATIONS Our last financial-compliance audit and student financial aid audit of the university for the two fiscal years ended June 30, 1983, contained ten recommendations applicable to the university. The university implemented six of the recommendations, partially implemented three of the recommendations, and did not implement one of the recommendations. The recommendations which the university partially implemented concern recording construction in progress, compliance with state law concerning surplus property, and final determinations of questioned federal costs. These rec- ommendations were not included in the report but have been discussed with management. The recommendation which the uni- versity did not implement concerns CES purchasing and is dis- cussed on page 7. 14 MONTANA STATE UNIVERSITY AUDITOR'S OPINION AND AGENCY FINANCIAL STATEMENTS SUMMARY OF AUDIT OPINION The auditor's opinions issued on Montana State University, Agricultural Experiment Station and Cooperative Extension Service are intended to convey to the reader of the financial statements the degree of reliance which can be placed on the amounts pre- sented. The reader may rely on the fairness of the amounts presented on the statements listed in paragraph one of each of the auditor's opinions on pages 15, 78, and 96, except for the specific item discussed in the auditor's opinion on page 15, when analyzing the unit's operations. SCOTT A. SEACAT LEGISLATIVE AUDITOB STATE OF MONTANA STATE CAPITOL HELENA, MONTANA 59620 406/444-3122 DEPUTY LEGISLATIVE AUDITORS: JAMES GILLETT FINANCIAL-COMPLIANCE AUDITS JIM PELLEGRINI PERFORMANCE AUDITS LEGAL COUNSEL: JOHNW. NORTHEY The Legislative Audit Committee of the Montana State Legislature; We have examined the accompanying Balance Sheets of Montana State University (MSU) at June 30, 1984 and June 30, 1985, and the related Statements of Changes in Fund Balances and Current Funds Revenues, Expenditures, and Other Changes for each of the two fiscal years ended June 30, 1985. Our examination was made in accordance with generally accepted auditing standards and Standards for Audits of Governmental Organizations, Programs, Activities, and Functions and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The financial statements presented are only for Montana State University. Accordingly, the accompanying financial statements are not intended to present fairly the financial position of the state of Montana as of June 30, 1984 and 1985 or the results of its operations and changes in its fund balances for the two fiscal years then ended, in conformity with generally accepted accounting principles. The bond payable footnote did not provide adequate disclo- sure. Adequate footnote disclosure for bonds payable should include a summary of the interest rates and repayment amount for each of the next five years on the bonds and a combined amount due following the five year repayment. 15 In our opinion, except for tiie effects discussed in paragrapin three, the financial statements referred to above present fairly the financial position of Montana State University as of June 30, 1984 and June 30, 1985, the changes in its fund balances, and the current funds revenues, expenditures, and other changes for each of the two years then ended in conformity with generally accepted accounting principles which have been applied on a consistent basis. Our examination was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying Schedules of Grant Expenditures for fiscal years ended June 30, 1984 and 1985, and the Schedule of Full-Time Equivalent (FTE) Students for the two years ending June 30, 1985 prepared in accordance with the U.S. Department of Education, U.S. Department of Health and Human Services, and the Regis- trar's Manual for Reporting Enrollment Data reporting requirements are presented as supplemental information and are not a required part of the basic financial statements. This information has been subjected to the auditing procedures applied in our examination of the basic financial statements. In our opinion, except for the effects of the matter discussed in paragraph three, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Respectfully S4Jbmitt^d, 0 James Cillett, CPA Deputy Legislative Auditor February 14, 1985 16 MONTANA STATE UNIVERSITY BALANCE SHEETS Year Ended June 30, 1985 ASSETS CURRENT FUNDS: Unrestricted: General operating: Cash Accounts receivable Due from other fund groups $ 1,513,739 865,956 2,427,761 Total general operating Designated: Cash Accounts receivable Due from other fund groups Investments (Note 3) Inventories Total designated Auxiliary enterprises: Cash Accounts receivable Due from other fund groups Investments (Note 3) Inventories 4,807,456 123,928 277,278 609,871 225,255 503,479 1,739,811 421,493 68,362 16,944 1,561,081 460,056 Total auxiliary enterprises Total unrestricted 2,527,936 9,075,203 Restricted: Cash • Accounts receivable Due from other fund groups Investments (Note 3) Total restricted Total current funds 625,529 1,049,632 12,691 640,950 2,328,8"02 $11,404,005 STUDENT LOAN FUNDS: Cash Loans receivable - less allowance for bad debts $327,902 Accounts receivable 112,840 7,869,646 390 Total student loan funds See notes to financial statements 17 $ 7,982,876 LIABILITIES AND FUND BALANCES CURRENT FUNDS: Unrestricted: General operating: Accrued payroll Accounts payable and accrued liabilities Due to other fund groups Deposits Deferred revenue Compensated absences payable (Note 7) Fund balance (Note 1) Total general operating 2,536,107 740,126 931,499 40,957 487,322 3,278,410 (3,206,965) 4,807,456 Designated: Accrued payroll Accounts payable and accrued liabilities Due to other fund groups Compensated absences payable (Note 7) Fund balance (Note 1) Total designated 236,532 279,737 1,112,537 245,374 (134,369) 1,739,811 Auxiliary enterprises: Accrued payroll Accounts payable and accrued liabilities Deposits Deferred revenue Due to other fund groups Compensated absences payable (Note 7) Fund balance Total auxiliary enterprises Total unrestricted 255,633 166,249 248,506 41,514 247,461 301,313 1 ,267,260 2 ,527,936 9 ,075,203 Restricted : Accrued payroll Accounts payable and accrued liabilities Due to other fund groups Compensated absences payable (Note 7) Fund balance Total restricted 309,444 2,026 1,359,080 252,723 405,529 2,328,802 Total current funds STUDENT LOAN FUNDS: Accounts payable and accrued liabilities Fund balances: U.S. Government grants refundable University funds Private gifts $7,094,974 788,330 94,145 Total student loan funds $11,404,005 5,427 7,977,449 $ 7,982,876 18 MONTANA STATE UNIVERSITY BALANCE SHEETS Year Ended June 30, 1985 ASSETS ENDOWMENT FUNDS: Cash $ 13,789 Investments (Note 3) 560,095 Total endowment funds $ 573,884 PLANT FUNDS: Unexpended : Cash $ 242,272 Accounts receivable 406,864 Investments (Note 3) 11,322,330 Construction advances to state 140 ,848 Total unexpended 12,112,314 Renewals and replacements: Cash 27,527 Accounts receivable 2,566 Due from other fund groups 275,000 Investments (Note 3) 257,592 Total renewals and replacements 562 ,685 Retirement of indebtedness: Cash 138,023 Accounts receivable 135,518 Investments (Note 3) 4,653 ,623 Total retirement of indebtedness 4,927 , 164 Investment in plant: Land and land improvements 2,431,358 Buildings (including construction in progress) 81,600,562 Equipment 40,077,758 Livestock 62 ,075 Total investment in plant 124, 171 , 753 Total plant funds $141,773,916 AGENCY FUNDS: Cash $ 398,150 Accounts receivable 134,804 Due from other fund groups 626,939 Investments (Note 3) 428 ,595 Total agency funds $ 1,588,488 See notes to financial statements 19 LIABILITIES AXD FUND BALANCES ENDOWMENT FUNDS: Fund balance $ 573,884 Total endowment funds $ 573,884 PLANT FUNDS: Unexpended: Accounts payable and accrued expenditures $ 5,594 Due to other fund groups . 17,407 Bonds payable (Note 4) 10,396,328 Fund balance 1,692,985 Total unexpended 12,112,314 Renewals and replacements: Accounts payable and accrued expenditures 16,080 Due to other fund groups 26,132 Fund balance 520,473 Total renewals and replacements 562 ,685 Retirement of indebtedness: Due to other fund groups 103 Fund balance 4,927,061 Total retirement of indebtedness 4 ,927 , 164 Investment in plant: Bonds payable (Note 4) 17,633,672 Other payables 48,984 Net investment in plant 106,489,097 Total investment in plant 124 , 171 , 753 Total plant funds $141 ,773,916 AGENCY FUNDS: Accrued payroll $ 24,263 Accounts payable and accrued liabilities • 162,307 Compensated absences payable (Note 7) 2,288 Due to other fund groups 274,985 Deposits held in custody for others 1 , 124 ,645 Total agency funds $ 1,588,488 20 MONTANA STATE UNIVERSITY STATEMENT OF CHANGES IN FUND BALANCES Year Ended Jure 30, 1985 Current Funds Unrestricted General Auxiliary Operating Designated Enterprises Restricted Revenue and other additions : Current funds revenue $44,585,416 $ 6,232,697 $11,961,914 $11,172,679 Federal capital contribution - - - - University capital contribution - - - - Private capital contribution - - - - Interest on loans receivable - - Bond indenture proceeds (Note 5) - - - - Gain on bond defeasance (Note 5) - - - - Student fees - - - - Investment income Endowment income & grants (Note 2) - - - - Discount on bonds purchased - - _ _ Debt retirement (Note 5) - - - - Transfer of bond liability - - - - Expended for plant facilities (including $3,350,552 charged to current funds) - - - - Insurance proceeds - - - - State appropriations - - - - Other 2 I 1 1 Total revenue and other additions 44,585,416 6,232,697 11,961,914 11,172,679 Expenditures and other deductions: Current funds expenditures 44,634,354 6,807,600 10,429,787 11,099,975 Loan cancellations - - - - Refunded to grantors - - - - Administrative expenditures _ - - - Provision for bad debts - - - - Expended for plant facilities (Including $425,137 non-capital expenditures) - - - " Debt retirement (Note 5) _ - - - Interest on debt - - - - Transfer of bond liability - - - " Bond indenture debt (Note 5) _ _ - - Other (Note 5) 2 I 1 - Total expenditures and other deductions 44,634,354 6,807,600 10,429,787 11,099,975 See notes to financial statements 21 Loan Endowment and Funds Similar Funds Unexpended Plant Funds Renewals and Replacements Retirement of Indebtedness Investment In Plant 121,956 12,471 635 112,348 12,032 202,809 101,663 381,734 680,837 52,732 8,108,454 1,370,506 1,154,934 456,414 297,462 40,375 55,694 13,696 4,732,503 9,518,295 583 310,085 628,566 78,543 11,561 56,742 7,967,002 259,442 203,392 6,913,931 64,293 11,444,512 17,485,297 4,382,733 658,854 9,518,295 2,113,085 1,269,593 4,732,503 8,108,454 109,765 4,382,733 658,854 12,900,973 12,840,957 22 MONTANA STATE UNIVERSITY STATEMENT OF CHANGES IN FUND BALANCES (Continued) Year Ended June 30, 1985 Current Funds Unrestricted General Auxiliary Operating Designated Enterprises Restricted Transfer among funds - additions (deductions) : Mandatory: All fund groups $ - $ - $ (1,277,200) Voluntary: General operating (9,706) Designated - (48,784) Auxiliary enterprises-net - 29,345 (235,016) Repair and replacement-net - - Retirement of debt-net - - 100,776 Total transfers (9,706) (19,439) (1,411,440) See notes to financial statements 23 Net increase (decrease) in fund balance (58,644) (594,342) 120,687 72,704 Fund balances at beginning of year as previously reported (2,992,186)' 555,176 1,209,917 467,911 Adjustments: (Note 1 & 7) Prior year revenues (17,341) 20,547 (964) 9,329 Prior year expenditures (740) (96,453) (38,259) (67,835) Compensated absences payable (138,054) (8,351) (24,121) (7,417) Other - (10,946) 2 (69,163) Total adjustments (156,135) (95,203) (63,344) (135,086) Fund balances at beginning of year as adjusted (3,148,321) 459,973 1,146,573 332,825 Fund balances at end of year $(3,206,965) S (134,369) $ 1,267,260 $ 405,529 Plant Funds Loan Endowment and Renewals and Retirement of Investment Funds Similar Funds Unexpended Replacements Indebtedness in Plant $(1,782,900) $ - $ 3,060,100 $ 9,706 48,784 - 149 ,677 7 ^695 ,791 205,671 177,259 (177,259) 171,433 457,783 (729,992) (1,385,424) 486,195 2,339,814 203,392 1,145,774 (108,366) 883,353 4,644,340 370,492 585,463 647,579 4,043,968 101,290,337 131,491 - 91,356 - (260) 490 - (129,608) (18,740) 554,420 131,981 ^ (38,252) (18,740) (260) 554,420 7,827,772 370,492 547,211 628,839 4,043,708 101,844,757 $7,977,449 $ 573.884 $ 1,692,985 $ 520,473 $ 4,927,061 $106,489,097 24 MONTANA STATE UNIVERSITY STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES Year Ended June 30, 1985 Unrestricted Revenues : Tuition and fees Federal appropriations State appropriations Federal grants and contracts State grants and contracts Private gifts, grants and contracts Endowment income Other sources Sales and services Total revenue Expenditures and mandatory transfers: Education and general Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Scholarships and fellowships Other Education and general expenditures Designated and auxiliary enterprises: Expenditures Mandatory transfers Total designated and auxiliary Total expenditures and mandatory transfers Other transfers and additions (deductions): Excess of restricted receipts over transfers to revenue Transfers Net increase (decrease) in fund balance General Operating $ 8,703,238 50,000 34,097,964 856,158 70,300 225,608 441,402 140,746 44,585,416 24,940,895 577,274 9,955 5,754,897 4,087,884 3,463,924 4,943,870 855,655 44,634,354 44,634,354 (9,706) Designated 6,232,697 6,232,697 6,807,600 6,807,600 6,807,600 (19,439) $ (58,644) $ (594,342) See notes to financial statements 25 Auxiliary Enterprises Restricted Total 11,961,914 11,961,914 21,389 8,362,135 1,063,315 1,560,447 592 92,097 11,099,975 8,724,627 50,000 34,097,964 9,218,293 1,133,615 1,786,055 441,994 232,843 18,194,611 73,880,002 639,423 3,915,658 1,101,748 92,098 218,214 437,670 17,796 4,507,731 169,637 11,099,975 25,580,318 4,492,932 1,111,703 5,846,995 4,306,098 3,901,594 4,961,666 5,363,386 169,637 55,734,329 10,429,787 1,277,200 11,706,987 11,706,987 11,099,975 17,237,387 1,277,200 18,514,587 74,248,916 (134,240) 72,704 72,704 (163,385) 120,687 72,704 $ (459,595) 26 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1985 1 . Summary of significant accounting policies Related parties: Montana State University, Montana Agricultural Experiment Station and Montana Cooperative Extension Service are related through common management and control; however, they are separate and distinct agencies and they receive separate federal and state appropriations. These agencies have certain related-party transactions, including sharing office facilities, management, accounting and office ser- vices. The accounts of Montana Agricultural Experiment Station and Montana Cooperative Extension Service have not been included in the accompanying financial statements. Financial Statements: The accompanying financial statements have been prepared on the ac- crual basis in accordance with generally accepted accounting princi- ples for colleges and universities except as noted hereafter. The statement of current funds revenues, expenditures and other changes is a statement of financial activities of current funds related to the current reporting period and does not purport to present the re- sults of operations or the net income or loss for the period. Fund balance for unrestricted general operating funds includes $50,925 allocated for encumbrances and $20,520 prior period revenue overage netted to the unfunded liability of $3,278,410 for compen- sated absences payable. Fund balance for unrestricted designated funds includes positive fund balances of $111,005 netted to the unfunded liability of $245,374 for compensated absences payable. Per recommendation of the Legislative Auditor's Office and concur- rence by the Financial Aid Office at the University, $69,163 of restricted current funds scholarship were reclassified to agency funds because the awards recipients are selected by parties outside the institution. Fund accounting: The accounts of the University are maintained in accordance with the principles of fund accounting wherein resources are classified for accounting purposes into funds that are identified by the limita- tions and restrictions placed upon their use. Separate accounts are maintained for each fund; however, accounts with common characteris- tics are combined into fund groups and reflected as such in the accompanying financial statements. The common characteristics of the funds contained in the various fund groups are as follows: Current funds : The current funds group includes economic resources expendable in performing the primary objectives of the University, i.e., 27 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1985 1. Summary of significant accounting policies (continued) Fund accounting (continued) : Current funds (continued) : Instruction, Research and Public Service. The current funds group has two basic distinct sub-groups; unrestricted funds which have no expenditure restrictions, and restricted funds which have expenditure restrictions. Unrestricted current funds are comprised of the following: General Operating - utilized for general operations in performing the primary objectives of the University. Designated - utilized for educational related service activities; these funds are separately classified in order to acciunulate and distinguish the costs of these special- ized service or function areas. Auxiliary Enterprises - utilized in providing essential on- campus services primarily to students, faculty, and staff. Student loan funds: The resources from this group of funds are available to stu- dents to aid in financing their education. Funds for the loans are provided by private and University sources with the major- ity of the funds being provided by the Federal Government. Endowment funds : Endowment funds are funds with specific restrictions negating the expenditure of the principal. Generally, the principal is to be maintained in perpetuity and invested for the purpose of producing income. Plant funds : Plant funds are separated into four distinct self-balancing sub-group accounts: Unexpended plant - utilized for acquisition of long-term institutional assets. Renewal and replacement - utilized for long-term institu- tional asset maintenance. Retirement of indebtedness - utilized for interest and debt retirement. Investment in plant - denotes the cost of long-term in- stitutional assets and related liabilities. 28 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1985 Summary of significant accounting policies (continued) Inventories: Inventories, which consist mainly of food and operating supplies, are valued at cost (first-in, first-out method). Investments : Investments are carried at cost, which approximate market value at June 30, 1985. Plant and equipment: At June 30, 1985, investment in plant was adjusted $554,420 to reflect the totals in the property control subsidiaries. Livestock is carried at current market value with any difference from the prior year values recorded in the plant fund. Depreciation: No provision has been made for depreciation of plant facilities in accordance with generally accepted accounting principles for col- leges and universities. Allowance for Bad Debts: Except for Loan Funds, an allowance for bad debts has not been recorded. Losses from bad debts in other funds are recorded as adjustments to revenue in the year in which they are deemed uncol- lectable. Allocated for encumbrances: The University records encumbrances of general operating funds as expenditures in conformance with the Statewide Budgeting and Account- ing System. At June 30, 1985, the University had encumbered $50,925 of general operating funds that are not included in expenditures in the accom- panying financial statements. The accrual basis of accounting provides that expenditures include only amounts associated with goods and services received and that liabilities include only the unpaid amounts associated with such transactions. Unearned tuition and fees: Summer school tuition and fee revenues are deferred at June 30 and recorded as revenue in the succeeding fiscal year. 29 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1985 2. Endowment funds - land grants Montana State University benefits from two separate land grants. The first granted 90,000 acres for the University under provisions of the Morrill Act of 1862 and the second, under the Enabling Act of 1889, granted an additional 50,000 acres for the University. Under provisions of both grants, income from the sale of land and land assets must be reinvested and constitutes, along with the bal- ance of the unsold land, a perpetual endowment fund. The State of Montana, State Land Board administers both grants and holds all assets . Investment income from the first grant may be used for current operations of the University and is reported as current unrestricted funds revenue. Investment income from the second grant is currently pledged to the retirement of the December 1, 1984 - Series 1984 Indenture revenue bonds and is reported as revenue in the retirement of indebtedness fund. 3. Investments Investments at June 30, 1985 consist of the following: Cost State of Montana short-term investment pool $ 3,833,712 U.S. Treasury securities, held by trustees 15,366,712 Federal securities 449 ,097 $ 19,649,521 The investments at June 30, 1985 are owned by the following funds : Current funds : Designated $ 225,255 Auxiliary enterprises 1,561,081 Restricted 640,950 Endowment funds 560,095 Plant funds : Unexpended plant 11,322,330 Renewals and replacements 257,592 Retirement of indebtedness 4,653,623 Agency 428,595 $19,649,521 30 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1985 Boads payable Bonds payable at June 30, 1985 include the following: Indenture - December 1, 1984 - Series 1984 $ 8,850,000 Indenture - December 1, 1984 - Series B 1984 9,920,000 Indenture - December 15, 1984 - Series 1984 9 ,260,000 $28,030,000 The records and accounts of the University's revenue bonds are subject to an annual audit by a certified public accounting firm; copies of the report which provides complete descriptive details of each indenture are available upon request. Bonds defeased, issued, and escrowed: Defeasance of October 14, 1963 and April 12, 1971 Resolutions: All bonds outstanding under the October 14, 1963 and April 12, 1971 Resolutions totaling $3,965,000 were defeased when funds from the sale of bonds issued under the December 15, 1984 Indenture, along with funds on hand were deposited in an irrevocable escrow account. This resulted in a gain. Obligations of the United States Government, calculated to be sufficient to provide for the payment of principal and interest on the October 14, 1963 and April 12, 1971 refunded bonds as they become due, were purchased and are held by the Escrow Agent. Other retirement of indebtedness deductions include $1,246,000 to defease the October 14, 1963 and April 12, 1971 Resolutions and issue the December 1, 1984 Series B and December 15, 1984 Indentures. Issuance of December 1, 1984 Indenture Series B 1984: An original issue of $9,920,000 dated December 1, 1984 consisting of fully registered bonds without coupons for the construction reno- vation, improvement, furnishing, and equipping of new and existing Student Housing System Facilities at and for the University. Issuance of December 15, 1984 Indenture: An original issue of $9,260,000 dated December 15, 1984, consisting of fully registered bonds without coupons to defease all bonds out- standing under the October 14, 1963 and April 12, 1971 Resolutions, to escrow certain General Obligation Bonds under the responsibility of the University, and to finance the construction renovation, im- provement, and equipping of certain Health and Physical Education Facilities at and for the University. Escrowed General Obligation Bonds: General Obligation Refunding Bonds, Series 1983A, dated August 1, 1983, in the amount of $4,945,000 were placed in escrow by utilizing the proceeds of the December 15, 1985 Indenture - Series 1984. 31 MO^rrANA state university NOTES TO FINANCIAL STATEMENTS June 30, 1985 6 . Retirement plans All of the University's full-time employees are members of the Montana Public Employees Retirement System or Montana Teacher's Retirement System. The University's contributions to these plans, which were determined to be actuarially sound by the most recent biennial valuations, totaled $2,591,631 for the year ended June 30, 1985. 7 . Commitments and contingencies Compensated absences payable: As of December 31 of each year, employees can accumulate vacation leave up to twice the number of leave days earned annually and sick leave can be accumulated without limitation. Upon termination, the employee is paid the accumulated vacation leave and 25% of the accumulated sick leave. Vacation and sick leave payments are recorded as an expenditure at the time they are paid to the employee. Due to system limitations, the change in the compensated absences payable amount is stated as an adjustment and not identified with the fiscal period earned or utilized by the employee. Capital projects: As of June 30, 1985, the University has initiated construction on the following major capital projects: Amount .Amount Exp . Project Authorized as of 6/30/85 Student union bldg. addition/renovation $ 5,394,400 $ 5,362,318 Physical education facilities addition 2,500,000 2,475,294 University apartments '84 4,200,000 3,073,272 Animal lab facility 2,260,000 2,171,901 Visual communications building 4,598,000 4,589,911 On campus living - fire detection 620,000 568,710 Controlled environmental facility 5,302,000 612,693 Engineering/physical science complex 350,000 171,663 Hedges food system exhaust 197,736 151,974 1984B On Campus Living Construction 8,137,100 10,150 1984 P.E. Indenture Construction 1,400,000 8,896 $34,959,236 $19,196,782 Leases : The University reserves the right to limit the amount of expenditures associated with lease contracts without penalty, when in the sole judgment of the University annual funding or program changes necessi- tate. Capital lease agreements for various purposes and time periods totaling $104,893 at June 30, 1985 are not added to net investment in plant and not deemed to be material to the overall consolidated financial position of the University. 32 MONTANA STATE UNIVERSITY BALANCE SHEETS Year Ended June 30, 1984 ASSETS CURRENT FUNDS: Unrestricted: General operating: Cash Accounts receivable Due from other fund groups $ 3,337,958 727,650 1,455,327 Total general operating Designated: Cash Accounts receivable Due from other fund groups Investments (Note 3) Inventories Total designated Auxiliary enterprises: Cash Accounts receivable Due from other fund groups Investments (Note 3) Inventories 5.520,935 105,250 243,936 995,232 296,071 522,160 2,162,649 328,551 47,473 179,934 1,378,098 533,037 Total auxiliary enterprises Total unrestricted 2,467,093 10,150,677 Restricted: Cash Accounts receivable Due from other fund groups Investments (Note 3) Total restricted Total current funds 314,049 1,164,314 18,449 459,764 1,956,57"6 $12,107,253 STUDExNT LOAN FUNDS: Cash Loans receivable - less allowance for bad debts $314,206 Accounts receivable Due from other fund groups Total student loan funds See notes to financial statements 33 $ 71,048 7,540,951 87,887 180 $ 7,70Q,06"6 ■ LIABILITIES ANT) FUND BALANCES CURRENT FUNDS: Unrestricted: General operating: Accrued payroll $ 2,712,143 Accounts payable and accrued liabilities 750,374 Due to other fund groups 1,356,223 Deposits 43,112 Deferred revenue 510,913 Compensated absences payable (Note 7) 3,140,356 Fund balance (Note 1) (2,992,186) Total general operating 5,520,935 Designated: Accrued payroll 221,994 Accounts payable and accrued liabilities 377,656 Due to other fund groups 781,746 Compensated absences payable (Note 7) 226,077 Fund balance 555 , 176 Total designated 2,162,649 Auxiliary enterprises: Accrued payroll 264,399 Accounts payable and accrued liabilities 89,772 Deposits 306,352 Deferred revenue 59,459 Due to other fund groups 260,002 Compensated absences payable (Note 7) 277,192 Fund balance - 1,209,917 Total auxiliary enterprises 2,467 ,093 Total unrestricted 10,150,677 Restricted: Accrued payroll 230,893 Accounts payable and accrued liabilities 74,613 Due to other fund groups 937,853 Compensated absences payable (Note 7) 245,306 Fund balance 467 ,911 Total restricted 1,956,576 Total current funds $12,107,253 STUDENT LOAN FUNDS: Accounts payable and accrued liabilities $ 4,275 Fund balances: U.S. Government grants refundable $6,845,403 University funds 760,600 Private gifts 89,788 7,695,791 Total student loan funds $ 7,700,066 34 MONTANA STATE UNIVERSITY BALANCE SHEETS Year Ended June 30, 1984 ASSETS ENDOWMENT FUNDS: Cash $ 3,189 Investments (Note 3) 367,303 Total endowment funds $ 370,492 See notes to financial statements 35 PLANT FUNDS: Unexpended : Cash $ 421,361 Accounts receivable 129,922 Due from other fund groups 4,918 Investments (Note 3) 3,905,217 Construction advances to state 201 ,209 Total unexpended 4,662,627 Renewals and replacements: Cash 144,413 Accounts receivable 27,472 Investments (Note 3) 493,402 Total renewals and replacements 665 ,287 Retirement of indebtedness: Cash 614,846 Accounts receivable 84,-376 Investments (Note 3) 3,349,054 Total retirement of indebtedness 4,048,276 Investment in plant: Land and land improvements 2,394,226 Buildings (including construction in progress) 76,373,148 Equipment 36,857,556 Livestock 25 ,400 Total investment in plant 115 ,650 ,330 Total plant funds $125,026,520 AGENCY FUNDS: Cash $ 225,770 Accounts receivable 135,709 Due from other fund groups 716,562 Investments (Note 3) 412,315 Total agency funds $ 1,490,356 LIABILITIES AND FUND BALANCES ENDOWMENT FUNDS: Fund balance $ 370,492 Total endowment funds PLANT FUNDS: Unexpended : Accounts payable and accrued expenditures Due to other fund groups Bonds payable (Note 4) Fund balance Total unexpended Renewals and replacements : Due to other fund groups Fund balance Total renewals and replacements Retirement of indebtedness: Due to other fund groups Fund balance Total retirement of indebtedness Investment in plant: Bonds payable (Note 4) Other payables Net investment in plant Total investment in plant Total plant funds AGENCY FUNDS: Accrued payroll Accounts payable and accrued liabilities Compensated absences payable (Note 7) Deposits held in custody for others Total agency funds 370,492 7,118 12,760 4,057,286 585,463 4,662,627 17,708 647,579 665,287 4,308 4,043,968 4,048,276 14,302,714 57,279 101,290,337 115,650,330 $125,026,520 $ 14,507 591,955 11,765 872,129 $ 1,490,356 36 MONTANA STATE UNIVERSITY STATEMENT OF CHANGES IN FUND BALANCES Year Ended June 30, 1984 Current Funds Unrestricted General Auxiliary Operating Designated Enterprises Restricted Revenue and other additions: Current funds revenue Federal capital contribution University capital contribution Private capital contribution Interest on loans receivable Bond indenture proceeds (Note 5) Gain on bond defeasance (Note 5) Student fees Investment income Endowment income & grants (Note 2) Discount on bonds purchased Debt retirement (incl. defeasance) Transfer of bond liability Expended for plant facilities (including $3,425,097 charged to current funds) G.O. bond refunding (Note 5) State appropriations Other Total revenue and other additions Expenditures and other deductions: Current funds expenditures Loan cancellations Refunded to grantors Administrative expenditures Provision for bad debts Expended for plant facilities (Including $817,706 non-capital expenditures) Debt retirement (incl. defeasance) Interest on debt Transfer of bond liability Bond indenture debt (Note 5) Other (Note 5) Total expenditures and other deductions $43,288,774 $ 6,248,194 $11,931,510 $10,783,571 43.288,774 6,248,194 11,931,510 10,783,571 43,358,513 6,494,516 10,050,700 10,516,676 43,358,513 6,494,516 10,050,700 10,516,676 See notes to financial statements 37 Endowment and Similar Funds Plant Funds Loan Funds Unexpended Renewals and Replacements Retirement of Indebtedness Investment In Plant 164,443 31,082 $ $ $ $ 1 1 1 ■to- 118,122 80,100 70,000 - - - - 4,800,000 - - - - - 3,426,240 - - - 371,587 - 1,537,246 - - - 36,760 15,105 669,030 - - - - - 491,478 - - - - - 138,346 - - - - - - 12,449,392 - - 142,714 ~ " ~ . . ^ ^ 6,370,834 - - - - - 1,150,000 - - 1,843,267 - - - 1,725 81,825 171,815 2,636,143 7,148 22,253 48,543 11,110,883 - 313,647 19,970,226 1 69,649 - - - - - 968 - - - ■ - 53,653 - - - - - 20,838 - - - - - 3,238,764 524,679 12,449,392 1,068,936 581,993 142,714 4,800,000 145,108 2 3,238,764 524,679 14,100,321 4,942,714 38 MONTANA STATE UNIVERSITY STATEMENT OF CHANGES IN FUND BALANCES (Continued) Year Ended June 30, 1984 Current Funds Unrestricted General Auxiliary Operating Designated Enterprises Restricted Transfer among funds - additions (deductions) : Mandatory: All fund groups $ -$ -$ -$- Voluntary: General operating (10,093) Auxiliary enterprises-net - 21,611 (2,970,462) Repair and replacement - - - - Retirement of debt-net ____^ 2 I I 1 Total transfers (10,093) 21,611 (2,970,462) 2 See notes to financial statements 39 Net increase (decrease) in fund balance (79,832) (224,711) (1,089,652) 266,895 Fund balances at beginning of year as previously reported 354,257 989,583 2,621,652 681,124 Adjustments: (Note 1 Se 7) Prior year revenues 24,722 10,834 243 (75,116) Prior year expenditures (150,977) 5,547 (45,134) (154,686) Compensated absences payable (3,140,356) (226,077) (277,192) (245,306) Other 2 2 I (5,000) Total adjustments (3,266,611) (209,696) (322,083) (480,108) Fund balances at beginning of year as adjusted (2,912,354) 779,887 2,299,569 201,016 Fund balances at end of year $(2,992,186) $ 555,176 $ 1,209,917 $ 467,911 Plant Funds Loan Endowment and Renewals and Retirement of Investment Funds Similar Funds Unexpended Replacements Indebtedness in Plant 10,093 22,639 521,664 2,404,548 178,867 (178,867) 196,236 557,691 (753,927) 397,742 900,488 1,660,714 168,539 81,825 (204,879) 398,062 (1,328,724) 15,027,512 7,527,252 290,828 3,171,241 254,773 4,995,492 85,712,043 (2,161) (2,375,122) (50) 377,700 (5,777) (5,206) (500) -_ - -_ -_ -_ 550,782 -_ (2,16T) (2,380,899) (5,256) 377,200 550,782 7,527,252 288,667 790,342 249,517 5,372,692 86,262,825 $7,695,791 $ 370,492 $ 585,463 $ 647,579 $ 4,043,968 $101,290,337 40 MONTANA STATE UNIVERSITY STATEMENT OE CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES Year Ended June 30, 1984 Unrestricted General Operating Designated Revenues : Tuition and fees Federal appropriations State appropriations Federal grants and contracts State grants and contracts Private gifts , grants and contracts Endowment income Other sources Sales and services Total revenue $ 8,386,014 50,000 33,176,752 789,746 56,781 239,795 421,240 168,446 43,288,774 6,248,194 6,248,194 Expenditures and mandatory transfers: Education and general Instruction Research Public service Academic support Student services Institutional support Operation and maintenance of plant Scholarships and fellowships Other Education and general expenditures Designated and auxiliary enterprises: Expenditures Mandatory transfers Total designated and auxiliary Total expenditures and mandatory transfers Other transfers and additions (deductions): Excess of restricted receipts over transfers to revenue Transfers Net increase (decrease) in fund balance 24,600,899 577,255 9,637 5,490,831 3,918,496 3,316,390 4,702,712 742,293 43,358,513 43,358,513 (10,093) 6,494,516 6,494,516 6,494,516 21,611 $ (79,832) $ (224,711) See notes to financial statements 41 Auxiliary Enterprises Restricted Total 11,931,510 11,931,510 33,583 7,825,341 776,025 1,798,989 3,504 79,234 10,516,676 8,419,597 50,000 33,176,752 8,615,087 832,806 2,038,784 424,744 247,680 18,179,704 71,985,154 767,280 3,496,956 717,563 74,418 450,294 647,931 8,829 4,237,729 115,676 10,516,676 25,368,179 4,074,211 727,200 5,565,249 4,368,790 3,964,321 4,711,541 4,980,022 115,676 53,875,189 10,050,700 10,050,700" 10,050,700 10,516,676 16,545,216 16,545,216 70,420,405 (2,970,462) $ (1,089,652) 266,895 $ 266,895 266,895 (2,958,944) $ (1,127,300) 42 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1984 1 . Summary of significant accounting policies Related parties: Montana State University, Montana Agricultural Experiment Station and Montana Cooperative Extension Service are related through conunon management and control; however, they are separate and distinct agencies and they receive separate federal and state appropriations. These agencies have certain related-party transactions, including sharing office facilities, management, accounting and office ser- vices. The accounts of Montana Agricultural Experiment Station and Montana Cooperative Extension Service have not been included in the accompanying financial statements. Financial Statements: The accompanying financial statements have been prepared on the ac- crual basis in accordance with generally accepted accounting princi- ples for colleges and universities except as noted hereafter. The statement of current funds revenues, expenditures and other changes is a statement of financial activities of current funds re- lated to the current reporting period and does not purport to pre- sent the results of operations or the net income or loss for the period. Fund balance for unrestricted general operating funds includes $140,806 allocated for encumbrances and $7,364 prior period revenue overage netted to the unfunded liability of $3,140,356 for compen- sated absences payable. Fund accounting: The accounts of the University are maintained in accordance with the principles of fund accounting wherein resources are classified for accounting purposes into funds that are identified by the limita- tions and restrictions placed upon their use. Separate accounts are maintained for each fund; however, accounts with common characteris- tics are combined into fund groups and reflected as such in the accompanying financial statements. The common characteristics of the funds contained in the various fund groups are as follows: Current funds : The current funds group includes economic resources expendable in performing the primary objectives of the University, i.e., Instruction, Research and Public Service. The current funds group has two basic distinct sub-groups; unrestricted funds which have no expenditure restrictions, and restricted funds which have expenditure restrictions. Unrestricted current funds are comprised of the following: 43 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1984 1. Summary of significant accounting policies (continued) Fund accounting (continued): Current funds (continued): General Operating - utilized for general operations in performing the primary objectives of the University. Designated - utilized for educational related service activities; these funds are separately classified in order to accumulate and distinguish the costs of these special- ized service or function areas. Auxiliary Enterprises - utilized in providing essential on-campus services primarily to students, faculty, and staff. Student loan funds: The resources from this group of funds are available to stu- dents to aid in financing their education. Funds for the loans are provided by private and University sources with the major- ity of the funds being provided by the Federal Government. Endowment funds: Endowment funds are funds with specific restrictions negating the expenditure of the principal. Generally, the principal is to be maintained in perpetuity and invested for the purpose of producing income. Plant funds: Plant funds are separated into four distinct self-balancing sub-group accounts: Unexpended plant - utilized for acquisition of long-term institutional assets. Renewal and replacement - utilized for long-term institu- tional asset maintenance. Retirement of indebtedness - utilized for interest and debt retirement. Investment in plant - denotes the cost of long-term in- stitutional assets and related liabilities. 44 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1984 1. Summary of significant accounting policies (continued) Inventories : Inventories, which consist mainly of food and operating supplies, are valued at cost (first-in, first-out method). Investments: Investments are carried at cost, which approximate market value at June 30, 1984. Plant and equipment: At June 30, 1984, investment in plant was adjusted $550,782 to reflect the totals in the property control subsidiaries. Livestock is carried at current market value with any difference from the prior year values recorded in the plant fund. Depreciation: No provision has been made for depreciation of plant facilities in accordance with generally accepted accounting principles for col- leges and universities. Allowance for Bad Debts: Except for Loan Funds, an allowance for bad debts has not been recorded. Losses from bad debts in other funds are recorded as adjustments to revenue in the year in which they are deemed uncol- lectable. Allocated for encumbrances: The University records encumbrances of general operating funds as expenditures in conformance with the Statewide Budgeting and Account- ing System. At June 30, 1984, the University had encumbered $140,806 of general operating funds that are not included in expenditures in the accom- panying financial statements. The accrual basis of accounting provides that expenditures include only amounts associated with goods and services received and that liabilities include only the unpaid amounts associated with such transactions. Unearned tuition and fees: Summer school tuition and fee revenues are deferred at June 30 and recorded as revenue in the succeeding fiscal year. 45 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1984 Eadowment funds - land grants Montana State University benefits from two separate land grants. The first granted 90,000 acres for the University under provisions of the Morrill Act of 1862 and the second, under the Enabling Act of 1889, granted an additional 50,000 acres for the University. Under provisions of both grants, income from the sale of land and land assets must be reinvested and constitutes, along with the bal- ance of the unsold land, a perpetual endowment fund. The State of Montana, State Land Board administers both grants and holds all assets. Investment income from the first grant may be used for current operations of the University and is reported as current unrestricted funds revenue. Investment income from the second grant is currently pledged to the retirement of the April 15, 1984 indenture revenue bonds and is reported as revenue in the retirement of indebtedness fund. Investments Investments at June 30, 1984 consist of the following: Cost State of Montana short-term investment pool $ 3,994,157 U.S. Treasury securities, held by trustees 6,317,059 Federal securities 350,008 $10,661,224 The investments at June 30, 1984 are owned by the following funds : Current funds: Designated $ 296,071 Auxiliary enterprises 1,378,098 Restricted 459,764 Endowment funds 367,303 Plant funds: Unexpended plant 3,905,217 Renewals and replacements 493,402 Retirement of indebtedness 3,349,054 Agency 412,315 $10,661,224 46 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1984 4. Bonds payable Bonds payable at June 30, 1984 include the following: Resolution - October 14, 1963 $ 2,715,000 Resolution - April 12, 1971 1,445,000 Montana Long Range Building Program - March 1, 1980 5,200,000 Indenture - April 15, 1984 9,000,000 $18,360,000 The records and accounts of the University's revenue bonds are subject to an annual audit by a certified public accounting firm; copies of the report are available upon request. 5. Bond defeasance, issuance, and refunding: Defeasance of July 1, 1954 Indenture: All bonds outstanding, $11 ,069 ,000, under the July 1, 1954 Inden- ture were defeased when funds, $4,800,000, from the sale of bonds issued under the April 15, 1984 Indenture, along with funds on hand, $2,842,760, were deposited in an irrevocable escrow account resulting in a gain on defeasance of $3,426,240. Obligations of the United States Government, calculated to be sufficient to provide for the payment of principal and interest on the July 1, 1954 refunded Bonds as they became due, were purchased and are held by the Escrow Agent. Other retirement of indebtedness deductions include $556,930 to defease the July 1, 1954 Indenture and issue the April 15, 1984 Indenture. Issuance of April 15, 1984 Indenture: An original issue of $9,000,000, consisting of fully registered bonds without coupons; $4,800,000 with the purpose of defeasing all bonds outstanding under the July 1, 1954 Indenture and $4,200,000 for con- struction of approximately 90 additional units of married student housing. G.O. Bond refunding: Outstanding general obligation long range building program bonds, Series 1980, dated March 1, 1980, issued by the State of Montana in the amount of $6,350,000 for the construction of additions to the Physical Education Complex and Student Union Building at Montana State University, were refunded by issuance of general obligation refunding bonds. Series 1983A, dated August 1, 1983, in the amount of $5,200,000; resulting in a $1,150,000 lowering of the debt level associated with Investment in Plant. 47 MONTANA STATE UNIVERSITY NOTES TO FINANCIAL STATEMENTS June 30, 1984 Retirement plans All of the University's full-time employees are members of the Montana Public Employees Retirement System or Montana Teacher's Retirement System. The University's contributions to these plans, which were determined to be actuarially sound by the most recent biennial valuations, totaled $2,471,762 for the year ended June 30, 1984. Commitments and contingencies Compensated absences payable: As of December 31 of each year, employees can accumulate vacation leave up to twice the number of leave days earned annually and sick leave can be accumulated without limitation. Upon termination, the employee is paid the accumulated vacation leave and 25% of the accumulated sick leave. Vacation and sick leave payments are recorded as an expenditure at the time they are paid to the employee. Previous financial reports have disclosed the leave liability only as a footnote. In accordance with generally accepted accounting principles the liability as of June 30, 1984 has been recorded for the first time as a liability of the applicable fund group. Capital projects: As of June 30, 1984, the University has initiated construction on the following major capital projects: Amount Amount Exp . Project Authorized as of 6/30/84 Student union bldg. addition/ renovation Physical education facilities addition University apartments '84 Animal lab facility Visual communications building On campus living - fire detection Controlled environmental facility Engineering/physical science complex Hedges food system exhaust $ 5,360,400 2,500,000 4,200,000 2,260,000 4,598,000 620,000 5,302,000 350,000 100,000 $ 5,320,586 2,419,904 142,714 2,006,193 4,529,999 496,779 152,269 67,487 76,712 $25,290,400 $15,212,643 Leases : The University reserves the right to limit the amount of expenditures associated with lease contracts without penalty, when in the sole judgment of the University annual funding or program changes necessi- tate. Capital lease agreements for various purposes and time periods totaling $30,193 at June 30, 1984 are not added to net investment in plant and not deemed to be material to the overall consolidated financial position of the University. 48 MONTANA STATE UNIVERSITY SCHEDULE OF GRANT EXPENDITURES AND DISBURSEMENTS FISCAL YEAR ENDED JUNE 30, 1985 Expenditures Contract Number and Disbursements FEDERAL GRANTS Department of Education G008402119 $ 148,023 G008302783 32,035 G008401682 161,130 G008440245 5,806 G008302783 62,653 00750V1058 8,859 Altans 9,353 G00831153 852 G008004366 3,871 G008101025 43,150 Pell 3,799,391 College Work Study 673,952 NDSL Disbursements 1,214,552 Administrative and Collection Costs 15,057 SEOG 266.956 Department of Interior IPA $ 5,417 141600091516#8 28,764 CX-1200-2-B035 61 PX157032107 ' 1,964 MT950-CTZ-9 2,993 141600091516#7 24,572 14-10-2-920-13 263 14-06-600-614A 2,598 14-16-0006-84-92 3,061 CX-1200-4-A038 8,448 14 16 0009 1516 4,825 Picton 3,485 1416000685912 2,552 CX 1200 5 A051 266 14-16-0009-1516 _ 2,460 Beattie ' 291 C50-C-1420-5591 34,267 49 Expenditures Contract Number and Disbursements Health and Human Services 5R23NS17974-123 $ 28,069 7R01CA39611-01 51,925 90AD0012/01 24,522 1R01AM3351001 65,231 1R01GM3182401 57,362 2507RRO710OO6 32,540 5R01AI1794803 11,565 2503RR0309104 3,368 2A11NU00239-09 11,595 5R01GM3182403 18,210 1R01CA35905-01 74,775 12 23 ESO3254-01 30,453 5K04ES00063-3&4 11,970 1D10NU2807801 28,724 5R23-ES03254-02 18,304 2507RRD7100-07 9,045 1P40RR0224901 131,169 1R01HD1744401 7,903 5R01HD1744402 48,874 2ALL NU-00239-08 667 APH0031501 52,649 1 R01AI19089-01 76,526 5R01 ES02995-02 6,489 5G08LM03668-03 6,462 5K04AI00367123 37,653 5R01ES02995-03 70,002 1 506 RR08218-01 29,242 MIN Biomed Res ' 147,617 1506RR0821082 31,979 1506RR0821802 78,917 Nursing Loan Disbursements Collection Costs 87 ,084 Department of Agriculture 12-14-5001-42 $ 165,219 58-9AHZ-3-42 150,136 58-32U4-3-631 40,276 22-C-4-INT-70 5,299 Nielsen 2,750 22-C-3-INT-67 7,838 EED12170981712 5,616 Rust 22,820 22-C-2-INT-65 5,071 PNW-83-318 21,682 28-C2-204 11,190 58-9AHZ-2-687 5,424 50 Expenditures Contract Number and Disbursements Department of Agriculture (cont.) 53-D398-3DE-3 $ 30,734 58-0401-4-00026 I9 953 22-C-3-INT-66 3 '353 22-C-3-INT-064 348 82CRSR21077 18 322 USDA 5C5 5*499 usDA ilioe 22-C-4-INT-68 39 932 7059230112 2*483 83CR5R2-2319 18*730 84 CR5R 22359 '270 53-0385-3-2685 24 554 530343400795 ' 4'897 530343300682 12*627 PX12002G015 3*788 BARDUS33580 4,'593 22-C-4-INT-69 '592 58519B11110 2 628 22-C-2-OMT 63 '424 58-32R6-3-202 2,622 58-9AHZ-3-724 3 [549 USDA SEA 4*884 84 CRCR 1 1481 33^024 82 CRSR 2 1006 82^169 579020261002A 13^849 USDA 22^937 USDA 12, '339 USDA - 8*878 USDA 9,279 USDA 71474 Sea Formula 84 36,034 Sea Formula 85 52,109 12-05-300-663 5.' 100 12-05-300-664 15^923 EFFM-1-6009 30,*252 12-05-300-0699 '559 12-05-300-567 5,244 EIPM-1-7022 4*093 12-05-300-A39 '498 Smith-Lever 2,014,378 Extension 408,628 Hatch 1,172,944 Regional 584,296 51 Expenditures Contract Number and Disbursements Department of Defense N00014 84 K 0309 N0001484K0118 DAAG29-82-K-1027 AFOSR 80-0267 DAAG29 84 G 0032 Department of Energy DEAC6581WP15430 5-11-DO-0116 DEAP1881FC23116 DEAT0780ID1281 4-BOOl-C National Aeronautics and Space Administration NAG-9-68 NAS 9 17346 NAS-9-16007 National Science Foundation SPE-8320677 CHE 8308398 CPE 8404337 CPE 8404063 CEE 8318476 INT 8414939 PCM 8410144 DMR-830946 INT 8211113 ATM843143 DMR 8401196 B5R 8506602 CHE 8119857 CPE 8200112 518 Priscu DMR 8205280 EAR 8305173 PRM 8215000 BSR 8315279 BSR 8500849 BNS 8408061 PCM 8208393 DMR 8403993 ATM 8209836 DMR 8205581 CPE 8401335 ■CBT 8305152 BSN 8308209 PRM 8011449 FY 81 Monts Monts 52 $ 122, ,097 68, ,720 15, ,328 25, ,987 124, ,000 $ 17, ,891 58, ,572 227 10, ,487 8, .154 $ 15, ,008 3, ,797 217 $ 7, ,533 19, ,394 10, ,709 241 19, ,755 500 71, ,714 348, ,351 4, ,834 45, ,411 51: ,258 605 80, ,786 9, ,265 2, ,043 36. ,020 63, ,282 18, ,576 29, ,222 1 12 ,684 69, ,805 45, ,456 27, ,863 160, ,426 23, ,259 37, ,075 22. ,574 57, ,780 121, .121 25, ,814 Expenditures Contract Number and Disbursements Other Federal Chapter 36, Title 38 5BA-1791-PMA-74 PO1401505 294 Stover PO HO 100408-10 U of C WRPIAP 85 598AHZ2677CIMMY 84-130 PO4100650-10 DEFG2282PC50787 106-06 83-ABC-00095 RTAP 008 NCAA 84 ABC00173 CA20604 106-05 186-83-3019 PO100614-10 TVA 1131-130 TVA 1141-131 lA 21198 19 G IC40309 84 PO 6014 9 5 IG-40645-84 PO-4100607-10 DACW4584M1357 NCA2-1R470-401 DEAI7985BP22256 4 BADNF5 1332 DAN1318A00404500 AID/D5ANXIIG0161 TV-39645A Pesticides W.R.R.C Peavy 83/84/WRRC 14-08-0001-G917 14 08 0001 6 102 Environmental Protection Agency X1149NNEX U912138 01 0 CR811334-01 CR811334 02 CR80724004 CR81001502 CR0810955-01 CR811958 01-0 TOTAL FEDERAL GRANTS 53 $ 8, ,490 6: ,360 14 h, ,113 Z, ,355 5, ,192 6 L987 2.. ,562 14. ,041 60; ,850 7 , ,857 122: ,060 13: ,408 1; ,312 32, ,932 8, ,798 2.. ,322 9, ,177 1, ,477 30: ,004 6: ,095 1, ,451 50: ,200 4: ,219 54 15: ,462 100 600 283: ,539 72: ,671 2: ,530 16: ,630 $ 390 46, ,070 99: ,729 4: ,192 $ 1: ,255 2: ,576 128: ,380 33: ,344 23: ,605 75, ,094 14: ,585 145 ,655 $16,291: ,669 Expenditures Contract Number and Disbursements STATE GRANTS Department of Agriculture ST DEPT AG Bahn $ 5,320 Harris 2,238 84 MWRMC 28,706 85 MWRMC 450,092 86 MWRMC 1.188 Department of Commerce 0229 $ 8,218 85-02 11,251 Montana Dept. Commerce 59,046 McKinsey 6,650 Department of Health DHF540335 12056 $ 10,902 Department of Highways Jennings $ 119,606 Hyyppa 14,993 Gould 8,783 Department of Natural Resources and Conservation $ ED-MSU 672 9,783 ED-MCES 778 7,530 ED-MSU 775 279 WDG-84-5012 19,243 Nowlerski 1,769 RAE-82-1017 45 WDG-84-5005 13,438 RAE-84-1040 16,871 RAE-83-1031 1,860 RAE-84-1043 17,457 PIG 395162 133 RAE-85-1054 397 RAE-84-1041 13,541 RAE-84-1042 16,556 Department of State Lands MT 950-CTO-30 $ 576 Munshower 16,830 Dollhopf 26,507 Weaver 80 Fish, Wildlife and Parks Gould $ 10,450 Giddings 4,967 Wood & Herr 9,783 Mackie, S602 30,820 54 Expenditures Contract Number and Disbursements Office of Public Instruction 84-5703-05-23-22 C616 84-5703-05-20-16 84-5703-05-24-21 84-5703-05-19-17 H321 84-5703=05-23-22 C617 84-5703-05-24-21 T853 84-5703-05-23-21 84-5703-05-23-16 85-OPI-H331 84-5703-05-24-21 T851 84-5703-05-25-22 R413 84-56-5703-060-TE 84-56-5703-064 5 T874 85-C6333 85-OPI-C628 85-OPI T868 85-OPI-D275 85-OPI-D376 85-OPI-C630 85-OPI-D294 85-OPI-T867 85-OPI-H332 85-0PI-R421 85-OPI-C629 85-T865 85-OPI-C626 85-OPI-D377 85-56-5703-200SD Social and Rehabilitation Services SRS MCG-OAA-84 MCG 4 A 84 MCG R4B 84 Montana Arts Council Jahnke MAC 04-1764-4 MAC 05-1773-4 MAC 05-1834-5 MAC-09-1841-5 MAC-02-1866-5 Montana Historical Society 3083-7256-17B Davis $ 580 1 ,411 263 29 866 63 4 ,416 176 14 ,030 686 108 3 ,395 615 2 .917 8 ,196 2 ,544 7 .113 23 ,538 21 ,060 2 ,100 13: ,538 23: ,456 11: ,672 6: ,282 3: ,817 1: ,914 3: ,148 21: ,430 33: ,040 $ 8. ,350 26, .519 38, ,352 $ 10, .771 32, ,006 1, ,594 2, ,275 630 I, ,500 $ 425 3, ,352 55 Expenditures Contract Number and Disbursements Montana Committee for the Humanities Coffin $ 5,700 8-1-50 3,857 9-1-22 10,043 8-2-5 2,475 9-1-49 3,700 8-1-40 9,052 Montana State Library Alldredge $ 11,000 Environmental Quality Council Sel Com Water MA $ 351 McKinsey 3,650 Other RRD MAES 5501 $ 44,100 84-52-0018 35,847 Flathead Basin 12,989 State College Work Study 107,857 Private Seed Growers' Association $ 20,912 Rosebud County Commissioners 30, 177 TOTAL STATE GRANTS $ 1,585,795 56 Expenditures Contract Number and Disbursements OTHER GRANTS Kain $ 7 DEAC 21 82 MC 19 8,573 CH2MHILL 22,436 BARD 013179 3,163 EAF 150 EAF 9,344 CIBA-GEIGY 781 EAF 250 Hill Task #841 496 Montana Heart Association 16,053 Various 34,856 Burlington Northern 25,000 Tetragenics 30 Various 5,225 EAF 3,550 District Feed Res. Co. 3,684 EAF 5,477 Johns Manville 200 School District #7 24,949 Custer 1,667 Northwest National Life 1,979 Various 3,943 Lilly 215 Hockett 2,480 Sherrick 2,452 Hof fman-Laroche 1,627 Gibson 4,088 Hyyppa 2,062 Welsh 521 Wells 1,475 Burlington 6,002 Material Handlin 500 No 33214 1965 Munshower 949 Fees 1946 Ritchey 3,329 Sheep Foundation 4,305 EAF 14,308 Distellers Feed 3,230 Tetragenics 9,221 PO//SR2545 2,821 EAF 376 EAF 52,541 ZINPRO XOEP 3,242 Triangle Irrigat. 113 National Student Exchange 1,948 Morrill 3,568 Miles Labs 4,242 GW Sugar Commit. 979 57 Expenditures Contract Number and Dibursements OTHER GRANTS (cont.) Seed Growers Association $ 839 Kellogg Foundation k ,(ill Kellogg Foundation 1,325 Boone Crockett 1,966 Catlin 1.409 McKinesy 49,662 Utah 401 Various 2005 PO103956 7,108 Wiesner 1,442 Videon 4,750 Phillips 4,106 EAF 89,112 Kellogg Foundation 6,384 Tetragenics 4,715 PO A 13683 30,318 Decker No. 64 18,639 Chevron 4,071 Anderson 5,155 Lilly 38 Meyer Trust 15,710 IRBY 1,272 Eslick/Mille 40 PO NC 280810 59,032 ERF ^8,156 Wells ERF Knapp Lockerman Holen McClure Whitman 935 King, F. 4,757 Hanson/Amend 20 Tetracgenics 4,714 665 15930-GB2 11,002 Garcia 7,329 Hart 3,238 Power Process In 5,639 FR G&C149 8,379 Potash Corporation 13,487 363 39 12 TIF307740 771 718 Thiokol Corp. 7,357 C49550312 Nerco 22,416 Yellowstone Chemical 9,280 Scharen 2,442 American Malt Barley Association 3,210 PO 4 A205 1>525 645 RDI 22,363 Characklis 201 58 Expenditures Contract Number and Dibursements 587 OTHER GRANTS (cont.) NRI End Foundation $ Various Companies 3 137 PRF 14460-G5 '309 Hill Task #840 18,407 Hockett 2 927 Bergman 19,873 Stallknecht 5 i^q Ditterline 3 340 Anderson 9 5^0 Wiesner i 25^ Foley 933 Northwest Area Foundation 21 257 Weisner 4^696 Proctor/Gamble 5 353 Weiss 11,152 Stallkencht 3 ^60 Res. & Development Inst. 14 450 American Colloid Company 7,816 12-14-100-2303 ' 80 Welty 1,580 Stewart 766 Sanks 7,289 Butte Silver-Bow 288 Bergman, J. 4,686 Lang, T. 221 16612-AC-l 8,943 Upjohn 4,001 Miles Labs " 5,508 Jackson 508 Western Energy 368 City of Helena 9,941 RDI 6,068 RDI 21,047 RDI 31,830 26000186 Joint 1,243 AMB Association 18,684 Fay 51,821 Helena School District #3 2,429 GTA 410 Hockett 170 CID-MSU-WM-02 66,240 Walter 437 EAF 156 Davis 306 RDI 4,651 Res Corporation 514 Cascade Company 239 RDI 274 SG-187 2,282 RDI 72 59 Expenditures Contract Number and Disbursements OTHER GRANTS (cont.) Blue Cross $ 3,014 Hull 233 Norden Labs 4,540 Hilda Company 2,852 Colorado Serum Company 4,171 Montana Power 4,859 American Meat Inst. 2,804 Kain 9,625 E.I. Dupont HI RDI 75,262 Tech Committee 11,242 I CARD A 11 Stockgrowers 223 Lilly Company 7,258 Sand Line 178 Western Energy 6,840 Mathre 12,292 American Home Economic Association 600 Various 33 P315 40100 35,002 Hovin 456 MAC0418595 20,010 Skogley 18 Res Corp. 8,324 GTR MT FDH 19,183 Worrest 2,220 American Cyanami 4,386 Myers 4,745 Gavlak/Baude 2,403 Allied Corp 487 Woodhull 310 Canadian Government 174 Montana Heart Association 1,365 Zortman 6,711 Robson 234 Kansas 8215 7,850 ERF 2,094 Brownson 2,124 Lewistown School District 98 RDI 1.260 Burlington Nothern 1,060 Anaconda 37 Upjohn 5,937 RDI 5,304 RDI 868 RM ELK FDN 1,301 CID MSU PCO-03 4,395 Colorado State University 3,843 Robson 19,101 RDI 965 60 Expenditures Contract Number and Disbursements OTHER GRANTS (cont.) Audubon Society $ 24 Bergman 264 MSU UM 01 17,478 GMF 5,507 Mott 83-269 20,067 Various 1,628 Mint Council 991 RDI 163 Exxon 13,676 POEA3221 Boeing 13,419 FDFDM University of Arizona 32,054 GH3-11678S 25 MSU 1,469 Idaho F&G 3,140 Tech Committee 9,322 OSP#3569 1,966 S 2,467 RDI 41,232 Welsh 33,336 PVT Companies 14,428 MSU-WIDII-01 4,956 Various 509 MSU 1985 2 4,686 Ath. Sch. Assoc. 40,226 MCH 9,250 RDI 5,366 POT PHOS INST 6.804 Cascade City ' 2,543 Worley 2 MCH 8-1-1 • 497 Montana Power Company 124,519 CSU SUB 7557 6,207 Western Energy 16,628 Western Energy 10,586 Hunt 146 Montana Heart Association 35 McKlnsey 5,142 Western Energy 11,693 Idaho 2,425 CID 7,658 Boeing GE0098 46 Faulkner/Wil 20,952 American Barley Association 20,701 U of C SUB 66019 33,099 9-X65-V2460 28,419 PO35034 Maimi 26 ENG 125 SERI XK404136-4 8,487 Story 1,191 T. Weaver 80 61 Expenditures Contract Number and Disbursements OTHER GRANTS (cont.") FR784 $ 1 Jackson 16,862 Stallknecht 749 Graham 646 Stewart 22,439 Gibson 2,087 Sharp 6,071 Bergman 1,674 Amend 22,450 Briggs 1,157 Catlin 4,245 Bellows 213 58202 #6 8,091 Proctor/Gamble 26,809 RDI 13,828 RDI 5,695 Hill Task #842 3,024 62015 154,099 58202 SUPP in 2 NAACOG 263 EAF 600 EAF 1.302 EAF 95 Energoinvest 28,740 ECN 0026 152 Phillips Roxane 8,145 Various 9 ,559 TOTAL OTHER GRANTS $ 2,417,093 62 MONTANA STATE UNIVERSITY SCHEDULE OF GRANT EXPENDITURES DISBURSEMENTS FISCAL YEAR ENDED JUNE 30, 1984 Expenditures Contract Number and Disbursements FEDERAL GRANTS Department of Education GG08302783 $ 33,838 G008102311 20,321 G008202081 549 00750V1058 9,738 G008101116 54,378 G008102047 25,113 G00831153 ' 38 G008101025 39,564 6008005038 674 G008102311 40,786 G008004366 156,118 G008101025 172,882 G008004366 6,585 Pell 3,138,055 College Work-Study 691,260 NDSL Disbursements 1,318,682 Administrative and Collection Costs 52,079 SEOG 249,381 Department of Interior CX12009B035 ' $ 144 IPA 49,677 CX-1200-2-B035 13,005 MT950-CTZ-9 415 14-10-2-920-13 345 141600091516#2 22,902 14160091516#5 2,850 14-06-600-614A 3,387 PX-1570-4-G003 3,300 PO-4C50-0100282 4,304 14-16-0006-84-92 3,129 Picton . 3,757 1416000980015 4,776 CX-1200-2-B040 230 141600091516//4 5,627 Seattle 417 C50-C-1420-4669 32,101 63 Expenditures Contract Number and Disbursements Health and Human Services 5R23N517974-123 $ 45,271 5R01AI1351205 21,366 90AD0012/01 7,719 1R01AM3351001 95,907 1R01GM3182401 111,814 2507RR0710006 . 1,012 5R01AI1794803 49,864 2503RR0309104 1,133 1501RR0172501 188,830 2503RR0309103 3,698 12 23 ES03254-01 15,722 5K04ES00063-3&4 38,188 1R01HD1744401 46,641 5D10NU28051-03 4,733 2ALL NU-00239-08 20,250 5G08LM0366802 5,903 5D23NU0001 25-05 15,883 1 ROl AI19089-01 65,790 2 A11NU00239-07 123 TOl MHA5898-04 2,125 5R01 ES02995-02 65,087 5G08LM03668-03 63,485 5K04AI00367123 21,666 1R01E50299501 11,388 2507RR07100234 3,997 1 506 RR08218-01 15,898 MIN BIOMED RES 18,494 Nursing Loan Disbursements 120,244 U.S. Department of Agriculture 12-14-5001-42 $ 155,575 58-9AHZ-3-42 125,154 58-32U4-3-631 12,239 Nielsen 2,550 USDA 8,034 22-C-3-INT-67 192 EED12170981712 13,557 Rust 37,836 22-C-2-INT-65 7,873 PNW-83-318 26,243 28-C2-204 7,675 PNW-83-316 9,000 58-9AHZ-2-687 1,745 53-0398-3DE-3 33,348 59010410903590 5,489 22-C-3-INT_66 472 22-C-2-INT-064 6,291 82CRSR21077 20,936 USDA SC5 11,379 64 Expenditures Contract Number and Disbursements U.S. Department of Agriculture (cont.) USDA $ 1,295 22-C-4-INT-68 8,991 7059230112 6,991 83CRSR2-2319 12,041 28-C3-288 6,418 53-0385-3-2685 29,694 530343300682 12,933 PX12002G015 2,415 BARDUS33580 27,184 589AHZ1595 10,422 58519B11110 14,596 FROM G&C 706 3,703 22-C-2-INT-63 20,859 USDA SEA 923 58-32R6-3-202 12,378 58-9AHZ-3-724 1,451 12-ll-204-12#56 6,758 USDA SEA 2,802 INT-81-062-CA 4,520 SEA 68,897 BARD 016379 1,693 579020261002A 8,918 USDA 4,322 SEA FORMULA 84 41,009 SEA 56,863 12-05-300-663 25,900 12-05-300-664 25,000 12-05-300-0699 ' 2,086 12-05-300-567 9,272 12-05-300-439 3,253 Smith-Lever 1,792,892 Extension 399,955 Hatch 1,127,831 Regional 535,381 Department of Defense N00014 84 K 0309 $ 9,397 N0001480C0475 24,330 N0001484K0118 . 32,123 DAAG29-82-K-0127 ' 63,338 AFOSR 80-0267 56,657 AFOSR-82-0267 7,829 65 Expenditures Contract Number and Disbursements Department of Energy DEAC6581WP15430 DEAP1881FC23116 1-MOOl-C L-KOOLOC DEAT0780ID1281 4-BOOl-C National Aeronautics and Space Administration NAS-9-16007 National Science Foundation SPE-8320677 CPE 8404063 CPE-8017439 CEE 8318476 DMR7906892 CHE7916134 DMR-830946 INT 8211113 MEA-8011592 CHE-8119857 CPE 8200112 CHE 8306254 DEB-8023341 DMR-8205280 EAR-8305173 PRM 821500 NSF rPENDING") PCM 8208393 CME-7901636 ATM 8209836 DMP-8205581 Schmidt CPE8305152 BSN 8308209 PRM-8011449 FY 81 MONTS Other Federal UofC $ 8,729 CHPT 36. TITLE 38 1,165 SBA-1791-PMA-74 6,237 P01401505 3,269 Stover 16,359 PC HO 100408-10 4,166 589AHZ2677 CIMMY 3,394 DTFH61-82-P-4011 450 ES20653 82 6,731 DEAP1882FC24383 9,557 66 $ 56, ,804 284 17, ,334 18, ,027 10, ,883 15, ,846 $ 1, ,874 $ 42 3 37. ,940 18, ,503 71, ,297 48, ,066 184, ,205 4, ,949 10, ,787 64, ,888 50, ,417 110, ,500 8, ,098 44, ,692 39, ,928 16, ,160 28 ,854 47, ,576 365 79 ,844 105 ,468 65 17 ,361 7 ,278 50 ,572 277 ,417 r^-o^T-o^i- M u Expenditures Contract Number „ j n • v and Disbursements Other Federal (cont.) GM2 1560-83 (NEH) $ , . „_. 106-04 * 15.000 P0784828097 ^^'wn DEFG2282PC50787 J i7o 82-ABA-02125 A iii 83-ABC-00095 A -^qI RTAP 008 7 7 CA20604 Q ^'^■^ 106-05 18,688 186-83-3019 50,871 P0100614-10 J'q^^ TVA 1131-130 ^'l^^ TVA 1131-131 ,^'°^° lA 21198 19 G lo.yjl CSRS-48W40 ^5 784-81-8023 ' J^ DTFH61-40073 ^^ DAN1318A00404500 q'^^, DSAN-C-0024 ?A7 i^t AID/DSANXIIG0161 a^'i// TV-39645A ?„ :,„ Pesticides WRRC Department of Commerce 30-02-01053 10,269 8,352 Peavy ^ 83/84/ WRRC * il'lil 820WRTWRRC '^i 904 1,241 Environmental Protection Agency X1149NNEX - J PO-3B0880NAEX ^^^^ R8-8304-14 ^'9^2 R00831501 9679 CR81001501 ^^ oil Pagenkopf s^7 G008378830 ^^/^ CR811334-01 l7'sfi« CR80724004 99q'a97 CR81001502 11 li-) CR80947803 n^ n^o CR0810955-01 7 „.. TT,- 1 1 • 4,826 Williams ERA PERS. ACT. /4,830 CR80593503 ^ TOTAL FEDERAL GRANTS $14,995,224 67 Expenditures Contract Number and Disbursements STATE GRANTS Department of Agriculture ST DEPT AG Bahn $ 2,215 Wheat Commission 83MWRMC 14,752 84MWRMC 375,487 85MWRMC 563 Department of Commerce 0229 $ 34,782 MT DEPT COMM 32,795 McKinsey 5,999 Department of Health DHF540335 12056 $ 98 Department of Highways Jennings Gould Department of Natural Resources and Conservation ED MSU 672 RAE-83-1025 WDG-84-5012 Nowlerski RAE-82-1017 WDG-84-5005 RAE-84-1038 RAE-84-1040 RAE-84-1039 RAE-83-1031 RAE-84-1043 ED-MCES-661 Department of State Lands MT950-CTO-30 Munshower Dollhopf Weaver Fish, Wildlife and Parks Gould Greer Tweten Irby Giddings Wood & Herr Mackie 5602 68 $ 128,288 1,922 $ 5,226 41,871 401 15,995 5,426 8,339 1,840 3,655 2,962 21,246 7,631 5,582 $ 5,184 25,843 20,876 13,073 $ 12,866 890 2,448 408 4,978 10,682 29,695 Expenditures Contract Number and Disbursements Office of Public Instruction Phillips $ 481 84-OPI C618 5,000 84-5703-05-23-22 C616 1,030 84-5703-05-25-17 4,795 84-5703-05-20-16 13,882 84-5703-05-20-22 2,472 84-5703-05-24-21 4,736 84-5703-05-19-17 H321 15,372 84-5703-05-23-22 C617 2,023 84-5703-05-24-22 T853 6,549 84-5703-05-24-21 T852 1,975 84-5703-05-23-21 3,149 84-5703-05-24-22 5,962 84-5703-05-23-16 4,789 84-5703-05-24-21 T851 1,770 84-5703-05-25-22 R413 6,340 84-5703-05-25-22 R414 1,946 83-5703-05-23-21 1,334 83-56-5703-05-2 TE 6,356 DPI R415 10,100 83-5703-05-23-21 1,056 83-5703-04-19-17 H22 3,507 83-56-5703-050-5 1,262 83-5703-05-25-22 145 84-56-5703-060 TE 9,742 84-56-5703-064 5 5,720 Social and Rehabilitation Services SRS CSD-90/IV-A $ 16,517 SRS MCG OAA-84 6,055 MCG AA 84 3,481 Montana Arts Council MAC 226 141 029 $ 19,098 Jahnke 14,209 MAC 04-1764-4 18,124 MAC 05-1773-4 393 MAC 02-1753-4 500 MAC 02-1752-4 1,000 MAC 05-1775-4 750 Montana Historical Society 308-7256-17B $ 26,268 SP 3012332-16-PHI 1,835 30-83-7256-19B 390 SP-30-7256-18B 2,941 69 Contract Number Expenditures and Disbursements Montana Committee for the Humanities Sexson/Merrie Andersen 7-3-26 Maskiell 7-3-58 7-3-80 Coffin 8-1-50 Cattin 1.511 8,648 3,333 2,881 21,812 1,221 600 714 4,298 Department of Justice Fabianic 1,500 Commissioner of Higher Education Kohl 34 Bureau of Mines Lageson 3,140 Environmental Quality Council SelCom Water MA Other Tummala RRD MAES 5501 84-52-0018 HB 469, Special Appropriation POI-T841 MDQA Grain Utilization State CWS Private Seed Growers' Association Rosebud County Commissioners TOTAL STATE GRANTS 2,765 $ 5,249 5,684 3,664 1,488 1,427 3,188 57,455 $ 17,420 29,762 $ 1,254,866 70 Expenditures Contract Number and Disbursements OTHER SOURCES DEAC 21 82 MC 19 $ 124 SIGMAXI 303 Mentzer 200 BRAD 013179 4,593 EAF 4,849 EAF 44 CIBA-GEIGY 870 EAF 14 RDI 29 Unrestricted 51,636 EC-84-011816 3,914 Tatragenics 4,407 EAF 2,600 EAF 1,450 Dist. Fed Res. Co. 10,984 Diamond Shamrock 331 5 R Rust 34,098 School Dist. #7 23,197 Custer 1,085 Various 1,965 Lilly 1,116 Hockett 4,731 Sherrick 902 Fleming 312 Gibson 4,586 Hyyppa 2,314 Welsh 300 Blackketter - 1,001 Brox«mson 1,075 Stallknecht 19,170 RDI . 16,993 NO 33214 9,937 Munshower 22,498 Fees 9,145 Speer 8,865 American Malting 3,000 P0#SR2545 299 Catlin 27,255 ZINPRO XOEP 2,896 Shannon 122 Traingle Irrigat. 1,555 Natinal Student Exchange 356 Morrill 4,992 Gilchrist 24 GW Sugar Commiit. 4,379 Seed Growers Association 1,640 Kellogg Foundation 9,917 Kellogg Foundation 1,415 71 Expenditures Contract Number and Disbursements OTHER SOURCES (cont.) Tiahrt $ 504 Groenhout 22,804 Catlin 2,247 McKinsey 32,803 University of Miami 102 Kain 177 EAF 14,578 Kellogg Foundation 5,087 Optical Science Center 1,000 Carrol ^69 EAF 16,000 RDI 22,583 Atlanta University 1,631 IRBY 958 Eslick/Mille 325 Sloan 223 ERF 62,976 Blackketter 2,362 King, F. ■ 3,849 Hanson/Amend 1^0 Ritchey 604 ERF 3,479 IMMUNEX 9,495 NCEA 4,529 Fiscus 311 Hart 6,566 Kushnak 578 Anaconda Company ' ^ Patash Corporation 18,543 RDI (Cargill) 19,47" Busch 341 Knapp 638 Lockerman 1,149 Holen Ditterline Wiesner o 674 TIf307740 663 McClure 1,389 Thiokol Corporation 15,690 3M ^.812 TCM 28320 . 3,360 Stallnecht 16 Whitman 2,634 RDI 6,258 Characklis 3,826 Various Companies 399 PRF 14460-G5 13,432 Cont. Grain Company 4,889 Scaife/EAF 201 299 569 72 Expenditures Contract Number and Disbursements OTHER SOURCES (cont.) Cramer $ 802 Weisner 10,203 Proctor/Gamble 6,1^*7 Resource & Development Institution 27,009 TCM 28312 458 12-14-100-2303 249 Stewart 2,239 Sanks 6,214 Butte Silver-Bow 198 Upjohn 47,479 Miles Lab 2,969 Western Energy 4,981 City of Helena 3,811 Econ Inc. 58 RDI 27,040 RDI 120,570 26000186 Joint 400 AMB Association 4,987 Fay 48,275 Anaconda Schools 307 GTA 71 Hockett 1,973 Texaco 23,024 Walter 78 Montana Power 41,268 Overby 50 U of 0 NW Coal 11,208 RDI " 8,349 Res. Corporation 7,486 Chevron 767 RDI 6,542 SG-187 3,070 RDI 14,862 Westesen 898 Big Bud 496 Hull 118 Montana Power (EAF) 2,167 White Sulphur 997 Colorado Serum Company 7,924 American Meat Inst. 4,728 Gibson 1,294 North Cheyenne 2,802 E. I. Dupont 2,524 RDI 74,585 RDI 8,832 RDI 66 ?48 777 Lilly Company 8,557 Blue Ribbon 1,948 Stockgrowers 4,777 73 Expenditures Contract Number and Dibusrsements OTHER SOURCES (cont.) Sand Line $ 4,905 Western Energy 7,832 Mathre 5,775 Dow Chemical 106 Federation Fly 256 P315 40100 11,793 Hovin 3 Skogley 478 Res. Coporation 6,126 Gtr. Mt. Fdh. 32,961 American Cyanami 5,154 Myers 434 Ideal 23,235 Gavlak/Baude 422 Montana Heart Association 18,500 Young, S. 26,610 Young, S, 14,729 Montana Heart Association 10,995 Zortman 4,401 Robson 5,62 7 Kansas 8215 5,950 ERF 10,330 Royster Company 7,164 Brownson 2,575 Champion Int. 1,773 Dry Pea Association 2,157 Roundup Public 5 1,146 Anaconda ' 2,211 Upjohn 8,146 RDI 6,696 Calgon 3,775 CID MSU PCO-03 743 Colorado State University 4,907 Robson 32,178 RDI 7,255 Thomas 1,113 Bergman 3,394 MSU1351-01 18,107 MOTT 83-269 58 Dry Pea Association 934 Various 477 CSU SUBCONT 5-38 8,469 CSU SUBCONT 5-38 13,622 RDI 3,178 RDI 40,250 Black Butte 17,835 Exxon 24,050 EAF 3,986 POEA3221 Boeing 4,031 74 Expenditures Contract Number and Disbursements OTHER SOURCES (cont.) FDFDM University of Arizona $ 35,277 GH3-116785 17,685 MSU 26,459 Res. Corporation 9510X 489 POEXX2181 (Boeing) 5,741 Anaconda 1,596 S 4,284 RDI 68,763 Burfening 40 Moss 945 Welsh 32,116 PVT Company 30,269 Weaver 1 , 784 Ath. Sch. Assoc. 58,838 Cascade City 12,258 Worley 878 Davis 2,721 MUE5C55833195824 100 MCH 8-1-1 7,154 MSU-WID-01 1,135 Montana Power 10,500 Montana Power 51,374 Munshower 66,992 CSU 18 Western Energy 12,939 Western Energy 9,084 Montana Heart Association 278 Center for Higher Education ' 4,700 MSUEGCP263007008 15,441 MSUEGCP263007008 6,291 Boeing GE098 3,063 Faulkner/Wil 23,228 Sub #224512 96 Sub #589055 4,916 Univ-Wyo 75 P035034 Miami 30,819 679 5,477 690 271 702 1,544 712 999 713 A, 724 715 3,489 726 7,479 747 84 779 31,143 816 75 817 6,046 2912 20,748 58202 #6 159,904 75 Contract Number OTHER SOURCES (cont.) 58202 Supp #7 118209 145 150 155 156 164 144 146 148 815 Exp( inditures and D: isbursements $ 14. ,635 348 11: ,940 386 20 ,215 37 ,192 5 ,041 88 3 ,473 1 ,770 1 ,851 TOTAL OTHER GRANTS $ 2,483.703 76 MONTANA STATE UNIVERSITY SCHEDULE OF FULL-TIME EQUIVALENT (FTE) STUDENTS FOR THE TWO YEARS ENDING JUNE 30, 1985 Quarter Year Undergraduate^ FTE's Reported Graduate „ FTE's Reported Total- FTE's Summer 1983 1,367 437 1,804 Autumn 1983 10,243 496 10,739 Winter 1984 9,918 490 10,408 Spring 1984 8,907 507 9,414 Stimmer 1984 1,275 429 1,704 Autumn 1984 9,821 466 10,287 Winter 1985 9,625 469 10,094 Spring 1985 8,472 500 8,973 1 Undergraduate quarterly credit hours divided by 15, Graduate quarterly credit hours divided by 12. Includes both Unrestricted and Restricted funded FTE's, 77 I / MONTANA AGRICULTURAL EXPERIMENT STATION AUDITOR'S OPINION AND AGENCY FINANCIAL STATEMENTS SCOTT A. SEACAT LBStSLATIVE AUDITOR STATE OF MONTANA ^ffxt:e nf tire J^giskiiit^ ^xtbii:ai:: STATE CAPITOL HELENA, MONTANA 59620 406/444-3122 DEPUTY LEGISLATIVE AUDITORS: JAMES GILLETT FINANCIAL-COMPLJANCE AUDITS JIM PELLEGRINI PERFORMANCE AUDITS LEGAL COUNSEL: JOHN W. NORTHEY The Legislative Audit Committee of the Montana State Legislature: We have examined the accompanying Balance Sheets of the Agricultural Experiment Station CAES) at June 30, 1984 and June 30, 1985, and the related Statements of Changes in Fund Balances and Current Funds Revenues, Expenditures, and Other Changes for the two fiscal years ended June 30, 1985. Our examination was made in accordance with generally accepted auditing standards and Standards for Audits of Governmental Organizations, Programs, Activities, and Functions and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The financial statements presented are only for the Agricul- tural Experiment Station. Accordingly, the accompanying financial statements are not intended to present fairly the financial position of the state of Montana as of June 30, 1984 and 1985 or the results of its operations and changes in its fund balances for the two fiscal years then ended, in conformity with generally accepted accounting principles. In our opinion, the financial statements referred to above present fairly the financial position of the Agricultural Experiment Station at June 30, 1984 and June 30, 1985, the changes in fund balances, and the current funds revenue, expenditures, and other 78 changes for each of the two years ended June 30, 1985 in conformity with generally accepted accounting principles which have been applied on a consistent basis. Respectfully submitted, James Cillett, CPA Deputy Legislative Auditor February R, 1986 79 AGRICULTURAL EXPERIMENT STATION BALANCE SHEETS Year Ended June 30, 1985 ASSETS CURRENT FUNDS: Unrestricted: General operating: Cash Accounts receivable Due from other fund groups Investments (Note 2) Total general operating Designated: Cash Accounts receivable Due from other fund groups Total designated Total unrestricted Restricted: Cash Accounts receivable Due from other fund groups Investments (Note 2) Total restricted Total current funds PLANT FUNDS: Unexpended : Cash Accounts receivable Due from other fund groups Investments (Note 2) Total unexpended Renewals and replacements: Cash Investments (Note 2) Total renewals and replacements Investment in plant: Land and land improvements Buildings Equipment Livestock Total investment in plant 710,535 101,367 264 308,832 Total plant funds See notes to financial statements 1,120, 998 227, 957 1, 700 8, 481 238, 138 1,359, 136 85, 951 385, 737 6, 921 34, 497 513 106 $ 1,872 242 $ 13 233 20 103 298 26 ,904 60 ,538 2 ,003 103 ,650 105 ,653 1,378 ,525 3,829 ,452 4,771 ,098 1,844 ,862 11,823 ,937 $11,990 ,128 80 LIABILITIES AND FUND BALANCES CURRENT FUNDS: Unrestricted : General operating: Accrued payroll $ 505,792 Accounts payable and accrued liabilities 216,983 Due to other fund groups 8,779 Compensated absences payable (Note 4) 1,037,106 Fund balance (Note 1) (647,662) Total general operating 1 , 120 ,998 Designated : Accrued payroll 15,178 Accounts payable and accrued liabilities 38,944 Due to other fund groups 7,185 Compensated absences payable (Note 4) 5,372 Fund balance ^71,459 Total designated 238, 138 Total unrestricted 1 ,359,136 Restricted: Accrued payroll 4,764 Accounts payable and accrued liabilities 496,205 Compensated absences payable (Note 4) 6,445 Fund balance 5,692 Total restricted 513,106 Total current funds $ 1,872,242 PLANT FUNDS: Unexpended : Accrued payroll $ 735 Accounts payable and accrued liabilities 6,421 Fund balances 53,382 Total unexpended 60 ,538 Renewals and replacements: Fund balance 105 ,653 Total renewals and replacements 105 ,653 Investment in plant: Net investment in plant 11,823,937 Total investment in plant 11 ,823,937 Total plant funds $11,990,128 81 AGRICULTinRAL EXPERIMENT STATION STATEMENT OF CHANGES IN FUND BALANCES Year Ended June 30, 1985 Current Funds Revenue and other additions: Current funds revenue Miscellaneous income Expended for plant facilities (including $523,755 charged to current funds) Total revenue and other additions Expenditures and other deductions: Current funds expenditures Expended for plant facilities (including $10,298 non-capital expenditures) Total expenditures and other deductions Transfers among funds-additions (deductions) : Voluntary: Total transfers Net increase (decrease) in fund balance Fund balance at beginning of year as previously reported Unrestricted General Operating Designated Restricted $9,140,394 $ 511,349 $2,448,743 9,140,394 9,360,810 9,360,810 (220,416) (449,092) - 94 865 74 571 511,349 2,448,743 416,484 2,472,747 416,484 2,472,747 (24,004) 34,162 Adjustments: (Note 1 & 4) Prior year revenues Prior year expenditures Compensated absences payable Other 32,129 867 897 (3,474) (61) (5,090) (6,809) 1,217 (273) Total adjustments 21,846 2,023 (4,466) Fund balances at beginning of year as adjusted Fund balances at end of year (427.246) 76,594 29,696 $ (647,662) $ 171,459 $ 5,692 See notes to financial statements Plant Funds Renewals and Investment Unexpended Replacements in Plant - $ 64,128 18,971 (566) 85,963 9,780 85,963 9,780 33 609,200 64,128 18,971 609,200 (21,835) 9,191 609,200 75,783 96,462 12,117,752 (903,015) (566) - (903,015) 75,217 96,462 11,214,737 $ 53,382 $ 105,653 $ 11,823,937 MONTANA AGRICULTURAL EXPERIMENT STATION STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES Year Ended June 30, 1985 Unrestricted General Operating Designated Restricted Total Revenues : Federal appropriations $1,757,239 $ - $ - $ 1,757,239 State appropriations 5,930,543 - 71,212 6,001,755 Fed. grants and contracts - - 1,052,016 1,052,016 State grants and contracts - - 454,445 454,445 Private grants and con- tracts - - 888,378 888,378 Sales and service of educational activities 1,380,008 - - 1,380,008 Other sources 72,604 511,349 6,696 590,649 . Total revenues 9,140,394 511,349 2,472,747 12,124,490 Expenditures : Research 8,489,984 - 2,459,860 10,949,844 Institutional support 749,399 - - 749,399 Operation and maintenance of plant 121,427 - - 121,427 Other 2 416,484 12,887 429,371 Total expenditures 9,360,810 416,484 2,472,747 12,250,041 Transfers and other additions (deductions ) : Transfers - - - Deficit of restricted receipts over transfers to revenue 2 I (24,004) (24,004) Net increase (decrease) in fund balance $ (220,416) $ 94,865 $ (24,004) $ (149,555) See notes to financial statements 84 MONTANA AGRICULTURAL EXPERIMENT STATION NOTES TO FINANCIAL STATEMENTS June 30, 1985 1 . Suminary of significant accounting policies Related parties: Montana State University, Montana Agricultural Experiment Station and Montana Cooperative Extension Service are related through common management and control; however, they are separate and distinct agencies and they receive separate federal and state appropriations. These agencies have certain related party transactions, including sharing office facilities, management and accounting and office services. The accounts of Montana State University and Montana Cooperative Extension Service have not been included in the accom- panying financial statements. Financial statements: The accompanying financial statements have been prepared on the accrual basis in accordance with generally accepted accounting principles for colleges and universities except as noted hereafter. The statement of current funds revenues, expenditures and other changes is a statement of financial activities of current funds re- lated to the current reporting period and does not purport to present the results of operations or the net income or loss for the period. Fund balance for unrestricted general operating funds includes $20,501 allocated for encumbrances and $368,943 prior period revenue overage netted to the unfunded liability of $1,037,106 for compen- sated absences payable. Fund accounting: The accounts of the Station are maintained in accordance with the principles of fund accounting wherein resources are classified for accounting purposes into funds that are identified by the limitations and restrictions placed upon their use. Separate accounts are main- tained for each fund, however, accounts with common characteristics are combined into groups and reflected as such in the accompanying financial statements. Plant and equipment: At June 30, 1985 investment in plant was adjusted $903,015 to reflect the totals in the property control subsidiaries. Livestock is carried at current market value and any differences from the prior years values are reflected in this adjustment. Livestock is purchased and raised for experimental purposes; the revenues from livestock sales are recorded in the general operating fund, except when a breeding animal is sold and is expected to be replaced; then sales proceeds are recorded in designated funds and used for replacements as needed. 85 MONTANA AGRICULTURAL EXPERIMENT STATION NOTES TO FINANCIAL STATEMENTS June 30, 1985 Summary of significant accounting policies (continued) Depreciation: No provision has been made for depreciation of plant facilities in accordance with generally accepted accounting principles for col- leges and universities. Allowance of Bad Debts : An allowance for bad debts has not been recorded. Losses from bad debts are recorded as adjustments to revenue in the year in which they are deemed uncollectable. Allocated for encumbrances: The Station records encumbrances as expenditures in conformance with the Statewide Budgeting and Accounting System. At June 30, 1985, the Station had encumbered $20,501 of funds that are not included in expenditures in the accompanying financial statements. The accrual basis of accounting provides that expen- ditures include only amounts associated with goods and services received and that liabilities include only the unpaid amounts as- sociated with such transactions. Investments : Investments are carried at cost, which approximate market value at June 30, 1985. Investments Investments at June 30, 1985 consist of the following: Montana short-term investment pool Investments at June 30, 1985 are owned by the following funds: Current funds : General operating $ 308,832 Restricted 34,497 Plant funds: Unexpended 26,904 Renewals and replacements 103 ,650 $ 473,883 Cost $ 473,883 $ 473,883 86 MONTANA AGRICULTURAL EXPERIMENT STATION NOTES TO FINANCIAL STATEMENTS June 30, 1985 3 . Retirement plans All of the Station's full-time employees are members of the Montana Public Employees Retirement System or the Montana Teachers Retirement System. Employer contributions to these systems, which were determined to be actuarially sound by the most recent biennial valuations, totaled $363, 74A for the year ended June 30, 1985. 4 . Commitments and contingencies Compensated absences payable: As of December 31 of each year, employees can accumulate vacation leave up to twice the number of leave days earned annually and sick leave can be accumulated without limitation. Upon termination, the employee is paid the accumulated vacation leave and 25% of the accumulated sick leave. Vacation and sick leave payments are recorded as an expenditure at the time they are paid to the employee. Due to system limitations, the change in the compensated absences payable amount is stated as an adjustment and not identified with the fiscal period earned or utilized by the employee. Leases: The Station reserves the right to limit the amount of expenditures associated with lease contracts without penalty when in the sole judgment of the Station annual funding or program changes necessitate. Capital lease agreements for various purposes and time periods totaling $34,331 at June 30, 1985 are not added to net investment in plant and not deemed to be material to the overall consolidated financial position of the Station. 87 AGRICULTURAL EXPERIMENT STATION BALANCE SHEETS Year Ended June 30, 1984 ASSETS CURRENT FUNDS: Unrestricted: General operating: Cash Accounts receivable Due from other fund groups Investments (Note 2) Total general operating Designated: Cash Accounts receivable Due from other fund groups $ 729,957 79,263 1,691 477,977 1,288,888 25,154 2,772 70,558 Total designated Total unrestricted Restricted: Cash Accounts receivable Investments (Note 2) 98,484 1,387,372 82,089 426,222 61,196 Total restricted Total current funds PLANT FUNDS: Unexpended: Cash Accounts receivable Due from other fund groups Investments (Note 2) Total unexpended Renewals and replacements: Cash Accounts receivable Investments (Note 2) Total renewals and replacements Investment in plant: Land and land improvements Buildings Equipment Livestock Total investment in plant 569,507 Total plant funds See notes to financial statements 88 $ 1,956,879 28,824 1,193 6,492 47,972 84,481 3,544 15,080 77,838 96,462 1,367,767 3,710,845 4,483,388 2,555,752 12,117,752 $12,298,695 LIABILITIES AND FUND BALANCES CURRENT FUNDS: Unrestricted : General operating: Accrued payroll ^ 436,633 Accounts payable and accrued liabilities 195 '203 Due to other fund groups 75 'sA? Compensated absences payable (Note 4) 1 030 '297 Fund balance (Note 1) (449 'o92) Total general operating 1, 288 j 888 Designated: Accrued payroll g goi Accounts payable and accrued liabilities 8*384 Due to other fund groups 2^09 Compensated absences payable (Note 4) 5 539 Fund balance 74*571 Total designated 987484 Total unrestricted 1,387,372 Restricted: Accrued payroll 90 925 Accounts payable and accrued liabilities 437*045 Due to other fund groups i 203 Compensated absences payable (Note 4) 6*172 Fund balance 34*162 Total restricted 569 507 Total current funds $ 1 956,879 PLANT FUNDS: Unexpended: Accrued payroll t g^g Accounts payable and accrued liabilities 6 167 Due to other fund groups i 552 Fund balances 75 -733 Total unexpended 84^"48T Renewals and replacements: Fund balance 95 452 Total renewals and replacements 96 462 Investment in plant: Net investment in plant 12 117 752 Total investment in plant 12 117 752 Total plant funds $12 298 695 89 AGRICULTURAL EXPERIMENT STATION STATEMENT OF CHANGES IN FUND BALANCES Year Ended June 30, 1984 Current Funds Revenue and other additions: Current funds revenue Miscellaneous income Expended for plant facilities (including $392,881 charged to current funds) Total revenue and other additions Expenditures and other deductions: Current funds expenditures Expended for plant facilities (including $14,231 non-capital expenditures) Total expenditures and other deductions Transfers among funds-additions (deductions) : Voluntary: Total transfers Net increase (decrease) in fund balance Fund balance at beginning of year as previously reported Adjustments: (Note 1 & 4) Prior year revenues Prior year expenditures Compensated absences payable Other Total adjustments Fund balances at beginning of year as adjusted Fund balances at end of year Unrestricted General Operating Designated Restricted $8,904,759 $ 562,861 $2,313,502 8,904,759 9,125,578 9,125,578 37,973 37,973 (182,846) 141,988 740,513 178 23,360 (1,030,297) (1,006,759) 562,861 2,313,502 420,873 2,256,397 420,873 2,256,397 57,105 (61,226) 43,686 48 (13,966) 350 (46,491) (6,589) (6,172) (6,191) (66,629) (266,246) (67,417) (22,943) $ (449,092) $ 74,571 $ 34,162 See notes to financial statements 90 Plant Funds Unexpended Renewals and Replacements $ 27,025 Investment in Plant $ 192,180 $ 544,089 192,180 27,025 544,089 164,443 996 164,443 996 (37 ,973) (37 ,973) (10 ,236) 88 ,896 (2,896) 19 26,029 544,089 70,433 11,294,237 279,426 (2,877) -_ 279,426 86,019 70,433 11,573,663 75,783 $ 96,462 $ 12,117,752 91 MONTANA AGRICULTURAL EXPERIMENT STATION STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES Year Ended June 30, 1984 Unrestricted Restricted $ 77,969 842,613 436,788 General Operating Designa $ ited Total $1,663,210 5,660,387 $ 1,663,210 5,738,356 842,613 436,788 Revenues : Federal appropriations State appropriations Fed. grants and contracts State grants and contracts Private grants and con- tracts - - 892,648 892,648 Sales and service of educational activities 1,487,298 - - 1,487,298 Other sources 93,864 562,861 6,379 663,104 Total revenues 8,904,759 562,861 2,256,397 11,724,017 Expenditures: Research 8,301,419 - 2,244,976 10,546,395 Institutional support 711,212 - - 711,212 Operation and maintenance of plant 112,947 - - 112,947 Other 2 420,873 11,421 432,294 Total expenditures 9,125,578 420,873 2,256,397 11,802,848 Transfers and other additions (deductions) : Transfers 37,973 - - 37,973 Excess of restricted receipts over transfers to revenue ' - - 57,105 57,105 Net increase (decrease) in fund balance $ (182,846) $ 141,988 $ 57,105 $ 16,247 See notes to financial statements 92 MONTANA AGRICUITTJRAL EXPERIMENT STATION NOTES TO FINANCIAL STATEMENTS June 30, 1984 1 . Summary of significant accounting policies Related parties: Montana State University, Montana Agricultural Experiment Station and Montana Cooperative Extension Service are related through common management and control; however, they are separate and distinct agencies and they receive separate federal and state appropriations. These agencies have certain related party transactions, including sharing office facilities, management and accounting and office services. The accounts of Montana State University and Montana Cooperative Extension Service have not been included in the accom- panying financial statements. Financial statements: The accompanying financial statements have been prepared on the accrual basis in accordance with generally accepted accounting principles for colleges and universities except as noted hereafter. The statement of current funds revenues, expenditures and other changes is a statement of financial activities of current funds re- lated to the current reporting period and does not purport to present the results of operations or the net income or loss for the period. Fund balance for unrestricted general operating funds includes $39,334 allocated for encumbrances and $541,871 prior period revenue overage netted to the unfunded liability of $1,030,297 for compen- sated absences payable. Fund accounting: The accounts of the Station are maintained in accordance with the principles of fund accounting wherein resources are classified for accounting purposes into funds that are identified by the limitations and restrictions placed upon their use. Separate accounts are main- tained for each fund, however, accounts with common characteristics are combined into groups and reflected as such in the accompanying financial statements. Plant and equipment: At June 30, 1984 investment in plant was adjusted $279,426 to reflect the totals in the property control subsidiaries. Livestock is carried at current market value and any differences from the prior years values are reflected in this adjustment. Livestock is purchased and raised for experimental purposes; the revenues from livestock sales are recorded in the general operating fund, except when a breeding animal is sold and is expected to be replaced; then sales proceeds are recorded in designated funds and used for replacements as needed. 93 MONTANA AGRICULTURAL EXPERIMENT STATION NOTES TO FINANCIAL STATEMENTS June 30, 1984 1. Summary of significant accounting policies (continued) Depreciation: No provision has been made for depreciation of plant facilities in accordance with generally accepted accounting principles for col- leges and universities. Allowance of Bad Debts: An allowance for bad debts has not been recorded. Losses from bad debts are recorded as adjustments to revenue in the year in which they are deemed uncollectable . Allocated for encumbrances: The Station records encumbrances as expenditures in conformance with the Statewide Budgeting and Accounting System. At June 30, 1984, the Station had encumbered $39,334 of funds that are not included in expenditures in the accompanying financial statements. The accrual basis of accounting provides that expen- ditures include only amounts associated with goods and services received and that liabilities include only the unpaid amounts as- sociated with such transactions. Investments : Investments are carried at cost, which approximate market value at June 30, 1984. 2. Investments Investments at June 30, 1984 consist of the following: Cost Montana short-term investment pool $ 664,983 $ 664,983 Investments at June 30, 1984 are owned by the following funds: Current funds: General operating $ 477,977 Restricted 61,196 Plant funds: Unexpended 47,972 Renewals and replacements 77 ,838 $ 664,983 94 MONTANA AGRICULTURAL EXPERIMENT STATION NOTES TO FINANCIAL STATEMENTS June 30, 1984 3. Retirement plans All of the Station's full-time employees are members of the Montana Public Employees Retirement System or the Montana Teachers Retirement System. Employer contributions to these systems, which were determined to be actuarially sound by the most recent biennial valuations, totaled $354,509 for the year ended June 30, 1984. 4 . Commitments and contingencies Compensated absences payable: As of December 31 of each year, employees can accumulate vacation leave up to twice the number of leave days earned annually and sick leave can be accumulated without limitation. Upon termination, the employee is paid the accumulated vacation leave and 25% of the accumulated sick leave. Vacation and sick leave payments are recorded as an expenditure at the time they are paid to the employee. Previous financial reports have disclosed the leave liability only as a footnote. In accordance with generally accepted accounting principles the liability as of June 30, 1984 has been recorded for the first time in the applicable fund groups. Leases : The Station reserves the right to limit the amount of expenditures associated with lease contracts without penalty when in the sole judgment of the Station annual funding or program changes necessitate. Capital lease agreements for various purposes and time periods totaling $243,229 at June 30, 1984 are not added to net investment in plant and not deemed to be material to the overall consolidated financial position of the Station. 95 MONTANA COOPERATIVE EXTENSION SERVICE AUDITOR'S OPINION AND AGENCY FINANCIAL STATEMENTS SCOTTA. SEACAT LEGISLATIVE AUDITOR STATE OF MONTANA STATE CAPITOL HELENA, MONTANA 59620 406/444-3122 DEPUTY LEGISLATIVE AUDITORS: JAMES GILLETT FINANCIAL COMPLIANCE AUDITS JIM PELLEGRINI PERFORMANCE AUDITS LEGAL COUNSEL; JOHN W. NORTHEY The Legislative Audit Committee of the Montana State Legislature: We have examined the accompanying Balance Sheets of the Cooperative Extension Service (CES) at June 30, 1984 and June 30, 1985, and the related Statements of Changes in Fund Balances and Current Funds Revenues, Expenditures, and Other Changes for each of the two fiscal years ended June 30, 1985. Our examination was made in accordance with generally accepted auditing standards and Standards for Audits of Governmental Organizations, Programs, Activities, and Functions and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. The financial statements presented are only for the Coopera- tive Extension Service. Accordingly, the accompanying financial statements are not intended to present fairly the financial position of the state of Montana as of June 30, 1984 and 1985 or the results of its operations and changes in its fund balances for the two fiscal years then ended, in conformity with generally accepted accounting principles. In our opinion, the financial statements referred to above present fairly the financial position of the Cooperative Extension Service at June 30, 1984 and June 30, 1985, the changes in fund balances, and the current funds revenue, expenditures, and other 96 changes for each of the two years ended June 30, 1985, in confor- mity with generally accepted accounting principles which have been applied on a consistent basis. Respectfully submitted. James Cillett, CPA Deputy Legislative Auditor February 14, 1986 97 MONTANA COOPERATIVE EXTENSION SERVICE BALANCE SHEETS Year Ended June 30, 1985 ASSETS CURRENT FUNDS: Unrestricted: General operating Cash Accounts receivable Due from other fund groups $220,803 170 6,746 Total general operating 227,719 Designated : Cash Accounts receivable Due from other fund groups Inventories Total designated Total unrestricted 208,208 80,913 17,021 95,692 401,834 629,553 Restricted: Cash Accounts receivable Investments (Note 2) 64,668 23,330 1,513 Total restricted Total current funds 89,511 $719 ,064 PLANT FUNDS Investment in plant: Buildings Equipment Total plant funds S 44,508 707,178 S751 ,686 See notes to financial statements 98 LIABILITIES AND FUND BALANCES CURRENT FUNDS: Unrestricted : General operating: Accrued payroll $246,310 Accounts payable and accrued liabilities 88,997 Due to other fund groups 13,888 Compensated absences payable (Note 4) 774,071 Fund balance (Note 1) (895 ,547) Total general operating 227 , 719 Designated: Accrued payroll 25,613 Accounts payable and accrued liabilities 38,929 Due to other fund groups 9,548 Compensated absences payable (Note 4) 50,228 Fund balance Total designated Total unrestricted Restricted: Accrued payroll 26,375 Accounts payable and accrued liabilities 39,581 Due to other fund groups 331 Compensated absences payable (Note 4) 29,682 Fund balance (Note 1) (6,458) Total restricted 89,511 Total current funds $719 ,064 277 ,516 401 ,834 629 ,553 PLANT FUNDS: Investment in plant: Net investment in plant $751,686 Total plant funds $751,686 99 / I MONTANA COOPERATIVE EXTENSION SERVICE STATEMENT OF CHANGES IN FUND BALANCES Year Ended June 30, 1985 j Unrestricted Plant Funds 4,074, ,287 4,169: ,021 4,169 ,021 (94 ,734) (699 ,251) General Investment Operating Designated Restricted in Plant Revenues and other additions: Current funds revenue $4,074,287 $ 671,125 $ 768,664 $ Expended for plant facilities (including $105,602 charged to current funds expenditure) Total revenues and other additions 4,074,287 671,125 768,664 Expenditures and other deductions: Current funds expenditures 4,169,021 658,910 759,347 Total expenditures and other deductions 4,169,021 658,910 759,347 Net increase (decrease) for the year (94,734) 12,215 9,317 Fund balances at beginning of year as previously reported (699,251) 276,997 (25,497) Adjustments: (Note 1 & 4) Prior year revenues Prior year expenditures Compensated absences payable Other - 1,261 921 (43,058) (7,198) (3,571) (58,504) (5,759) 12,372 Total adjustments (101,562) (11,696) 9,722 Fund balance at beginning of year as adjusted (800,813) 265,301 (15,775) Fund balance at end of year $ (895,547) $ 277,516 $ (6,458) See notes to financial statements 100 105, ,602 105, ,602 _ 105 ,602 759 ,767 (113 ,683) (113, ,683) 646 ,084 $ 751 ,686 MONTANA COOPERATIVE EXTENSION SERVICE STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES Year Ended June 30, 1985 Unrestricted General Operating Designated Restricted Total Revenues : Federal appropriations $ 1,889,314 $ - $ 384,116 $2,273,430 State appropriations 2,184,973 - 49,908 2,234,881 Federal grants and contracts - - 166,176 166,176 State grants and contracts - - 84,173 84,173 Local grants and contracts - - 29,581 29,581 Private gifts, grants and contracts - - 35,397 35,397 Other sources 1 671,125 9,996 681,121 Total revenues 4,074,287 671,125 759,347 5,504,759 Expenditures : Public service 3,198,364 - 757,260 3,955,624 Institutional support 923,741 - 2,087 925,828 Operation and maintenance of plant 46,916 - - 46,916 Other ■ 1 658,910 ^ 658,910 Total expenditures 4,169,021 658,910 759,347 5,587,278 Transfers and other additions (deductions) : Excess of restricted receipts over transfers to revenue ^ -_ 9,317 9,317 Net increase (decrease) in fund balances $ (94,734) $ 12,215 $ 9,317 $ (73,202) I See notes to financial statements 101 I. / MONTANA COOPERATIVE EXTENSION SERVICE NOTES TO FINANCIAL STATEMENTS June 30, 1985 1 . Summary of significant accounting policies Related parties: Montana State University, Montana Agricultural Experiment Station and Montana Cooperative Extension Service are related through common management and control; however, they are separate and distinct agencies and they receive separate federal and state appropriations. These agencies have certain related-party transactions, including sharing office facilities, management, and accounting and office services. The accounts of Montana Agricultural Experiment Station and Montana State University have not been included in the accompany- ing financial statements. Financial statements: The accompanying financial statements have been prepared on the accrual basis in accordance with generally accepted accounting principles for colleges and universities except as noted hereafter. The statement of current funds revenues and expenditures is a state- ment of financial activities of current funds related to the current reporting period and does not purport to present the results of operations or the net income or loss for the period. Fund balance for unrestricted general operating funds includes $121,476 prior period revenue shortage combined with the unfunded liability of $774,071 for compensated absences payable. Fund balance for restricted current funds includes $23,224 of unearned revenue netted to the unfunded liability of $29,682 for compensated absences payable . Fund accounting: The accounts of the Service are maintained in accordance with the principles of fund accounting wherein resources are classified for accounting purposes into funds that are identified by the limitations and restrictions placed upon their use. Separate accounts are main- tained for each fund, however, accounts with common characteristics are combined into groups and reflected as such in the accompanying financial statements. Inventory: Inventory of paper and supplies are valued at cost (first-in, first- out method) . Plant and equipment: ■ At June 30, 1985, investment in plant was adjusted $113,683 to reflect the totals in the property control subsidiaries. 102 MONTANA COOPERATIVE EXTENSION SERVICE NOTES TO FINANCIAL STATEMENTS June 30, 1985 1. SujTTmary of significant accounting policies (continued) Depreciation : No provision has been made for depreciation of plant facilities in accordance with generally accepted accounting principles for colleges and universities. Allowance for Bad Debts: An allowance for bad debts has not been recorded. Losses from bad debts are recorded as adjustments to revenue in the year in which they are deemed uncollectable . 2 . Investments Investments are carried at cost, which approximates market value; at June 30, 1985, investments consist of the following: Cost Montana short-term investment pool $1,513 $1,513 Investments at June 30, 1985, are owned by the following fund: Current funds : Restricted $1 ,513 $1,513 3 . Retirement plans All of the Service's full-time employees are members of the Montana Public Employees Retirement System, Montana Teachers Retirement System or the U.S. Civil Service Retirement System. Employer con- tributions to these plans totaled $308,371 for the year ended June 30, 1985. The State of Montana retirement plans were determined to be actually sound by the most recent biennial valuations. 4 . Commitments and contingencies Compensated absences payable: As of December 31 of each year, employees can accumulate vacation leave up to twice the number of leave days earned annually and sick leave can be accumulated without limitation. Upon termination, the employee is paid the accumulated vacation leave and 25% of the accumulated sick leave. Vacation and sick leave payments are recorded as an expenditure at the time they are paid to the employee. Due to system limitations, the change in the compensated absences payable amount is stated as an adjustment and not identified with the fiscal period earned or utilized by the employee. 103 / MONTANA COOPERATIVE EXTENSION SERVICE NOTES TO FINANCIAL STATEMENTS June 30, 1985 4. Commitments and contingencies (continued) Leases : The Service reserves the right to limit the amount of expenditures associated with lease contracts without penalty when in the sole judgment of the Service annual funding or program changes necessitate. Capital lease agreements for various purposes and time periods totaling $885, at June 30, 1985, are not added to net investment in plant and not deemed to be material to the overall financial position of the Service. 104 / MONTANA COOPERATIVE EXTENSION SERVICE BALANCE SHEETS Year Ended June 30, 1984 ASSETS CURRENT FUNDS: Unrestricted: General operating Cash Accounts receivable Due from other fund groups Total general operating Designated: Cash Accounts receivable Due from other fund groups Inventories Total designated Total unrestricted $283; ,836 96 ,119 288 ,051 219, 50, 4, 111! ,009 ,376 ,593 ,608 385, ,586 673, ,637 Restricted: Cash Accounts receivable Due from other fund groups Investments (Note 2) PLANT FUNDS Investment in plant: Buildings Equipment Total restricted Total current funds Total plant funds 62, 22, 6, ,468 ,944 ,048 951 92, ,411 S766, ,048 $ 34; 725, ,152 ,615 $759; ,767 See notes to' financial statements 105 / LIABILITIES AND FUND BALANCES CURRENT FUNDS: Unrestricted: General operating: Accrued payroll $229,142 Accounts payable and accrued liabilities 32,750 Due to other fund groups 9,843 Compensated absences payable (Note 4) 715,567 Fund balance (Note 1) (699,251) Total general operating 288 ,051 Designated: Accrued payroll 22,349 Accounts payable and accrued liabilities 38,760 Due to other fund groups 3,011 Compensated absences payable (Note 4) 44,469 Fund balance 276,997 Total designated 385,586 Total unrestricted 673 , 637 Restricted: Accrued payroll 40,004 Accounts payable and accrued liabilities 33,942 Due to other fund groups 1,908 Compensated absences payable (Note 4) 42,054 Fund balance (Note 1) (25,497) Total restricted 92,411 Total current funds $766,048 PLANT FUNDS: Investment in plant: Net investment in plant $759,767 Total plant funds $759,767 106 MONTANA COOPERATIVE EXTENSION SERVICE STATEMENT OF CHANGES IN FUND BALANCES Year Ended June 30, 1984 Unrestricted Plant Funds General Investment Operating Designated Restricted in Plant Revenues and other additions: Current funds revenue $3,930,466 $ 643,619 $ 752,072 $ Expended for plant facilities (including $52,198 charged to current funds expenditure) 2 1 1 52 , 198 Total revenues and other additions 3,930,466 643,619 Expenditures and other deductions: Current funds expenditures 3,886 , 124 617 ,440 Total expenditures and other deductions 3,886,124 617,440 Net increase (decrease) for the year 44,342 26,179 Fund balances at beginning of year as previously reported 2 ,995 326 ,891 Adjustments: (Note 1 & 4) Prior year revenues (1,897) (3,627) (5,206) Prior year expenditures (29,124) (27,977) (6,525) Compensated absences payable (715,567) (44,469) (42,054) Other -_ -_ -_ 15,1?>U Total adjustments (746,588) (76,073) (53,785) 75,784 Fund balance at beginning of year as adjusted (743,593) 250,818 (21,024) 707,569 Fund balance at end of year $ (699,251) $ 276,997 $ (25,497) $ 759,767 3, ,930,466 3, ,886,124 3 ,886,124 44,342 2,995 752. ,072 756, ,545 756, ,545 (4, ,473) 32 ,761 See notes to financial statements 107 52. ,198 _ 52. ,198 631. ,785 MONTANA COOPERATIVE EXTENSION SERVICE STATEMENT OF CURRENT FUNDS REVENUES, EXPENDITURES AND OTHER CHANGES Year Ended June 30, 1984 Unrestricted Revenues : Federal appropriations State appropriations Federal grants and contracts State grants and contracts Local grants and contracts Private gifts, grants and contracts Other sources Total revenues Expenditures: Public service Institutional support Operation and maintenance of plant Other Total expenditures Transfers and other additions (deductions ) : Deficit of restricted receipts over transfers to revenue ^ ^ (4,473) (4,473) Net increase (decrease) in fund balances $ 44,342 $ 26,179 $ (4,473) $ 66,048 General Operating Designated $ Restricted $ 415,107 Total $ 1,793,152 $2,208,259 2,137,314 - 80,442 2,217,756 - - 133,128 133,128 - - 41,884 41,884 - - 37,702 37,702 _ - 48,168 48,168 - 643, 643, ,619 ,619 114 756,545 643,733 3,930,466 5,330,630 3,120,194 _ 755,350 3,875,544 719,365 - 706 720,071 46,565 - _ 46,565 - 617 617 ,440 >40 — 489 756,545 617,929 3,886,124 5,260,109 See notes to financial statements 108 1 MONTANA COOPERATIVE EXTENSION SERVICE NOTES TO FINANCIAL STATEMENTS June 30, 1984 1 . Suminary of significant accounting policies Related parties: Montana State University, Montana Agricultural Experiment Station and Montana Cooperative Extension Service are related through common management and control; however, they are separate and distinct agencies and they receive separate federal and state appropriations. These agencies have certain related-party transactions, including sharing office facilities, management, and accounting and office services. The accounts of Montana Agricultural Experiment Station and Montana State University have not been included in the accompany- ing financial statements. Financial statements: The accompanying financial statements have been prepared on the accrual basis in accordance with generally accepted accounting principles for colleges and universities except as noted hereafter. The statement of current funds revenues and expenditures is a state- ment of financial activities of current funds related to the current reporting period and does not purport to present the results of operations or the net income or loss for the period. Fund balance for unrestricted general operating funds includes $9,123 allocated for encumbrances and $7,193 prior period revenue overage netted to the unfunded liability of $715,567 for compensated absences payable. Fund balance for restricted current funds includes $16,557 of unearned revenue netted to the unfunded liability of $42,054 for compensated absences payable. Fund accounting: The accounts of the Service are maintained in accordance with the principles of fund accounting wherein resources are classified for accounting purposes into funds that are identified by the limitations and restrictions placed upon their use. Separate accounts are main- tained for each fund, however, accounts with common characteristics are combined into groups and reflected as such in the accompanying financial statements. Inventory: Inventory of paper and supplies are valued at cost (first-in, first- out method) . Plant and equipment: At June 30, 1984, investment in plant was adjusted $75,784 to reflect the totals in the property control subsidiaries. 109 MONTANA COOPERATIVE EXTENSION SERVICE / NOTES TO FINANCIAL STATEMENTS June 30, 1984 1. Summary of significant accounting policies (continued) Depreciation: No provision has been made for depreciation of plant facilities in accordance with generally accepted accounting principles for colleges and universities. Allowance for Bad Debts: An allowance for bad debts has not been recorded. Losses from bad debts are recorded as adjustments to revenue in the year in which they are deemed uncollectable . 2. Investments Investments are carried at cost, which approximates market value; at June 30, 1984, investments consist of the following: Cost Montana short-term investment pool $951 $951 Investments at June 30, 1983 are owned by the following fund: Current funds: Restricted $951 $951 3 . Retirement plans ' All of the Service's full-time employees are members of the Montana Public Employees Retirement System, Montana Teachers Retirement System or the U.S. Civil Service Retirement System. Employer con- tributions to these plans totaled $320,946 for the year ended June 30, 1984. The State of Montana retirement plans were determined to be actually sound by the most recent biennial valuations. 4. Commitments and contingencies Compensated absences payable: As of December 31 of each year, employees can accumulate vacation leave up to twice the number of leave days earned annually and sick leave can be accumulated without limitation. Upon termination, the employee is paid the accumulated vacation leave and 257o of the accumulated sick leave. Vacation and sick leave payments are recorded as an expenditure at the time they are paid to the employee. Previous financial reports have disclosed the leave liability only as a footnote. In accordance with generally accepted accounting principles the liability as of June 30, 1984 has been recorded for the first time as a liability of the applicable fund group. 110 MONTANA COOPERATIVE EXTENSION SERVICE NOTES TO FINANCIAL STATEMENTS June 30, 1984 Commitments and contingencies (continued) Leases : The Service reserves the right to limit the amount of expenditures associated with lease contracts without penalty when in the sole judgment of the Service annual funding or program changes necessitate. Lease agreements for various purposes and time periods, at June 30, 1984, are not deemed to be material to the overall financial position of the Service. Ill AGENCIES RESPONSE Montana State University Bozeman, Montana 59717 Office of the President May 21, 198 6 Telephone (406) 994-2341 Scott A. Seacat Legislative Auditor Capitol Building, Room Helena, MT 59620 Dear Mr. Seacat: 135 RECEIVED ptiAY 2 Y 1955 MONTANA LEGISLATIVE AUDITOR The r recoitimenda Montana St Agricultur fiscal yea reflected recommenda as effic maintainin Federal re esponses of Montana State University to the audit tions made relative to the audit report on the ate University, Cooperative Extension Service, and al Experiment Station financial activity for rs 1983-84 and 1984-85 are submitted herewith. As by the number and magnitude of the audit tions, we are continuing in our efforts to operate iently and effectively as possible, while g compliance with the multitude of State and gulations which govern our activities. The evidence of our sound and responsible financial and business management is contained in the audit report. As we continue to make progress in our business affairs, we are •proud to play an active part in assisting and cooperating with the Commissioner's Office and the Board of Regents in resolving the audit issues raised and in improving communications and the relationships between the University System and the Legislature. Your staff v/ho performed this audit were all of personal and professional quality and our staff was able to work with them in a personable and professional manner. We look forward to meeting with the Audit Committee to discuss the audit report and our responses and any other issues which may be of interest to you. Sincerely, William J President Tietz TG:ds ia/1 RECOMMENDATION #1: WE RECOMMEND THE UNIVERSITY REPORT STUDENT FTE IN ACCORDANCE WITH REGENTS' POLICY. RESPONSE #1: WE CONCUR WITH THIS RECOMMENDATION. However, we believe that we were correct in our interpretation of the funding formula guidelines which clearly show the Military Science component. However, we have referred this matter to the Office of the Commissioner of Higher Education for evaluation and request a clarification based upon their interpretation. RECOMMENDATION #2: WE RECOMMEND THE UNIVERSITY FOLLOW STATE PURCHASING LAWS AND POLICIES. RESPONSE #2: WE CONCUR WITH THIS RECOMMENDATION. The Multilith Department of the Cooperative Extension Service (CES) has again submitted a request to the State Department of Administration, requesting delegated purchasing authority up to $30,000 for the purchase of paper. The granting of that level of purchasing authority will aid in Multilith' s efforts to obtain higher quality, lower cost paper in a more timely manner than is currently available through State Central Stores. RECOMMENDATION #3: WE RECOMI-IEND THE UNIVERSITY REQUEST FEDERAL MONIES IN A MANNER WHICH WILL MINIMIZE THE NECESSITY FOR THE STATE TO ADVANCE CASH TO FEDERAL PROGRAMS. RESPONSE #3: WE CONCUR WITH THIS RECOMMENDATION. At the time this matter was first brought to our attention, the Federal funds were being ordered the first of each month on a reimbursement basis. The payroll which occurs on the eleventh of each month constitutes the great majority of Federal funds ordered on a monthly basis. Thus, in June 1985, a directive was issued which changed the order date for Federal funds to the fifteenth of each month, after the main monthly payroll. RECOMMENDATION #4: WE RECOMMEND THAT THE UNIVERSITY ESTABLISH PROCEDURES TO FORECAST CASH NEEDS TO ENSURE POSITIVE CASH BALANCES ARE MAINTAINED IN COMPLIANCE WITH STATE LAWS. 1 13 I RESPONSE #4: WE CONCUR WITH THIS RECOMMENDATION. This is an issue of conflicting State Statutes which is being addressed by the State Department of Administration. RECOMMENDATION #5: WE RECOMMEND THE UNIVERSITY: A. ACCRUE EXPENDITURES IN ACCORDANCE WITH STATE ACCOUNTING POLICIES. B. CORRECT INVALID EXPENDITURE ACCRUALS. RESPONSE #5: WE CONCUR WITH THIS RECOMMENDATION. We make every reasonable effort to fully comply with State accounting policies which relate to expenditure accruals. The invalid expenditure accruals will be corrected prior to this fiscal year end. RECOMMENDATION #6: WE RECOMMEND THE UNIVERSITY DEPOSIT RECEIPTS ON A TIMELY BASIS IN ACCORDANCE WITH STATE LAW. RESPONSE #6: WE CONCUR WITH THIS RECOMMENDATION. The CES administration will work directly with the department involved to ensure proper and more timely deposits of receipts. RECOMMENDATION #7: WE RECOMMEND THE UNIVERSITY: A. IMPROVE CONTROLS TO ENSURE ALL ITEMS DISPOSED OF AND ALL INVENTORIES ARE DELETED FROM ITS PROPERTY RECORDS. B. ENSURE ALL STATE EQUIPMENT ITEMS ARE TAGGED AS STATE PROPERTY. RESPONSE #7: WE CONCUR WITH THIS RECOMMENDATION. We are taking every action possible within our limited resources to ensure the accuracy of the property listing. We are also continuing in our efforts to identify and tag State property which was not properly tagged in years past . 114 THE MONTANA UNIVERSITY SYSTEM 33 SOUTH LAST CHANCE GULCH HELENA, MONTANA 59620-2602 (406) 444-6570 COMMfSSIONER OF HIGHER EDUCATION , .cX-'^J vcu MAY 2 7 i955 MONTANA LEGISLATIVE AUDITOR May 23, 1986 Scott A. Seacat Legislative Auditor Room 135, State Capitol Helena, Montana 59620 Dear Mr. Seacat, The response for the Montana State University audit is attached. I appreciate the opportunity that you provide for my staff to participate in all entrance and exit conferences. Sincerely, O^ .^ ^/- Carrol Krause Commissioner of Higher Education CK/JHN/llt Attachment 115 THE MONTANA UNIVERSITY SYSTEM CONSISTS OF THE UNIVERSITY OF MONTANA AT MISSOULA, MONTANA STATE UNIVERSITY AT BOZEMAN, MONTANA COLLEGE OF MINERAL SCIENCE AND TECHNOLOGY AT BUTTE, WESTERN MONTANA COLLEGE AT DILLON, EASTERN MONTANA COLLEGE AT BILLINGS AND NORTHERN MONTANA COLLEGE AT HAVRE. RECOMMENDATION #1 We recommend the University report student FTE in accordance with Regents policy. Agency Response: Concur . Vie will review the reporting criteria for restricted credit hours as they would pertain to military science programs and revise our practice if necessary. A few additional facts are relevant to the auditor's finding. 1. The study that established the funding formula for higher education in 1981 included military science in the unre- stricted portion of the formula (see page 39 of the Final Report) . 2. While the salaries of the faculty are paid directly by the military, the state must pick up the other program costs and provide the facilities. The student must pay the tuition costs for the enrolled credit hours and the tuition revenue is deposited in the unrestricted funds as general fund offset. If we are going to treat the student credit hour production as restricted, the tuitions collected must also be segregated into the restricted account. 16 '^1