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| Core Requirement: | 2.11 | |
| The institution has a sound financial base, demonstrated financial stability, and adequate physical resources to support the mission of the institution and the scope of its programs and services. The member institution provides the following financial statements: | ||
| Institutional Audit | ||
| (a) an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a system wide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate audit (or Standard Review Report) guide; | ||
| Compliance Rating: | (a) Partial-Compliance |
| Statement of Compliance: The University of Texas-Pan American cannot provide the following financial statement: “an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a system wide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate audit (or Standard Review Report) guide.” The required fiscal year 2006 audit was not available as of the date of submission of the Compliance Certification. The State Auditors’ Office has been contacted to schedule the required Standard Review Report. |
| Narrative: The Texas Government Code, Section 321.013 (a) describes the powers and duties of the state auditor as “The State Auditor shall conduct audits of all departments, including institutions of higher education, as specified in the audit plan.” |
| To demonstrate that The University of Texas-Pan American (UTPA) has a sound financial base and financial stability, the State of Texas Auditor’s Office conducts a yearly review of the state’s financial statements, which includes UTPA, and issues a Standard Review Report and an institutional management letter at the State level. For FY 2003, FY 2004, and FY 2005, there were no significant findings in UTPA’s financial statements. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The fiscal year 2005 Statewide Single Audit Report has been completed and is available on the State Auditor’s Office website. The audit indicated that after the University became a full participant in the use of the U.S. Department of Education’s Common Origination and Disbursement (COD) System for the 2004-2005 award year, it had difficulty with the new COD software. As a result, COD disbursements were reported more than 30 days after the University made the payments to the students. The Student Financial Aid Office was aware of the condition, and the issue was resolved prior to the audit. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the fiscal year ended August 31, 2005, Deloitte & Touche conducted an audit of the University’s financial statements which demonstrated that UTPA has a sound financial base and financial stability. The audit was required by UT System Board of Regents and performed by Deloitte & Touche with the assistance of UTPA’s Office of Internal Audits. In addition to the System-wide Report, the UTPA Management Letter was also prepared and issued. The purpose of the audit was to express an opinion on the financial statements. Based on procedures performed by the Office of Internal Audits, as directed by Deloitte & Touche, there were no material differences to report. The audit identified several areas in financial reporting that could be improved, and the Office of the Comptroller has addressed the following: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| To further demonstrate that the University has a sound financial base and financial stability, the State Auditor’s Office will perform the SACS required Financial Review for the year ending August 31, 2006. The results of this audit will be available for the SACS on-site visit in April 2007. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Statement of Financial Position | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| The University’s financial statements supplement the published Annual Financial Report of The University of Texas System. The Annual Financial Report for public distribution for The University of Texas System includes primary statements on a combined, System-wide basis, complete with explanatory notes and additional commentaries, graphic data, and other information, for the benefit of officials of the University and the State and Federal governments, and for the interested public at large. These financial statements demonstrate that the University has a sound financial base and financial stability. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The table below displays a three-year analysis of Unrestricted Net Assets as evidence of the University’s financial position. Although the University experienced an increase of $6.5 million in unrestricted net assets from 2003 to 2004, in 2005, this number decreased by $6.2 million as a result of unallocated funds being utilized for the purchase of the Oracle software and additional land to expand campus space. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| To prove that UTPA has a sound financial base, the University provides financial information to UT System on an annual basis that is used to determine the institution’s financial stability. UT System prepares the Analysis of Financial Condition (AFC) for all UT components using the institution’s Annual Financial Report’s Balance Sheet and Statement of Revenues, Expenses, and Changes in Net Assets. A three-year analysis is included in SACS Comprehensive Standard 3.10.1, paragraphs 1 and 2, under the Financial Stability section. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| To further demonstrate that the University has a sound financial base and financial stability, a Statement of Unrestricted Net Assets and the Analysis of Financial Condition will be included in the State Auditors Financial Review for the period ending August 31, 2006, and will be available for the SACS on-site visit in April 2007. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The University also demonstrates that it has a sound financial base and financial stability by the steady increase in the total market values for University and Foundation-held endowments between 1982 and 2005 as displayed in the table below. A more comprehensive discussion is included in SACS Comprehensive Standard 3.10.1, under the Endowment Management Policies and Implementation section. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Similarly, the table below indicates UTPA has seen an increase in tuition and fees revenue between 2003 and 2005. From 2003 to 2004, there was a 9.62% increase in tuition and fees net of discounts and allowances. In 2005, the tuition and fees revenue increased by 9.95%. This increase in revenue demonstrates the University’s financial stability. More details are included in SACS Comprehensive Standard 3.10.1, under the Financial Stability section. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Budgeted Faculty Salaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FY 2004: $31,954,346 FY 2005: $36,501,127 FY 2006: $40,531,034 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| The University has demonstrated that it possesses adequate physical resources by maintaining and operating facilities both on and off campus that are adequate to support the mission of the institution and the scope of its programs and services described in SACS Comprehensive Standard 3.10.7 on the operation and maintenance of physical facilities. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annual Budget | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| During the budget process itself broad participation continues. For example, the Student Affairs Advisory Council makes specific recommendations to the President regarding the use of student service fees. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UTPA budget planning is based on the concept of continual improvement and incorporates institutional policy, the University of Texas System Administration budget rules and budget instructions as authorized by the Board of Regents. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| In even-numbered (legislative) years, University administrators prepare for and attend joint hearings conducted by the Legislative Budget Board and the Governor’s Office of Budget and Planning. A typical budget year at UTPA has the Budget Office reviewing and updating University budget guidelines and distributing these draft guidelines to division heads for feedback and adjustment. Once final, the operating budget guidelines are distributed to all participants in the budget process with the flow of funding requests moving from the bottom up. These are the dates and events for a typical cycle timeline for both the FY 2006 budget and the FY 2007 budget. The President communicates over-arching expectations regarding the coming budget process to the vice presidents, as evidenced in the FY 2006 memo and the FY 2007 memo. During this start-up phase and as needed throughout the budget cycle, the Executive Council (a group consisting of the President and each division head) and the Budget Director will discuss the context of the budget development process, focusing on anticipated revenue and expense pressures. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The final budget is approved by the Board of Regents, and the operating budget is filed in the University library and is also made available electronically on the institution’s state reports website. Copies are filed with the Legislative Budget Board, the Texas governor, and the Texas Higher Education Coordinating Board, as required by law, by UT System on behalf of the UT institutions. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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