Agenda Item No. IV. D. 4.
Washburn University Board of Regents
SUBJECT: Quarterly Report for Quarter Ended December 31, 2004
The Comparative Statements of Revenues and Expenditures - General Fund for the six months ended December 31, 2004 and 2003 is attached along with Notes to Quarterly Financial Statements for December 31, 2004 are attached. Also attached are The Statement of Revenues and Expenditures - General Fund for the six months ended December 31, 2004 and December 31, 2003, respectively for additional comparative purposes.
None. Revenues and expenditures are in line with current year budgets and relative comparisons to last year. Please refer to the Notes to Quarterly Financial Statements for December 31, 2004 for explanations of significant variances.
President Farley recommends the Board of Regents accept the Quarterly Report for the Quarter Ended December 31, 2004.
Date Jerry B. Farley, President
1. TUITION AND FEES
The increase in tuition and fees in the six months ended December 31, 2004 compared to the corresponding period ended December 31, 2003 is due to the implementation of the Banner student module, specifically enrollment, fee assessment and student accounts receivable.
In the legacy system, tuition and fees were assessed to students at enrollment, not when they signed up for classes. As a result, the majority of tuition and fee revenue was recorded in the first and third quarters of the fiscal year (the quarters ending September 30 and March 31, respectively). There were no student accounts receivable as such.
The Banner student accounts receivable module, on the other hand, records this revenue when the student registers for classes, with a corresponding charge to the student's account receivable. Because (a) students generally registered for classes in December 2004, and (b) the Banner tuition and fee assessment process is run nightly, tuition and fee income was "accelerated" from the third fiscal quarter into the second fiscal quarter.
At the end of the fiscal year, any tuition/fee assessments relating to the second summer term or to the fall term will be reflected in the year-end financial statements as deferred revenue rather than as tuition and fee revenue.
2. ENDOWMENT INCOME
During fiscal year 2004, $216,423 of endowment income was recorded in the General Fund relating to the University's internal "innovation grants" (the DART and Undergraduate Creative Scholar programs). This income should have been recorded in the specific funds established for the programs. To properly reflect the remaining expendable balance of the programs, the income was moved from the General Fund to the program funds during the second fiscal quarter of fiscal year 2005.
This results in negative revenue for the General Fund, and positive revenue for the program funds. The net effect on the University's revenue for fiscal year 2005 is zero. Due to the nature of this correction (a simple correction of a prior year error, with no net impact to the University), the transaction is not reflected as an interfund transfer during fiscal year 2005.
3. INSTRUCTION EXPENSES
The increase in instruction expenses is primarily due to increased salary and benefits costs in four academic departments, generally resulting from increased enrollment. The salary and benefit costs in these departments are:
English - increase of $119,996 is mainly due to (1) the return of a faculty member who was on unpaid leave in fiscal year 2004; (2) the use of two additional adjunct faculty in fiscal year 2004 compared to fiscal year 2003; and (3) annual salary increases.
Computer Information Systems - increase of $95,245 is mainly attributable to (1) the addition of two new faculty members in fiscal year 2004; and (2) annual salary increases.
Mathematics - increase of $87,644 is primarily due to (1) the net addition of one new faculty member; and (2) annual salary increases.
School of Law - increase of $149,262 is primarily attributable to (1) the net addition of one new faculty member; and (2) annual salary increases.
In addition, the Law School's non-payroll expense increased by $115,126. This resulted mainly from the purchase of computer equipment and projection screens in connection with the remodeling project.
4. OTHER EXPENSES
The increase in other expenses is due to the transfer of $1.24 million of University reserves to fund the Law School renovation project. In the quarterly financial statements, both mandatory and non-mandatory transfers are included with "Other" on the statements of revenues and expenditures.
5. RESIDENTIAL LIVING
The primary reason for the increase in Residential Living revenues is the opening of Washburn Village at the beginning of the Fall 2004 term. Washburn Village revenues for the fall term were $326,866, of which all but $3,609 was room rental income. Revenues of the other residence halls are essentially unchanged from fiscal year 2003 to fiscal year 2004.
Opening of Washburn Village is also the major cause of the increase in Residential Living expenses. Operating expenses during the Fall 2004 term were $82,457, split roughly 37/63 between payroll costs and other operating expenses.
Certain fiscal year 2004 amounts have been reclassified to conform with the fiscal year 2005 presentation.