Financial report of the University of North Carolina at Wilmington

1985-86

The University of North Carolina at Wilmington

rolirta at Wilmington is committed to equality of educational opportunity and does not discriminate
or employees based on race, color, national origin, religion, sex, age, or handicap. Moreover, The
Carolina at Wilmington is open to people of all races and actively seeks to promote racial integration by
lling a larger number of black students.

Financial Report 1985-86

The University of North Carolina at Wilmington

Contents

Letter of Transmittal 2

Enrollment 3

Source of Current Funds 4

Use of Current Funds 5

Balance Sheet 6

Opinion on Financial Statements 6

Statement of Changes in Fund Balances 8

Statement of Current Funds Revenues, 1 0
Expenditures, and Other Changes

Notes to Financial Statement 14

A Letter of Transmittal

To the Chancellor:

Transmitted herewith are the university's financial statements for the
fiscal year ending June 30, 1986. The expansion of the university's
enrollment and programs are reflected in the dollar figures contained in
these statements. University assets increased by $9,288,000 during the
past fiscal year. Fund equity increased by $10,850,000. This increase in
equity of $1,562,000 over our increase in assets reflects our ability to
reduce liabilities during the past fiscal year. Our total equity on June
30, 1986 was $61,502,000. The financial strength of the university has
been enhanced during fiscal year 1985-86.

The Business Affairs Division will continue to work with the other
divisions of the university, UNC General Administration, university
benefactors, federal agencies, and state government to ensure that
financial and physical resources are available to support the university's
primary functions of instruction, research, and public service.

I would like to take this opportunity to thank you, the Board of
Trustees, and my fellow vice chancellors for your support over the past
fiscal year.

Very truly yours,

R.O. Walton, Jr.

Vice Chancellor for Business Affairs

Enrollment

UNCW Enrollment
1977-1986

6000 -r

5000 - -

4000 - -

3000 --

2000 - -

1000 - -

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986

i Full Time Equivalent □ Headcount

Sources of Current Funds

Year 1985-1986

State Appropriations 53.58%

Sales and Services 17.25%

Gifts, Grants, Contracts 7.38%

Tuition and Fees 17.63%

Total Current Funds Revenue $37,047,100

Uses of Current Funds

Year 1985-1986

Instruction & Research 51.50%

Auxiliary Enterprises 20.16%

Financial Aid 5.30%

Physical Plant 8.78%

Institutional Support
10.52%

Student Services 3.74%

Total Current Funds Expenditures $35,106,640

Balance Sheet

June 30, 1986

Opinion on Financial Statements

The enclosed balance sheet, statement of
changes in fund balances and statement
of current funds revenues, expenditures,
and other changes along with the
appertaining notes for The University of
North Carolina at Wilmington have been
reviewed by me and fairly represent the
financial position of the University on
June 30, 1986 and the results of
operations for the fiscal year then ended.

The statements are presented in general
conformity with the guidelines outlined in
the Industry Audit Guide, published by
the American Institute of Certified Public
Accountants, Second Edition.

Timothy A. Jordan
Assistant Vice Chancellor for
Business Affairs - Finance

Assets

Cash

Investments

Deposits with trustees

Accounts and notes receivable,

less allowance of $68,111
Inventories, at cost using first in-first out
Prepaid Expenses and deferred charges
Land

Land improvements
Buildings
Equipment
Library books
Construction in Progress

Total assets

Liabilities

Accounts payable

Accrued liabilities

Students' deposits

Due to other funds

Deferred credits

Notes payable

Capital leases payable

Bonds payable

Deposits held in custody for others

Total liabilities

Fund Balance

Unrestricted

Restricted

Endowment

Quasi- endowment-unrestricted

Quasi-endowment-restricted

Plant Funds

Total fund balances

Total liabilities and Fund balance

Current Funds

Loan
Funds

Endowment
Funds

Plant
Funds

Agency

Unrestricted

Restricted

Funds

$3,852,786

$352,417

$ 55,870

1,008

$ 4,916,144

$ 13,871
534,777

2,610,732

2,138,775

495,322

350,971

336,425

1,017,544

230,100

12,320

813,928

15,000
582,607
2,724,245
36,248,895
8,545,588
9,411,426
4,247,460

15,600

$5,017,685

$688,842

$1,073,414

$2,841,840

$68,842,460

$1,059,570

$ 105,707

$ 833

$ 301

$ 385,907

$ 25

682,777

20,533

300

421,021

496,096

39,131

1,428
57,407

30,529

2,858,370

862,057

11,000,000

1,059,545

1,323,711

80,201

601

0

15,557,884

1,059,570

3,693,974

608,641

1,072,813

1,221,359

1,450,049

170,432

53,284,576

3,693,974

608,641

1,072,813

2,841,840

53,284,576

0

$5,017,685

$688,842

$1,073,414

$2,841,840

$68,842,460

$1,059,570

The accompanying notes are an integral part of the financial statements.

Statement of Changes in Fund Balances

For Year Ended June 30, 1986

Current Funds

Unrestricted

Restricted

Revenues and Other Additions
Unrestricted current fund revenues
State appropriations- restricted
Federal grants and contracts- restricted
State grants and contracts-restricted
Private gifts, grants, and contracts- restricted
Investment income- restricted
Endowment Income
Realized gains on investments
Proceeds from notes and bonds issued
Expended for plant facilities (including

$5,105,481 charged to current funds

expenditures)
Retirement of indebtedness
Other revenues
Other additions

$34,557,551

2,054,456

149,394

235,205

90,191

(39,697)
251,314

Total revenues and other additions

34,557,551

2,740,863

Expenditures and Other Deductions

Educational and general expenditures

Auxiliary enterprises expenditures

Indirect cost recovered

Expended for plant facilities

Retirement of indebtedness

Interest on indebtedness

Disposal of plant facilities

Notes and Bonds Issued

Other expenditures and deductions

25,540,970
7,076,121

2,489,549
127,121

Total expenditures and deductions

32,617,091

2,616,670

Transfers Between Funds
Mandatory:

Principal and interest
Renewals and replacements
Loan Fund Matching
Unrestricted funds allocated

(2,663,418)

(44,083)

(26,697)

(806,298)

600

Total Transfers

(3,540,496)

600

Net increase/ (decrease) for year
Fund balance at beginning of year

(1,600,036)
5,294,010

124,793
483,848

Fund balance at end of year

$ 3,693,974

$ 608,641

*Debt Service includes the Reserve for Renewal and Replacement of $590,131.
This reserve is comprised of liquid assets only.

Endowment
and Similar

Plant

Loan

Debt

Investment in

Funds

Funds

Unexpended

Service

Plant

240,272
912

7,520,453
29,163

24,640

1,035
12,103

58,612

15,575
81,734

5,000
52,202

172,005
2,140,000

7,015,568
3,931,125

20,762

254,322

155,921

7,606,818

2,336,645

10,967,455

35,379

15,575

5,105,480

8,899

3,710,141
1,193,631

4,934

303,092
2,158,498

35,379

15,575

5,114,379

4,908,706

2,461,590

26,697

20,885

(50,652)
784,813

2,714,070
44,083

26,697

20,885

734,161

2,758,153

245,640
827,173

161,231
2,680,609

3,226,600
1,260,788

186,092
1,571,302

8,505,865
38,533,930

$1,072,813

$2,841,840

$4,487,388

$1,757,394*

$47,039,795

The accompanying notes are an integral part of the financial statements.

Statement of Current Funds Revenues,
Expenditures, and Other Changes

For Year Ended June 30, 1986

Revenues

Educational and General:

Student Tuition and Fees
State Appropriations
Federal Grants and Contracts
State Grants and Contracts
Private Gifts, Grants and Contracts
Endowment Income
Investment Income
Other Sources

Total Educational and General
Auxiliary Enterprises

Total Current Funds Revenues

Expenditures and Mandatory Transfers
Educational and General:

Regular Term Instruction
Summer Term Instruction
Extension Instruction
Public Service
Organized Research
Libraries

General Academic Support
Student Services
Institutional Support
Physical Plant Operations
Student Financial Aid

Educational and General Expenditures

Statement continues on pgs. 12-13.

10

Current Year

Total

Unrestricted

Restricted

Prior Year Total

$ 4,556,911.88

$ 0.00

$ 4,556,911.88

$ 3,696,017.16

19,849,354.24

0.00

19,849,354.24

17,391,350.33

156,351.08

2,054,456.25

2,210,807.33

2,161,844.18

2,050.43

149,394.18

151,444.61

97,892.65

62,715.37

235,205.26

297,920.63

305,767.90

193,364.10

51,685.34

245,049.44

227,821.76

85,974.98

38,505.14

124,480.12

121,219.05

317,549.94

(39,697.05)

277,852.89

282,932.46

25,224,272.02

2,489,549.12

27,713,821.14

24,284,845.49

9,333,278.67

0.00

9,333,278.67

8,114,661.14

34,557,550.69

2,489,549.12

37,047,099.81

32,399,506.63

12,593,878.01

204,905.04

12,798,783.05

11,372,904.32

831,709.40

0.00

831,709.40

725,159.27

174,066.62

0.00

174,066.62

187,531.14

30,447.67

0.00

30,447.67

52,643.73

612,196.83

707,521.69

1,319,718.52

1,498,485.96

1,795,033.78

96.19

1,795,129.97

1,362,023.86

1,130,408.08

100.00

1,130,508.08

898,409.16

1,313,228.11

0.00

1,313,228.11

1,127,071.06

3,682,209.24

12,888.83

3,695,098.07

3,186,396.50

3,081,274.58

0.00

3,081,274.58

2,608,829.96

296,517.91

1,564,037.37

1,860,555.28

1,511,333.42

$25,540,970.23

$2,489,549.12

$28,030,519.35

$24,530,794.38

11

Statement of Current Funds Revenues,
Expenditures, and Other Changes

For Year Ended June 30, 1986

Expenditures and Mandatory Transfers (Cont'd)
Mandatory Transfers for:

Principal and Interest
Loan Fund Matching

Total Education and General Expenditures and Mandatory Transfers

Auxiliary Enterprises:

Expenditures
Mandatory Transfers for:

Principal and Interest

Renewals and Replacements

Total Auxiliary Enterprises

Total Current Funds Expenditures and Mandatory Transfers

Other Transfers In/(Out), Additions and (Deductions)

Net Restricted Receipts over Deductions

Not Counted as Revenues
Allocation to Endowment Funds
Other Transfers

Total Other Transfers In/ (Out),
Additions and (Deductions)

Net Increase (Decrease) in Fund Balance

12

Unrestricted

Restricted

Total

Prior Year Total

$ 8,134.52
26,696.86

$ 0.00
0.00

$ 8,134.52
26,696.86

$ 8,502.00
19,252.00

25,575,801.61

2,489,549.12

28,065,350.73

24,558,548.38

7,076,121.11

2,655,283.78
44,083.03

0.00

0.00
0.00

7,076,121.11

2,655,283.78
44,083.03

5,489,002.11

1,631,097.49
99,933.00

9,775,487.92

0.00

9,775,487.92

7,220,032.60

35,351,289.53

2,489,549.12

37,840,838.65

31,778,580.98

0.00
(20,885.00)
(785,412.62)

124,193.10

0.00

600.00

124,193.10

(20,885.00)

(784,812.62)

102,232.42
(20,140.27)
(396,090.75)

(806,297.62)

124,793.10

(681,504.52)

(313,998.60)

($ 1,600,036.46)

$ 124,793.10

($ 1,475,243.36)

$ 306,927.05

The accompanying notes are an integral part of the financial statements.

13

Notes to Financial Statements

1. Summary of Significant
Accounting Policies:

Reporting Entity

Basis of Presentation

Fund structure

Basis of Accounting

General Fixed Assets and
Depreciation

Cash and Cash Equivalents

The accompanying financial statements present all funds under the authority of
the University. The basic criterion for inclusion is the exercise of oversight
responsibility. Oversight responsibility is derived from the ability to significantly
influence operations and accountability for fiscal matters. Related Foundations
and similar non-profit corporations are not part of the University reporting
entity and are not included in the accompanying financial statements.

The accompanying financial statements are presented on a fund basis and
generally follow the form recommended by the National Association of College
and University Business Officers (NACUBO) and the American Institute of
Certified Public Accountants in its Industry Audit Guide, Audits of Colleges
and Universities.

The accompanying financial statements are structured into three categories of
funds: Current, Fiduciary, and Plant Funds.

The Current Funds are used to account for all financial transactions of the
general operations of the University, with the unrestricted and restricted funds
shown separately. Also, the proprietary funds reflecting the operations of the
Bookstore, dormitories, and other auxiliary enterprises and internal service
funds are shown separately from the other University unrestricted funds.

The Fiduciary Funds are used to account for the Student Loan Funds,
Endowment Funds, and Agency Funds held by the University. The Agency
Funds are those funds of students and organizations held by the University as
custodian. The transactions of the Agency Funds do not result in any revenue
or expenditures for the University; therefore, these funds are not reflected in
the statement of changes in fund balances.

The Plant Funds are used to account for the Unexpended Plant Funds, Debt
Service funds, and the Investment in Plant Funds. The Debt Service funds
include the Repair and Replacement reserves, as well as the reserves for
Retirement of Indebtedness.

The accounting records of The University of North Carolina at Wilmington are
maintained on the cash basis of accounting throughout the year, but
adjustments are made at fiscal year- end to convert to generally accepted
principles of accounting for colleges and universities. The generally accepted
basis of accounting for colleges and universities is the accrual basis, except that
no depreciation expense is reflected.

All fixed assets are reflected as expenditures of the fund when purchased in the
year of acquisition. The fixed assets acquired are reflected as an addition to the
Investment in Plant Funds and carried at the cost of acquisition until disposed
of. No depreciation is reflected.

In addition to cash on deposit with the State Treasurer, bank accounts, petty
cash, and undeposited receipts, this classification includes all short-term
investments, such as savings accounts and certificates of deposit.

14

Deposits with Trustees

Investments

Receivables and Allowances for
Doubtful Accounts

Inventories

2. Pension Plans:

3. Insurance:

4. Commitments and Contingencies:

Vacation and Sick Leave

This account reflects all cash deposited with the Fiscal Agents for investment
on behalf of the University.

This classification includes a long-term fixed income investment and equity
investments held by the University. The investments purchased are valued at
cost and investments received by gift are valued at the fair market or appraised
value at the date of the gift, unless there has been an impairment of value not
considered to be temporary. At June 30, 1986, the market value of capital
stock held by the Endowment Fund was $5,697.75.

The receivables, except for NDSL notes receivables, are reflected in the
accompanying financial statements at book value with no provision for doubtful
accounts. NDSL notes receivable are reflected at net value with an allowance
for doubtful accounts in the amount of $68,111.00. With the above-noted
exception, the University used the direct write-off method of expensing all
accounts deemed uncollectible at June 30 each year.

Inventories held by the University are priced at cost using the First- In, First-
Out Method. The inventories for the General Restricted Current Funds consist
of expendable supplies, gasoline and fuel oil held for consumption. Inventories
for the Preprietary Funds consist of textbooks and merchandise for resale, as
well as expendable supplies held for consumption.

Each permanent full-time employee, as a condition of employment, is a
member of the North Carolina Teachers' and State Employees' Retirement
System, although eligible faculty of the University may elect to become
members of the Teachers' Insurance and Annuity Association (TIAA-CREF), a
privately administered retirement plan. Employees contribute six per cent of
gross wages with the University matching with an 11.20% contribution to the
North Carolina Teachers' and State Employees' Retirement System. The
employees participating in the Teachers' Insurance and Annuity Association
retirement plan contribute six per cent of gross wages with the employer
matching also being six per cent. The University has no pension plan
obligations beyond the matching already paid into the retirement systems. The
University contributed $1,669,762.09 as matching pension costs during
the year.

The State maintains a State Property Fire Insurance Fund as a means of self-
insurance against fire losses which may occur in State-owned buildings.

The University, in accordance with State policy, records the costs of vacation
and sick leave when taken and paid, rather than when the leave is earned.
State policy provides for a maximum -accumulation of unused vacation leave of
30 days which can be carried forward each January 1st for which an employee
can be paid upon termination of employment with the State. Under this policy,
the accumulated vacation leave for each employee at June 30 would equal the
leave carried forward at the previous December 31, plus the leave earned and
less the leave taken between January 1 and June 30. The accumulation of
unused sick leave earned is unlimited, but the employee cannot be
compensated for any unused sick leave upon termination of employment.
Consequently, at June 30, 1986, the University had an actual, but unrecorded,
liability for unused vacation leave in the amount of $737,230.00, and a
contingent liability for the unused sick leave in the amount of $1,473,146.00
based on salary rates effective June 30, 1986, including matching benefits for
retirement and social security.

15

Leases

5. Changes in Plant Fixed Assets:

6. Long-Term Obligations:

Capital leave obligations relating to (type of facility or equipment) are recorded
at the present value of the lease payments. Leased assets included in the Plant
Funds amounted to $1,386,662.26 at June 30, 1986.

Fiscal Year Capital Leases

Operating Lease

1987

$ 311,690.23

$ -o-

1988

311,388.61

-0-

1989

300,959.12

-0-

1990
tits:

Payments

in the fixed asset

83,956.31

1,007,994.27

145,937.58

-0-

Total Minimum Lease Payme

$ -o-

Amount Representing Interest

Present Value of Future Lease

$ 862,056.69

A summary of changes

s is presented as follows:

Balance

July 1, 1985

Additions Deletions

June 30, 1986

Land

$ 582,606.94

$ -0- $ -0-

$ 582,606.94

Land Improvements

2,188,437.21

535,807.78 -0-

2,724,244.99

Buildings

31,677,600.39

4,926,652.46 355,358.13

36,248,894.72

Machinery & Equipment

7,659,222.78

1,082,858.10 196,492.23

8,545,588.65

Library Books

8,618,206.13

795,209.72 1,989.88

9,411,425.97

Construction in Progress

4,300,910.29

4,959,590.57 5,013,040.46

4,247,460.40

Total

$55,026,983.74 $12,300,118.63 $5,566,880.70

$61,760,221.67

A summary of changes in the long-term obligations (principal only) is presented
as follows:

Bonds Payable
Notes Payable
Capital Leases

Total Long-Term Obligation

Interest

3.0-11.4
5.0-9.95
6.6-8.6

Balance
July 1, 1985

$ 9,715,000
5,713,510
1,064,544

Additions

$1,500,000

640,000

18,498

Balance
Deletions June 30, 1986

$ 215,000 $11,000,000

3,495,140 2,858,370

220,985 862,057

$16,493,054 $2,158,498 $3,931,125 $14,720,427

The University bonded indebtedness arises from issues to construct dormitory,
dining, and physical education facilities and are payable from pledged student
fees as provided by the Bond Resolutions. Principal payments are made on
January 1 of each year in increasing amounts that are sufficient to retire the
bonds by January 1, 2010. Interest is paid on January 1 and July 1 of each year
at rates varying from 3% to 11.4% APR. The University receives an annual
debt service subsidy grant in the amount of $24,640.00 from the United States
Department of Housing and Urban Development with respect to the Dormitory
and Dining Hall Series B Bonds. The bonds are further secured by reserve
requirements as provided in the Bond Regulations, totaling $1,616,127.03 at
June 30, 1986. The University was in compliance with all reserve requirements
as of June 30, 1986.

The schedule that follows shows the annual requirements to pay principal and
interest on the long-term obligations outstanding at June 30, 1986.

Revenue Bonds

Notes

Capital Leases

1987

$ 1,028,811.00

$ 693,590.79

$ 311,690.23

1988

1,111,830.00

476,640.74

311,388.61

1989

1,097,900.00

444,842.50

300,959.12

1990

1,103,100.00

419,416.33

83,956.31

1991

1,101.035.00

387,949.23

-0-

1992-1996

5,441,410.00

1,523,934.56

-0-

1997-2001

5,607,210.00

163,241.00

-0-

2002-2006

3,737,550.00

-0-

-0-

2007-2011

1,180,050.00
$21,408,896.00

-0-

-0-

Total Requirements:

$4,109,615.15

$1,007,994.27

16

ARCHIVE COLLECTION

RANDALL LIBRARY

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RANDALL LIBRARY - UNCW

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Board o£ Trustees

B.D. Schwartz

Chairman

F. P. Fensel
Vice Chairman

Betty H. Cameron
Secretary

W. Albert Corbett
Bishop Ruben L. Speaks
John D. Warlick, Jr.
Eugene E. Wright, Jr.s M.D.
John J. Barney, Jr.
John B. Codington, M.D.
Margaret F. Heyward
John D. Merritt
Justin Raphael

Senior Officers

William H. Wagoner
Chancellor

Charles L. Cabill

Provost and Vice Chancellor for

Academic Affairs

R. O. Walton, Jr.
Vice Chancellor for Business Affairs

F. Douglas Moore
Vice Chancellor for University Advancement

William A. Bryan
Vice Chancellor for Student A