Financial Reports
The University of Florida is a comprehensive learning institution built on a land-grant foundation. We are the Gator Nation, a diverse community dedicated to excellence in education and research and shaping a better future for Florida, the nation, and the world.
The University’s mission is to enable students to lead and influence the next generation and beyond for economic, cultural, and societal benefit by striving to offer broad-based, inclusive public education, leading research, and service to the residents of Florida, the nation, and the world. The fusion of these three endeavors stimulates a remarkable intellectual vitality and generates a synthesis that represents the University’s greatest strength.
Education is a fundamental purpose of this University at both the graduate and undergraduate levels. Research and scholarship are integral to the education process and to the expansion of our understanding of the natural world, the intellect, and the senses. Service reflects the University’s obligation to share the benefits of its research and knowledge for the public good.
These three interlocking elements span all academic disciplines and represent the University’s commitment to lead and serve the state of Florida, the nation, and the world by pursuing and disseminating new knowledge while building upon the experiences of the past. The University of Florida aspires to advance by strengthening the human condition and improving the quality of life.
The University of Florida, the State’s oldest university, traces its beginning of rich history to 1853, when the state-funded East Florida Seminary acquired the Kingsbury Academy in Ocala. After the end of the Civil War, the institution relocated to Gainesville, ultimately consolidated with the State’s land grant Florida Agricultural College, and was renamed the University of Florida in 1906. At the time, the University was an all-male institution with only 102 students.
Until 1947, the University of Florida was one of only three State universities, along with the Florida State College for Women (now Florida State University) and Florida A&M University. Women attended as early as 1916, and the student body grew to 601 women and 8,177 men when the Legislature removed all barriers for female enrollment in 1947.
Today, the University is one of the largest in the nation, boasting an enrollment of more than 52,000 students. The campus consists of 2,000 acres and more than 900 buildings, including the first Leadership in Energy and Environmental Design (LEED) Platinum-certified building in the state of Florida. The University also has programs and facilities in more than 180 locations around the State and the globe.
The University faculty, which numbers more than 4,000, has over 50 Eminent Scholar Chairs and more than 40 members that have been elected to the National Academies of Science and/or Engineering, the Institute of Medicine, or the American Academy of Arts or Sciences. Present and past faculty include Pulitzer Prize winners, a pioneer in aviation engineering, a leading scholar on econometrics, three winners of NASA’s top award for research, one of the four charter members of the Solar Hall of Fame, and a winner of the Smithsonian Institution’s award for conservation.
From pharmacy and public relations to pain mitigation and materials engineering, the University of Florida is a recognized leader in a wide variety of specialties and areas. University researchers and scientists have made significant developments and discoveries in many fields, including astronomy, microbiology, metallurgy, and medical technology.
The University of Florida is a world leader in research, contributing significantly to nearly every field of endeavor. Since 1985, the University of Florida has been a member of the Association of American Universities, which is comprised of 62 leading research universities in the United States and Canada. To date, the University of Florida is the only member university located in Florida.
University researchers have pioneered new therapies and better treatments in the fights against aging and disease. They have developed renewable energy sources that offer great promise in reducing our dependence on fossil fuels, as well as engineered healthier foods, developed more energy-efficient and sustainable construction techniques, and established better ways to protect the environment.
Through the years of research, University of Florida scientists, inventors, engineers, and researchers have developed products and practices that have been distributed and applied with an international reach, improving the lives of millions of people in Florida and around the world.
The University of Florida’s freshman retention rate of 96 percent speaks to the outstanding quality of the University’s entire academic experience. Fall 2015 figures indicate an enrollment of 52,519 students, more than 80 percent of whom are from Florida. Almost every state in the nation is represented in the University of Florida student body, and the University is gaining an increasingly international enrollment, with over 6,000 international students representing more than 150 countries.
Sixty-seven percent of enrolled students are undergraduates, 24 percent are graduate students and nine percent are in a professional degree program.
University of Florida students also receive many opportunities to participate in extracurricular activities. There are more than 900 student organizations on campus, and students attend more than 2,000 campus concerts, art exhibits, theatrical productions, guest lectures, sporting events, as well as other events each year.
The University of Florida, which is comprised of 16 colleges, offers more than 100 undergraduate majors and more than 250 graduate programs. The University has ranked second in both Kiplinger’s “Best Values in Public Colleges” and Forbes “Best Value Public Colleges” in 2015 and 2016, respectively. The University’s consistent ranking among the nation’s top universities is a result of the commitment to provide the highest quality education at the best value.
The significant accounting policies followed by the University of Florida are described below to enhance the usefulness of the financial statements.
The University of Florida is a separate public instrumentality that is part of the State university system of public universities, which is under the general direction and control of the Florida Board of Governors. The University is directly governed by a Board of Trustees (Trustees) consisting of thirteen members. The Governor appoints six citizen members and the Board of Governors appoints five citizen members. These members are confirmed by the Florida Senate and serve staggered terms of five years. The chair of the faculty senate and the president of the student body of the University are also members. The Board of Governors establishes the powers and duties of the Trustees.
The Trustees are responsible for setting policies for the University, which provide governance in accordance with State law and Florida Board of Governors Regulations. The Trustees select the University President. The University President serves as the executive officer and the corporate secretary of the Trustees, and is responsible for administering the policies prescribed by the Trustees.
Criteria for defining the reporting entity are identified and described in the Governmental Accounting Standards Board’s (GASB) Codification of Governmental Accounting and Financial Reporting Standards, Sections 2100 and 2600. These criteria were used to evaluate potential component units for which the primary government is financially accountable and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the primary government’s financial statements to be misleading or incomplete. Based on the application of these criteria, the University of Florida is a component unit of the state of Florida, and its financial balances and activities are discretely presented in the State’s Comprehensive Annual Financial Report.
Based on the application of the criteria for determining component units, certain affiliated organizations are required to be included within the University reporting entity as discretely presented component units because of the significance of their relationship with the University. These organizations are legally separate from the University and are governed by separate boards. The University further categorizes its component units as Direct-Support Organizations, Health Science Center Affiliates, and Shands Hospital and Others. An annual audit of each organization’s financial statements is conducted by independent certified public accountants. The annual reports are submitted to the Auditor General and the University Board of Trustees. Additional information is presented in Note 19.
However, financial activities of certain component units are not included in the University’s financial statements and are denoted below with an asterisk (*). The total assets and operating revenues related to these component units are $49 million and $33 million, respectively. These amounts represent approximately one percent of the total aggregate component units’ assets and operating revenues.
The University’s direct-support organizations, as provided for in Section 1004.28, Florida Statutes, and Board of Governors Regulation 9.011, are considered component units of the University of Florida and therefore, the latest audited financial statements of these organizations are discretely presented in the financial statements of the University. These legally separate, not-for-profit corporations are organized and operated exclusively to assist the University to achieve excellence by providing supplemental resources from private gifts and bequests and valuable education support services. The Statute authorizes these organizations to receive, hold, invest, and administer property and to make expenditures to or for the benefit of the University. These organizations and their purposes are explained as follows:
University of Florida Foundation, Inc., solicits, collects, manages, and directs contributions to the various academic departments and programs of the University and assists the University in fund raising, public relations, and maintenance of alumni records. Their financial statements include the activities of the University of Florida Alumni Association, Inc.
The University Athletic Association, Inc., conducts various inter-collegiate athletic programs for and on behalf of the University.
University of Florida Research Foundation, Inc., promotes, encourages, and assists research activities of the University through income derived from or related to the development and commercialization of intellectual properties, which include inventions, discoveries, processes, and work products.
GatorCare Health Management Corporation coordinates and facilitates the management of the self-insured health insurance plan of the University and its participating affiliated employers, collecting and paying employer and employee premiums.
Gator Boosters, Inc., solicits funds for the benefit of the University athletic programs.
University of Florida Development Corporation develops and maintains Innovation Square where the University-owned Florida Innovation Hub is located.
Citrus Research and Development Foundation, Inc., was formed to advance disease and production research and product development activities to ensure the survival and competitiveness of Florida’s citrus growers through innovation.
University of Florida Alumni Association, Inc., supports activities of the alumni of the University of Florida. Its financial transactions are reflected in the financial statements of the University of Florida Foundation, Inc.
Florida Foundation Seed Producers, Inc.,* supplies Florida farmers and producers with crop seed and nursery stock. This organization stocks foundation seed of the best-known varieties acceptable to Florida climate and soils in adequate quantities and at reasonable prices.
The University of Florida Law Center Association, Inc.,* promotes, supports, and improves legal education, legal research, the legal profession, and the administration of justice; and assists the Levin College of Law in the development and maintenance of a law center.
Florida 4-H Club Foundation, Inc.,* promotes the educational objectives of the 4-H Youth Development Program, an official part of the Florida Cooperative Extension Service.
University of Florida Leadership and Education Foundation, Inc.,* was formed to further agriculture and natural resource education and related activities, promote agriculture and natural resources leadership, and make contributions to and confer benefits upon the University.
University of Florida Investment Corporation* promotes the educational purposes of the University of Florida by providing investment research, advice, counsel, and management to and for the University Board of Trustees and affiliated organizations of the University.
Citrus Research and Education Foundation, Inc.,* expedites citrus production, propagates new plant materials, collects and analyzes environmental impact research data, and provides research and education support to the University of Florida Citrus Research and Education Center at Lake Alfred.
Treasure Coast Agricultural Research Foundation, Inc.,* supports, encourages, and fosters research, education, and extension at the Institute of Food and Agricultural Sciences of the University on issues related to the citrus industry within the Indian River region.
UF Historic St. Augustine, Inc.,* ensures the long-term preservation and interpretation of State-owned historic properties in St. Augustine.
Southwest Florida Research and Education Foundation, Inc.,* provides research and educational support to the University of Florida Southwest Florida Research and Education Center.
The corporations listed below, except University of Florida Jacksonville Healthcare, Inc., and Faculty Clinic, Inc., are Faculty Practice Plans, as provided for in Board of Governors Regulation 9.017. The Faculty Practice Plans provide educationally-oriented clinical practice settings and opportunities through which faculty members provide health, medical, veterinary, and dental care to patients as an integral part of their academic activities and their employment as faculty. Because these faculty practice activities generate income, the colleges are authorized to regulate fees generated from faculty practice and maintain Faculty Practice Plans for the orderly collection and distribution of fees. These organizations provide significant support for the clinical instruction function of the University of Florida J. Hillis Miller Health Science Center (JHMHC) and are component units of the University of Florida.
Florida Clinical Practice Association, Inc., bills and collects clinical professional fees to support the educational, research, and service programs of the University of Florida College of Medicine.
University of Florida Jacksonville Physicians, Inc., bills and collects clinical professional fees to support the educational, research, and service programs of the University of Florida College of Medicine – Jacksonville.
University of Florida Jacksonville Healthcare, Inc., was a not- for-profit health services support organization, as provided for in Board of Governors Regulation 9.011, the purpose of which was to further medical education and operate outpatient clinic facilities, by engaging in strategic alliances and partnerships with non-academic entities, effecting managed care contracting and provider network development for the JHMHC. On June 30, 2016, University of Florida Jacksonville Healthcare, Inc. was merged into University of Florida Jacksonville Physicians, Inc.
Florida Veterinary Medicine Faculty Association, Inc., bills and collects clinical professional fees to support the educational, research, and service programs of the University of Florida College of Veterinary Medicine.
Faculty Associates, Inc., bills and collects clinical professional fees to support the educational, research, and service programs of the University of Florida College of Dentistry.
Faculty Clinic, Inc.,* a not-for-profit, tax-exempt corporation operates primarily as a facility management company that leases space to Shands Jacksonville and University of Florida Jacksonville Physicians, Inc.
University of Florida College of Nursing Faculty Practice Association, Inc.,* performs billing and collection of professional fees to support the educational, research, and service programs of the University of Florida College of Nursing.
Florida Health Professions Association, Inc.,* performs billing and collection of clinical professional fees to support the educational, research, and service programs of the University of Florida College of Public Health and Health Professions.
University of Florida College of Pharmacy Faculty Practice Association, Inc.,* performs billing and collection of fees to support the educational, research, and service programs of the University of Florida College of Pharmacy.
Shands Teaching Hospital and Clinics, Inc., (Shands) was incorporated October 15, 1979, as a not-for-profit corporation. Shands, a major tertiary care teaching institution, is a leading referral center in the state of Florida and the southeast United States and facilitates medical education programs at the University.
Shands entered into a contractual agreement, as of July 1, 1980, as subsequently restated and amended, with the Florida Board of Education, to provide for the use of hospital facilities at the JHMHC through December 31, 2030, with renewal provisions. The contractual agreement also provides for the transfer to Shands of all other assets and liabilities arising from the operation of the hospital facilities prior to July 1, 1980. At termination of the contractual agreement, the net position of Shands reverts to the State Board of Education. Legal title to all buildings and improvements transferred to Shands remains with the state of Florida during the term of the contractual agreement. The contractual agreement provides for a 12-month grace period for any event of default, other than the bankruptcy of Shands. In addition, the contractual agreement limits the right of the State Board of Education to terminate the contractual agreement solely to the circumstance in which Shands declares bankruptcy and, in such event, requires net revenues derived from the operation of the hospital facilities to continue to be applied to the payment of Shands’ debts.
Under the terms of the contractual agreement, Shands is obligated to manage, operate, maintain, and insure the hospital facilities in support of the programs of the JHMHC and further agrees to contract with the State Board of Education for the provision of these programs. By operation of law, the University of Florida Board of Trustees has become the successor-in-interest to the State Board of Education.
Shands Jacksonville HealthCare, Inc., (Shands Jacksonville) is a Florida not-for-profit corporation. Shands Jacksonville was organized primarily to provide healthcare and related services to the community, including the City of Jacksonville and surrounding counties, and to support the teaching and research missions of the University.
University of Florida Self-Insurance Program (the Program) was created by the Florida Board of Regents, succeeded by the Florida Board of Governors, pursuant to Section 1004.24, Florida Statutes. The Program provides comprehensive general liability and professional liability (malpractice) coverage for the University of Florida and affiliated teaching hospitals that are providing education in healthcare or veterinary services.
University of Florida Healthcare Education Insurance Company (HEIC) was created on September 1, 1994, as a self- insurance mechanism created pursuant to Section 1004.24, Florida Statutes. HEIC writes coverage for the participants in the Self-Insurance Program (the Program) for loss exposure above the Program’s retention. HEIC obtains excess loss reinsurance coverage from commercial insurance carriers for certain layers of exposure.
The University’s accounting policies conform with accounting principles generally accepted in the United States of America applicable to public colleges and universities as prescribed by GASB. The National Association of College and University Business Officers (NACUBO) also provides the University with recommendations prescribed in accordance with generally accepted accounting principles promulgated by GASB and the Financial Accounting Standards Board (FASB). GASB allows public universities various reporting options. The University of Florida has elected to report as an entity engaged in only business-type activities. This election requires the adoption of the accrual basis of accounting and entity-wide reporting including the following components:
Basis of accounting refers to when revenues, expenses, and related assets, deferred outflows of resources, liabilities, and deferred inflows of resources are recognized in the accounts and reported in the financial statements. Specifically, it relates to the timing of the measurements made, regardless of the measurement focus applied. The University’s financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from non-exchange activities are generally recognized when all applicable eligibility requirements, including time requirements, are met. The University follows GASB standards of accounting and financial reporting.
The University’s component units use the economic resources measurement focus and accrual basis of accounting whereby revenues are recognized when earned and expenses are recognized when incurred. Twenty-two component units follow GASB standards of accounting and financial reporting. Eight component units (University of Florida Foundation, Inc., Florida Foundation Seed Producers, Inc., Southwest Florida Research and Education Foundation, Inc., Citrus Research and Education Foundation, Inc., Citrus Research and Development Foundation, Inc., Treasure Coast Agricultural Research Foundation, Inc., University of Florida Alumni Association, Inc., and University of Florida Investment Corporation) follow FASB standards of accounting and financial reporting for not-for-profit organizations.
Significant interdepartmental sales between auxiliary service departments and other institutional departments have been eliminated from revenues and expenses for reporting purposes.
The University’s principal operating activities consist of instruction, research, and public service. Operating revenues and expenses generally include all fiscal transactions directly related to these activities as well as administration, operation, and maintenance of capital assets and depreciation on capital assets. Nonoperating revenues include noncapital state appropriations, federal and state student financial aid, investment income, and capital state appropriations for construction projects. Interest on capital asset-related debt is a nonoperating expense.
The Statement of Net Position is presented in a classified format to distinguish between current and noncurrent assets and liabilities. When both restricted and unrestricted resources are available to fund certain programs, it is the University’s policy to first apply the restricted resources to such programs, followed by the use of the unrestricted resources.
The Statement of Revenues, Expenses, and Changes in Net Position is presented by major sources and is reported net of tuition scholarships, discounts, and allowances. Tuition scholarships, discounts, and allowances are the differences between the stated charge for goods and services provided by the University and the amount that is actually paid by a student or a third party making payments on behalf of the student. The University applied “The Alternate Method” as prescribed in NACUBO Advisory Report 2000-05 to determine the reported net tuition scholarships, discounts, and allowances. Under this method, the University computes these amounts by allocating the cash payments to students, excluding payments for services, on a ratio of total aid to the aid not considered to be third-party aid.
The Statement of Cash Flows is presented using the direct method in compliance with GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting.
The amount reported by the University as cash and cash equivalents consists of cash on hand and cash in demand accounts. University cash deposits are held in banks qualified as public depositories under Florida law. All such deposits are insured by Federal depository insurance, up to specified limits, or collateralized with securities held in Florida’s multiple financial institution collateral pool required by Chapter 280, Florida Statutes. Cash and cash equivalents that are externally restricted to make debt service payments, maintain sinking or reserve funds, or to purchase or construct capital assets or other restricted assets, are classified as restricted.
The University categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs. The University reports certain investments at net asset value as allowed per GASB Statement No. 72, Fair Value Measurement and Application.
University capital assets consist of land, construction in progress, works of art and historical treasures, buildings, infrastructure and other improvements, furniture and equipment, library resources, property under capital lease and leasehold improvements, computer software, and other capital assets. These assets are capitalized and recorded at cost at the date of acquisition or at estimated fair value on the date received in the case of gifts and purchases of State surplus property. Additions, improvements, and other outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. The University has a capitalization threshold of $4 million for intangible assets, which includes computer software, $5,000 for tangible personal property, and $250 for library resources. The costs of all new buildings and projects adding new square footage are capitalized. Infrastructure and leasehold improvements have a $250,000 capitalization threshold. For building renovations, the threshold is $250,000 or less if the amount expended is at least 25% of the cost basis of the building. Depreciation is computed on the straight-line basis over the following estimated useful lives:
Noncurrent liabilities include principal amounts of capital improvement debt payable, loans and notes payable, installment purchase agreements payable, capital leases payable, compensated absences payable, other postemployment benefits payable, net pension liabilities, and other noncurrent liabilities that are not scheduled to be paid within the next fiscal year. Capital improvement debt payable is reported net of unamortized premiums or discounts and losses on refunding. The University amortizes debt premiums and discounts over the life of the debt using the straight-line method. Losses on refunding are amortized over the life of the old debt or new debt (whichever is shorter) using the straight-line method.
For purposes of measuring the net pension liabilities, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Florida Retirement System (FRS) defined benefit plan and the Health Insurance Subsidy (HIS) defined benefit plan and additions to/deductions from the FRS’s and the HIS’s fiduciary net position have been determined on the same basis as they are reported by the FRS and the HIS plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.
The University implemented GASB Statement No. 72, Fair Value Measurement and Application, for the 2015-16 fiscal year. This requires the University to use valuation techniques that are appropriate under the circumstances and for which sufficient data are available to measure fair value. The investments of the University and its component units are presented in Note 4 in accordance with this statement.
The University implemented GASB Statement No. 79, Certain External Investment Pools and Pool Participants, which establishes criteria for an external investment pool to qualify for making the election to measure all of its investments at amortized cost for financial reporting purposes.
University of Florida Jacksonville Healthcare, Inc. merged with University of Florida Jacksonville Physicians, Inc. effective June 30, 2016. Table 1 summarizes the Adjustments to Beginning Net Position reported in the Component Units’ Statement of Revenues, Expenses, and Changes in Net Position.
| Table 1. Adjustments to Beginning Net Position - Component Units | |
|---|---|
| Description | Health Science Center Affiliates |
| Jacksonville Healthcare, Inc. | $ (369,091) |
| UF Jacksonville Physicians, Inc. | 369,091 |
| Total Adjustments to Beginning Net Position | $ - |
Section 1011.42(5), Florida Statutes, authorizes universities to invest funds with the State Treasury and State Board of Administration (SBA) and requires that universities comply with the statutory requirements governing investment of public funds by local governments. Accordingly, universities are subject to the requirements of Chapter 218, Part IV, Florida Statutes. The University’s Board of Trustees has adopted a written investment policy providing that surplus funds of the University shall be invested in those institutions and instruments permitted under the provisions of Florida Statutes. Pursuant to Section 218.415(16), Florida Statutes, the University is authorized to invest in the Florida PRIME investment pool administered by the SBA; interest-bearing time deposits and savings accounts in qualified public depositories, as defined in Section 280.02, Florida Statutes; direct obligations of the United States Treasury; obligations of Federal agencies and instrumentalities; securities of, or interests in, certain open-end or closed-end management type investment companies; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; and other investments approved by the University’s Board of Trustees, as authorized by law. Investments set aside to make debt service payments, maintain sinking or reserve funds, or to purchase or construct capital assets are classified as restricted. Investments of the University and its component units at June 30, 2016, are reported at fair value and shown in Tables 2 through 5.
| Table 2. University Investments | ||||
|---|---|---|---|---|
| Fair Value Measurements Using | ||||
Investments by Fair Value Level |
Amount |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
| External Investments Pool: | ||||
| State Treasury Special Purpose Investment Account | $ 848,519,170 | $ - | $ - | $ 848,519,170 |
| State Board of Administration Debt Service Accounts | 1,978,769 | 1,978,769 | - | - |
| Fixed Income Fund | 9,976,048 | 9,976,048 | - | - |
| Total Investments by Fair Value Level | 860,473,987 | $ 11,954,817 | $ - | $ 848,519,170 |
| Investments Measured at the Net Asset Value (NAV) | ||||
| Private Equity Funds | 675,320,285 | |||
| Total University Investments | $ 1,535,794,272 | |||
| Table 3. University Investments Measured at the NAV | ||||
|---|---|---|---|---|
Investments Measured at the NAV |
Fair Value |
Unfunded Commitments |
Redemption Frequency (if Currently Eligible) |
Redemption Notice Period |
| Private Equity Funds | $ 675,320,285 | $ - | N/A | N/A |
| Table 4. Component Unit Investments | ||||
|---|---|---|---|---|
| Fair Value Measurements Using | ||||
Investments by Fair Value Level |
Amount |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
| External Investments Pool: | ||||
| State Treasury Special Purpose Investment Account | $ 417,942,838 | $ - | $ - | $ 417,942,838 |
| US Government and Federally-Guaranteed Obligations | 2,993,367 | 2,455,540 | 537,827 | - |
| Federal Agency Obligations | 8,225,148 | - | 8,225,148 | - |
| Domestic Bonds and Notes | 5,070,119 | - | 5,070,119 | |
| International Bonds and Notes | 100,000 | - | 100,000 | - |
| Domestic Stock | 421,836 | 398,523 | 23,313 | - |
| International Stock | 69,098 | 69,098 | - | - |
| Equity Mutual Funds | 127,393,917 | 58,360,520 | 69,033,397 | - |
| Bond Mutual Funds | 190,338,869 | 128,486,662 | 61,852,207 | - |
| Other Investments | 44,202,376 | - | 41,434,000 | 2,768,376 |
| Total Investments by Fair Value Level | 796,757,568 | $ 189,770,343 | $ 186,276,011 | $ 420,711,214 |
| Investments Measured at the Net Asset Value (NAV) | ||||
| International Equity | 23,275 | |||
| Hedge Funds | 10,857,448 | |||
| Short-term Investments | 11,676,840 | |||
| Private Equity Funds | 1,903,283,253 | |||
| Total Investments Measured at the NAV | 1,925,840,816 | |||
| Total Investments Measured at Fair Value | 2,722,598,384 | |||
| Other | ||||
| State Board of Administration Florida PRIME | 10,314 | |||
| Real Estate Investments | 6,645,574 | |||
| Cash Surrender Value of Life Insurance Policy | 467,872 | |||
| Domestic Stock | 251,268 | |||
| Commercial Paper | 7,908,000 | |||
| Cash Collateral on Deposit with Swap Counterparty | 34,991,000 | |||
| Total Other Investments | 50,274,028 | |||
| Total Component Unit Investments | $ 2,772,872,412 | |||
| Table 5. Component Unit Investments Measured at the NAV | ||||
|---|---|---|---|---|
Investments Measured at the NAV |
Fair Value |
Unfunded Commitments |
Redemption Frequency (if Currently Eligible) |
Redemption Notice Period |
| International Equity | $ 23,275 | $ - | Illiquid | N/A |
| Hedge Funds | 10,857,448 | - | Annually | 90 Days |
| Short-term Investments | 11,676,840 | - | Daily | 1 Day |
| Private Equity Funds | 1,903,283,253 | 223,977,391 | Monthly | 30-45 Days |
| Total Component Unit Investments | $ 1,925,840,816 | $ 223,977,391 | ||
The University and its discretely presented component units (see Note 1) reported investments at fair value totaling $848,519,170 and $417,942,838, respectively, at June 30, 2016, in the State Treasury Special Purpose Investment Account (SPIA) investment pool, representing ownership of a share of the pool, not the underlying securities. Pooled investments with the State Treasury are not registered with the Securities and Exchange Commission. Oversight of the pooled investments with the State Treasury is provided by the Treasury Investment Committee per Section 17.575, Florida Statutes. The authorized investment types are set forth in Section 17.575, Florida Statutes. The SPIA carried a credit rating of A+f by Standard and Poor’s and had an effective duration of 2.61 years and fair value factor of 1.0143 at June 30, 2016. Participants contribute to the Treasury Pool on a dollar basis. These funds are commingled and a fair value of the pool is determined from the individual values of the securities. The fair value of the securities is summed and a total pool fair value is determined. A fair value factor is calculated by dividing the pool’s total fair value by the pool participant’s total cash balances. The fair value factor is the ratio used to determine the fair value of an individual participant’s pool balance. The University relies on policies developed by the State Treasury for managing interest rate risk or credit risk for this investment pool. Disclosures for the State Treasury investment pool are included in the notes to the financial statements of the State’s Comprehensive Annual Financial Report.
The University reported investments at fair value totaling $1,978,769 at June 30, 2016, in the State Board of Administration (SBA) Debt Service Accounts. These investments are used to make debt service payments on bonds issued by the State Board of Education for the benefit of the University. The University’s investments consist of United States Treasury securities, with maturity dates of six months or less and are reported at fair value. The University relies on policies developed by the SBA for managing interest rate risk and credit risk for these accounts. Disclosures for the Debt Service Accounts are included in the notes to the financial statements of the State’s Comprehensive Annual Financial Report.
In addition to external investment pools, the University and its discretely presented component units invested in various debt and equity securities, money market funds, and mutual funds. For the University, the majority of the other investments are private equity funds managed by the University of Florida Investment Corporation (UFICO). For the University’s discretely presented component units, other investments are those reported primarily by the University of Florida Foundation, Inc., The University Athletic Association, Inc., Florida Clinical Practice Association, Inc., Shands Teaching Hospital and Clinics, Inc., Shands Jacksonville HealthCare, Inc., and the University of Florida Self-Insurance Program. The following risks apply to the University’s and its discretely presented component units’ investments other than external investment pools:
Interest Rate Risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Pursuant to Section 218.415(16), Florida Statutes, the University’s investments in securities must provide sufficient liquidity to pay obligations as they come due. Investments of the University’s component units (excluding those reporting under FASB standards) in debt securities, bonds and notes, and bond mutual funds, and their future maturities at June 30, 2016, are shown in Table 6.
| Table 6. Component Units Debt Investment Maturities | |||||
|---|---|---|---|---|---|
| Investment Maturities (in Years) | |||||
| Types of Investments | Fair Value | Less than 1 | 1-5 | 6-10 | More than 10 |
| US Government and Federally-Guaranteed Obligations | $ 2,455,540 | $ - | $ 2,455,540 | $ - | $ - |
| Federal Agency Obligations | 8,225,148 | - | 8,225,148 | - | - |
| Bonds and Notes | 4,970,310 | 3,000,860 | 998,860 | 970,590 | - |
| Bond Mutual Funds | 179,645,382 | 14,163,578 | 36,290,994 | 129,190,810 | - |
| Total | $ 195,296,380 | $ 17,164,438 | $ 47,970,542 | $ 130,161,400 | $ - |
Credit Risk - Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Obligations of the United States Government or obligations explicitly guaranteed by the United States Government are not considered to have credit risk and do not require disclosure of credit quality. The private equity funds are unrated. At June 30, 2016, the University’s component units (excluding those reporting under FASB standards) had bonds and notes and bond mutual funds, with quality ratings by nationally recognized rating agencies (e.g., Moody’s Investors Service), as shown in Table 7.
| Table 7. Component Units Debt Investments Quality Ratings | |||||
|---|---|---|---|---|---|
Types of Investments |
Fair Value |
AAA/Aaa |
AA/Aa |
A/Ba |
Less than A/Ba or Not Rated |
| Federal Agency Obligations | $ 8,225,148 | $ 8,225,148 | $ - | $ - | $ - |
| Bonds and Notes | 4,970,310 | - | 1,001,240 | 3,969,070 | - |
| Bond Mutual Funds | 179,645,382 | 35,424,542 | 67,136,300 | 17,037,798 | 60,046,742 |
| Total | $ 192,840,840 | $ 43,649,690 | $ 68,137,540 | $ 21,006,868 | $ 60,046,742 |
Custodial Credit Risk - Custodial credit risk is the risk that in the event of the failure of the counterparty to a transaction, the University will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Exposure to custodial credit risk relates to investment securities that are held by someone other than the University and are not registered in the University’s name. The University has no formal policy on custodial credit risk. The component units manage their custodial credit risk based on various investment policies, which may be obtained separately from the component units.
Concentration of Credit Risk - Concentration of credit risk is the risk of loss attributed to the magnitude of the University’s investments in a single issuer. The University has no formal policy on concentration of credit risk. The component units manage their concentration of credit risk based on various investment policies, which may be obtained separately from the component units.
Accounts receivable represent amounts for grant and contract reimbursements due from third parties, various sales and services provided to students and third parties, student tuition and fees, and interest accrued on investments and loans receivable. Accounts receivable, net of an allowance for uncollectible accounts, reported as of June 30, 2016, are summarized in Table 8.
| Table 8. Accounts Receivable | |
|---|---|
| Description | Amount |
| Grants and Contracts | $ 69,252,384 |
| Sales and Services of Auxiliary Enterprises | 4,173,241 |
| Student Tuition and Fees | 8,509,814 |
| Sales and Services of Educational Departments | 1,463,385 |
| Interest | 1,542,106 |
| Total Accounts Receivable, Net | $ 84,940,930 |
Loans and notes receivable represent all amounts owed on promissory notes from debtors, including student loans made under the Federal Perkins Loan Program and other loan programs.
Allowances for uncollectible accounts and loans and notes receivable, are reported based upon management’s best estimate as of fiscal year-end, considering type, age, collection history, and other factors considered appropriate. Accounts receivable for student tuition and fees, various sales and services provided to students and third parties, and interest are reported net of an allowance of $6,555,130, which is 29.5% of total related accounts receivable. Loans and notes receivable are reported net of an allowance of $3,908,193 which is 8.6% of total related loans and notes receivable. No allowance has been accrued for grants and contracts receivable. University management considers these to be fully collectible.
This amount consists of $42,690,206 of Public Education Capital Outlay and Capital Improvement Fee Trust Fund due from the State to the University for construction of University facilities.
The University’s financial statements are reported for the fiscal year ended June 30, 2016. The University’s discretely presented component units’ financial statements are reported for the most recent fiscal year for which an audit report is available. Some component units are not presented (see Note 1). Additionally, component units’ due from and due to amounts include receivables and payables between the various component unit columns. Accordingly, amounts reported by the University as due from and to component units on the Statement of Net Position may not agree with amounts reported by the component units as due from and to the University.
Capital assets activity for the fiscal year ended June 30, 2016, is presented in Table 9.
| Table 9. Capital Assets | ||||
|---|---|---|---|---|
Description |
Beginning Balance |
Additions |
Reductions |
Ending Balance |
| Nondepreciable Capital Assets: | ||||
| Land | $ 11,883,599 | $ 583,436 | $ - | $ 12,467,035 |
| Construction in Progress | 225,170,661 | 140,501,770 | 236,142,164 | 129,530,267 |
| Works of Art and Historical Treasures | 4,204,914 | 79,260 | - | 4,284,174 |
| Total Nondepreciable Capital Assets | 241,259,174 | 141,164,466 | 236,142,164 | 146,281,476 |
| Depreciable Capital Assets: | ||||
| Buildings | 2,353,467,745 | 231,475,951 | 3,386,058 | 2,581,557,638 |
| Infrastructure and Other Improvements | 121,196,760 | 2,962,159 | - | 124,158,919 |
| Furniture and Equipment | 569,464,996 | 57,352,590 | 29,719,609 | 597,097,977 |
| Library Resources | 327,964,736 | 9,972,072 | 5,208,947 | 332,727,861 |
| Property Under Capital Lease and Leasehold Improvements | 14,647,344 | 2,239,658 | - | 16,887,002 |
| Computer Software | 24,533,000 | - | - | 24,533,000 |
| Other Capital Assets* | 499,505 | 532,215 | - | 1,031,720 |
| Total Depreciable Capital Assets | 3,411,774,086 | 304,534,645 | 38,314,614 | 3,677,994,117 |
| Less Accumulated Depreciation: | ||||
| Buildings | 1,092,338,408 | 79,153,082 | 2,731,800 | 1,168,759,690 |
| Infrastructure and Other Improvements | 70,095,152 | 4,167,421 | - | 74,262,573 |
| Furniture and Equipment | 388,625,063 | 36,805,697 | 21,126,905 | 404,303,855 |
| Library Resources | 276,115,728 | 11,712,404 | 5,208,947 | 282,619,185 |
| Property Under Capital Lease and Leasehold Improvements | 4,834,296 | 651,479 | - | 5,485,775 |
| Computer Software | 24,533,000 | - | - | 24,533,000 |
| Other Capital Assets* | 326,960 | 33,015 | 7,465 | 352,510 |
| Total Accumulated Depreciation | 1,856,868,607 | 132,523,098 | 29,075,117 | 1,960,316,588 |
| Total Depreciable Capital Assets, Net | 1,554,905,479 | 172,011,547 | 9,239,497 | 1,717,677,529 |
| Total Capital Assets, Net | $ 1,796,164,653 | $ 313,176,103 | $ 245,381,661 | $ 1,863,959,005 |
| * Other Capital Assets includes Depreciable Works of Art and Historical Treasures. | ||||
The Florida Museum of Natural History, which is part of the University, maintains a depository of biological, geological, archaeological, and ethnographic materials. The Museum’s collections contain over 40 million specimens, more than half of which are catalogued, either individually or in lots. While many of the collections are undoubtedly quite valuable and irreplaceable, the University has not placed a dollar value on these items and, accordingly, the financial statements do not include these assets.
The Samuel P. Harn Museum of Art, which is also part of the University, maintains a collection of over 10,000 works of art. Donations of artwork to the Museum are recorded by the University of Florida Foundation, Inc. (Foundation), and are included with reported “Permanent Collections” as further explained in Note 9 of the Foundation’s audited financial statements for the fiscal year ended June 30, 2016. Purchases of artwork by the Museum are included with the University’s reported Nondepreciable Capital Assets as presented in Table 9.
Certain changes in the University’s proportionate share of the net pension liabilities of the cost-sharing multiple-employer Florida Retirement System and Health Insurance Subsidy defined benefit plans are reported as deferred outflows and inflows of pension resources. These include changes in actuarial assumptions and other inputs used to measure the pension liabilities, differences between actual and expected experience in the measurement of the liabilities, the net difference between projected and actual earnings on pension plan investments, as well as changes in the University’s proportion of the collective net pension liabilities since the prior measurement date, and changes between the University’s contributions and its proportionate share of contributions. In addition, University contributions to the pension plan subsequent to the measurement date for the collective net pension liabilities are reported as deferred outflows. Total deferred outflows of pension resources were $140,766,171 and deferred inflows of pension resources were $53,791,427 for the year ended June 30, 2016. Note 14 includes a complete discussion of the University’s defined benefit pension plans.
Unearned Revenue includes amounts received prior to the end of the fiscal year but related to subsequent accounting periods. Unearned Revenue as of June 30, 2016, is summarized in Table 10.
| Table 10. Unearned Revenue | |
|---|---|
| Description | Amount |
| Grants and Contracts | $ 42,180,282 |
| Sales and Services of Auxiliary Enterprises | 8,658,656 |
| Student Tuition and Fees | 5,848,242 |
| Total Unearned Revenue | $ 56,687,180 |
Long-term liabilities of the University at June 30, 2016, include capital improvement debt payable, loans and notes payable, installment purchase agreements payable, capital leases payable, compensated absences payable, other postemployment benefits payable, net pension liability, and other noncurrent liabilities. Long-term liability activities for the fiscal year ended June 30, 2016, are presented in Table 11.
| Table 11. Long-term Liabilities | |||||
|---|---|---|---|---|---|
Description |
Beginning Balance |
Additions |
Reductions |
Ending Balance |
Current Portion |
| Capital Asset-Related Debt: | |||||
| Capital Improvement Debt Payable | $ 167,223,184 | $ - | $ 9,120,492 | $ 158,102,692 | $ 9,283,000 |
| Loans and Notes Payable | 11,192,062 | - | 527,465 | 10,664,597 | 551,318 |
| Installment Purchase Agreements Payable | 3,059,013 | 3,343,786 | 1,978,783 | 4,424,016 | 1,790,076 |
| Capital Leases Payable | 2,809,896 | - | 145,928 | 2,663,968 | 155,341 |
| Total Capital Asset-Related Debt | 184,284,155 | 3,343,786 | 11,772,668 | 175,855,273 | 11,779,735 |
| Other Long-term Liabilities: | |||||
| Compensated Absences Payable | 129,279,746 | 3,390,836 | 15,359,931 | 117,310,651 | 16,668,272 |
| Other Postemployment Benefits Payable | 217,539,000 | 62,582,000 | 12,415,000 | 267,706,000 | - |
| Net Pension Liability | 224,627,083 | 291,718,411 | 162,599,999 | 353,745,495 | 5,679,982 |
| Other Noncurrent Liabilities | 18,213,660 | - | 259,619 | 17,954,041 | - |
| Total Long-term Liabilities | $ 773,943,644 | $ 361,035,033 | $ 202,407,217 | $ 932,571,460 | $ 34,127,989 |
Capital improvement debt is issued to construct student housing facilities, parking garages, and various other University facilities. The outstanding debt for student housing and parking garages is secured by a pledge of a portion of housing rental revenues and parking fees. The outstanding debt for the Clinical Translational Research Building is secured by a pledge of a portion of indirect cost revenues received by the College of Medicine. Pledged revenues are equal to the remaining debt service requirements to maturity for the capital improvement debt.
A summary of the University’s capital improvement debt payable at June 30, 2016, appears in Table 12.
| Table 12. Capital Improvement Debt Payable | |||||
|---|---|---|---|---|---|
| Amount Outstanding | |||||
Type and Series |
Amount of Original Issue |
Principal |
Interest |
Interest Rates |
Maturity Date |
| Student Housing Auxiliary Debt: | |||||
| 2005A Housing | $ 37,610,000 | $ 20,705,000 | $ 8,506,331 | 4.500 to 5.125% | 2030 |
| 2011A Housing | 16,350,000 | 10,225,000 | 2,147,888 | 3.000 to 4.000% | 2028 |
| 2012A Housing | 26,500,000 | 22,425,000 | 6,601,525 | 3.000 to 4.000% | 2031 |
| 2013A Housing | 24,805,000 | 22,515,000 | 8,084,531 | 3.000 to 5.000% | 2033 |
| Total Student Housing Debt | 105,265,000 | 75,870,000 | 25,340,275 | ||
| Parking Garage Auxiliary Debt: | |||||
| 1998 Parking Garage | 10,000,000 | 2,185,000 | 159,006 | 4.750% | 2019 |
| 2007A Parking Garage | 20,770,000 | 14,320,000 | 3,915,959 | 3.750 to 4.375% | 2028 |
| Total Parking Garage Debt | 30,770,000 | 16,505,000 | 4,074,965 | ||
| Other University of Florida Revenue Bonds: | |||||
| 2011 Clinical Translational Research Building | 29,838,000 | 24,216,000 | 8,541,815 | 4.433% | 2030 |
| 2013 Student Activity | 41,540,000 | 37,745,000 | 17,217,081 | 4.000 to 5.000% | 2033 |
| Total Other University of Florida Revenue Bonds | 71,378,000 | 61,961,000 | 25,758,896 | ||
| Plus: Unamortized Premiums | - | 5,104,237 | - | ||
| Less: Unamortized Discounts | - | (250,604) | - | ||
| Less: Unamortized Refunding Losses | - | (1,086,941) | - | ||
| Total Capital Improvement Debt | $ 207,413,000 | $158,102,692 | $ 55,174,136 | ||
Annual requirements to amortize all capital improvement debt outstanding as of June 30, 2016, appear in Table 13.
| Table 13. Capital Improvement Debt Payable - Principal & Interest | |||
|---|---|---|---|
| Fiscal Year Ending June 30 | Principal | Interest | Total |
| 2017 | $9,283,000 | $ 6,632,932 | $ 15,915,932 |
| 2018 | 9,707,000 | 6,224,331 | 15,931,331 |
| 2019 | 10,132,000 | 5,781,787 | 15,913,787 |
| 2020 | 8,872,000 | 5,353,514 | 14,225,514 |
| 2021 | 9,277,000 | 4,951,218 | 14,228,218 |
| 2022-2026 | 50,209,000 | 18,274,890 | 68,483,890 |
| 2027-2031 | 47,976,000 | 7,367,820 | 55,343,820 |
| 2032-2033 | 8,880,000 | 587,644 | 9,467,644 |
| Total Principal & Interest | 154,336,000 | 55,174,136 | 209,510,136 |
| Plus: Unamortized Premiums | 5,104,237 | - | 5,104,237 |
| Less: Unamortized Discounts | (250,604) | - | (250,604) |
| Less: Unamortized Refunding Losses | (1,086,941) | - | (1,086,941) |
| Total | $ 158,102,692 | $ 55,174,136 | $ 213,276,828 |
On August 30, 2013, the University borrowed $6,472,538 at an interest rate of 2.33% to finance the cost of energy savings contracts, heating, ventilation, and air conditioning (HVAC) update and renovation of J. Wayne Reitz Student Union. The principal and interest cost is expected to be met by cost savings of the newer system. The note matures on August 31, 2029, and principal and interest payments are made annually. On June 17, 2013, the University borrowed $5,000,000 at an interest rate of 3.58% for a similar renovation at Willard M. Fifield Hall. The note matures on November 1, 2033, and principal and interest payments are made annually. Annual requirements to amortize the two outstanding notes as of June 30, 2016, appear in Table 14.
| Table 14. Loans and Notes - Principal & Interest | |||
|---|---|---|---|
| Fiscal Year Ending June 30 | Principal | Interest | Total |
| 2017 | $ 551,318 | $ 303,364 | $ 854,682 |
| 2018 | 572,130 | 288,408 | 860,538 |
| 2019 | 597,825 | 272,820 | 870,645 |
| 2020 | 569,277 | 256,427 | 825,704 |
| 2021 | 593,591 | 241,174 | 834,765 |
| 2022-2026 | 3,369,927 | 949,615 | 4,319,542 |
| 2027-2031 | 3,170,275 | 460,157 | 3,630,432 |
| 2032-2034 | 1,240,254 | 90,765 | 1,331,019 |
| Total | $ 10,664,597 | $ 2,862,730 | $ 13,527,327 |
The University has entered into several installment purchase agreements for the purchase of equipment with original cost bases totaling $8,856,449. The stated interest rates ranged from 0.00% to 13.02%. Future minimum payments remaining under installment purchase agreements as of June 30, 2016, appear in Table 15.
| Table 15. Installment Purchase Agreements Payable - Principal & Interest | |||
|---|---|---|---|
| Fiscal Year Ending June 30 | Principal | Interest | Total |
| 2017 | $ 1,790,076 | $ 81,447 | $ 1,871,523 |
| 2018 | 1,401,728 | 43,355 | 1,445,083 |
| 2019 | 947,583 | 15,715 | 963,298 |
| 2020 | 284,629 | 2,934 | 287,563 |
| Total Minimum Payments | $ 4,424,016 | $ 143,451 | $ 4,567,467 |
The University of Florida entered into a lease agreement with the University of Florida Foundation, Inc. (the Foundation), a direct-support organization (component unit) of the University. Under the terms of the agreement, the University agreed to lease from the Foundation a 607-space parking garage (the garage) located near the Health Science Center Administrative Offices for a period of thirty years beginning July 1, 1994. Lease payments of $100,000 annually are due each July 1. Lease payments from the University to the Foundation were based on an original construction cost of $3,000,000 and no interest. For reporting purposes, the lease is considered a capital lease under GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The initial obligation was discounted at an imputed interest rate of 6.45% and was recorded at $1,382,470. The asset, which is included in the Property Under Capital Lease and Leasehold Improvements, was recorded at a cost of $3,000,000.
The University entered into a lease agreement with Shands. Under the terms of the agreement, the University agreed to lease from Shands an 800-space parking garage located near the Health Science Center Administrative Offices for a period of thirty years beginning March 1, 2000. Annual lease payments of $227,167 are due each May 1, which began on May 1, 2001. Lease payment amounts were based on an original construction cost of $6,815,002 and no interest. For reporting purposes, the lease is considered a capital lease under GASB Statement No. 62. The initial obligation was discounted at an imputed interest rate of 6.45% and was recorded at $2,981,939. The asset, which is included in the Property Under Capital Lease and Leasehold Improvements, was recorded at a cost of $6,815,002. A summary of pertinent information related to the two capital leases appears in Table 16.
| Table 16. Capital Leases Payable | |||
|---|---|---|---|
| Capital Leases | Interest Rate | Original Balance | Outstanding Balance |
| Garage No. 06 (607 spaces) | 6.45% | $ 1,382,470 | $ 610,069 |
| Garage No. 10 (800 spaces) | 6.45% | 2,981,939 | 2,053,899 |
| Total | $ 4,364,409 | $ 2,663,968 | |
Future minimum payments under the capital lease agreements and the present value of the minimum payments as of June 30, 2016, are presented in Table 17.
| Table 17. Capital Leases Payable - Principal & Interest | |||
|---|---|---|---|
| Fiscal Year Ending June 30 | Principal | Interest | Total |
| 2017 | $ 155,341 | $ 171,826 | $ 327,167 |
| 2018 | 165,360 | 161,806 | 327,166 |
| 2019 | 176,026 | 151,141 | 327,167 |
| 2020 | 187,380 | 139,787 | 327,167 |
| 2021 | 199,466 | 127,701 | 327,167 |
| 2022-2026 | 1,001,282 | 434,552 | 1,435,834 |
| 2027-2030 | 779,113 | 129,554 | 908,667 |
| Total | $ 2,663,968 | $ 1,316,367 | $ 3,980,335 |
Employees earn the right to be compensated during absences for annual leave (vacation) and sick leave earned pursuant to Board of Governors Regulations, University Regulations, and bargaining agreements. Leave earned is accrued to the credit of the employee and records are kept on each employee’s unpaid (unused) leave balance. The University reports a liability for the accrued leave in accordance with its policy regarding leave payment upon separation from employment. However, noncapital state appropriations fund only the portion of accrued leave that is used or paid in the current fiscal year. Although the University expects the liability to be funded primarily from future appropriations, generally accepted accounting principles do not permit the recording of a receivable in anticipation of future appropriations.
At June 30, 2016, the estimated liability for compensated absences, which includes the University’s share of the Florida Retirement System and FICA contributions, totaled $117,310,651. The current portion of the compensated absences liability is the amount expected to be paid in the coming fiscal year and is based on actual payouts over the last three years, calculated as a percentage of those years’ total compensated absences liability. The University no longer pays out sick time upon separation of service for the vast majority of employees effective June 30, 2016.
The University follows Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, for certain postemployment healthcare benefits administered by the State Group Health Insurance Program.
Plan Description - Pursuant to the provisions of Section 112.0801, Florida Statutes, all employees who retire from the University are eligible to participate in the State Group Health Insurance Program, an agent multiple-employer, defined benefit plan (Plan). The University subsidizes the premium rates paid by retirees by allowing them to participate in the Plan at reduced or blended group (implicitly subsidized) premium rates for both active and retired employees. These rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the Plan, on average, than those of active employees. Retirees are required to enroll in the Federal Medicare program for their primary coverage as soon as they are eligible. A stand-alone report is not issued and the Plan information is not included in the report of a public employee retirement system or another entity.
Funding Policy - Plan benefits are pursuant to provisions of Section 112.0801, Florida Statutes, and benefits and contributions can be amended by the Florida Legislature. The State has not advance-funded Other Postemployment Benefit (OPEB) costs or the net OPEB obligation. Premiums necessary for funding the Plan each year on a pay-as-you-go basis are established by the Governor’s recommended budget and the General Appropriations Act. For the 2015-16 fiscal year, 2,722 retirees received postemployment healthcare benefits. The University provided required contributions of $12,415,000 toward the annual OPEB cost, comprised of benefit payments made on behalf of retirees for claims expenses (net of reinsurance), administrative expenses, and reinsurance premiums. Retiree contributions totaled $18,370,000, which represents 1.6% of covered payroll.
Annual OPEB Cost and Net OPEB Obligation - The University’s annual OPEB cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. Table 18 shows the University’s annual OPEB cost for the fiscal year, the amount actually contributed to the Plan, and the changes in the University’s net OPEB obligation.
| Table 18. Annual OPEB Cost and Net OPEB Obligation | |
|---|---|
| Description | Amount |
| Normal Cost (service cost for one year) | $ 30,639,000 |
| Amortization of Unfunded Acturial Accrued Liability | 28,897,000 |
| Interest on Normal Cost and Amortization | 2,382,000 |
| Annual Required Contribution | 61,918,000 |
| Interest on Net OPEB Obligation | 8,702,000 |
| Adjustment to Annual Required Contribution | (8,038,000) |
| Annual OPEB Cost (Expense) | 62,582,000 |
| Contribution Toward the OPEB Cost | (12,415,000) |
| Increase in Net OPEB Obligation | 50,167,000 |
| Net OPEB Obligation, Beginning of Year | 217,539,000 |
| Net OPEB Obligation, End of Year | $ 267,706,000 |
The University’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation as of June 30, 2016, and for the two preceding fiscal years, are presented in Table 19.
| Table 19. Annual OPEB Cost, Percentage Contributed, and Net Obligation | |||
|---|---|---|---|
Fiscal Year |
Annual OPEB Cost |
Percentage of Annual OPEB Cost Contributed |
Net OPEB Obligation |
| 2013-14 | $ 48,595,000 | 15.8% | $ 180,690,000 |
| 2014-15 | $ 43,657,000 | 15.6% | $ 217,539,000 |
| 2015-16 | $ 62,582,000 | 19.8% | $ 267,706,000 |
Funded Status and Funding Progress - As of July 1, 2015, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $782,069,000 and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability of $782,069,000 and a funded ratio of 0%. The covered payroll (annual payroll of active participating employees) was $1,120,515,686 for the 2015-16 fiscal year, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 69.8%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment and termination, mortality, and healthcare cost trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as required supplementary information following the Notes to the Financial Statements, presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
Actuarial Methods and Assumptions - Projections of benefits for financial reporting purposes are based on the substantive Plan provisions, as understood by the employer and participating members, and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and participating members. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
The University’s OPEB actuarial valuation as of July 1, 2015, used the entry-age cost actuarial method to estimate the actuarial accrued liability as of June 30, 2016, and the University’s estimated 2015-16 fiscal year annual required contribution. This method was selected because it is the same method used for the valuation of the Florida Retirement System. Because the OPEB liability is currently unfunded, the actuarial assumptions included a 4.00% rate of return on invested assets. The actuarial assumptions also included a payroll growth rate of 3.25% per year and an inflation rate of 3.00%. Healthcare trend rates were 3.10%, 7.50%, and 8.80% for the first three years respectively for all retirees in the Preferred Provider Organization (PPO) Plan and were 3.00%, 5.70%, and 7.00% for the first three years for all retirees in the Health Maintenance Organization (HMO) Plan. The PPO and HMO healthcare trend rates both grade down to an ultimate rate of 3.90% over 60 years. The unfunded actuarial accrued liability is being amortized over 30 years using the level percentage of projected payroll on an open basis.
Interdepartmental sales between auxiliary service departments and other institutional departments have been eliminated from expenses and revenues for reporting purposes. The interdepartmental transactions eliminated in the financial statement preparation totaled $123,208,694 for the fiscal year ended June 30, 2016.
The University follows GASB Statement No. 68, Accounting and Financial Reporting for Pensions, for reporting the employer’s proportionate share of the net pension liabilities for the FRS and HIS defined benefit plans.
General information about the Florida Retirement System (FRS) and Health Insurance Subsidy (HIS) Program
The Florida Retirement System (FRS) was created in Chapter 121, Florida Statutes. The FRS was created to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan to assist retired members of any State-administered retirement system in paying the costs of health insurance. Chapter 121, Florida Statutes, also provides for nonintegrated, optional retirement programs in lieu of the FRS to certain members of the Senior Management Service Class (SMSC) employed by the State as well as faculty and specified employees in the State university system.
Essentially all regular employees of the University are eligible to enroll as members of the State-administered FRS. Provisions relating to the FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112, Part IV, Florida Statutes; Chapter 238, Florida Statutes; and Florida Retirement System Rules, Chapter 60S, Florida Administrative Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Department of Management Services, Division of Retirement, and consists of two cost-sharing, multiple-employer defined benefit plans, and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services website (www.dms.myflorida.com).
The University’s pension expense totaled $36,206,259 for the 2015-16 fiscal year for both the FRS Pension Plan and HIS Program.
1. Florida Retirement System Defined Benefit Pension Plan
Plan Description - The FRS Pension Plan (Plan) is a cost-sharing, multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program (DROP) for eligible employees. The general classes of membership are as follows:
Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service, and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62, or at any age after 30 years of service, except for members classified as special risk who are eligible for normal retirement benefits at age 55, or at any age after 25 years of service. All vested members enrolled in the Plan on or after July 1, 2011, are eligible for normal retirement benefits at age 65, or any time after 33 years of creditable service, except for members classified as special risk who are eligible for normal retirement benefits at age 60, or at any age after 30 years of service. Employees enrolled in the Plan may include up to four years of military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants.
DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS-participating employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits.
Benefits Provided - Benefits under the Plan are computed on the basis of age, and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years’ earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years’ earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on retirement plan and/or the class to which the member belonged when the service credit was earned. Members are eligible for in-line-of-duty or regular disability and survivors benefits. Table 20 shows the percentage value for each year of service credit earned.
As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3.00% per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3.00%, determined by dividing the sum of the pre-July 2011 service credit by the total service credit at retirement, multiplied by 3.00%. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement.
| Table 20. Class, Initial Enrollment, and Retirement Age/Years of Service | |
|---|---|
| Value | |
| Regular Class members initially enrolled before July 1, 2011 | |
| Retirement up to age 62 or up to 30 years of service | 1.60% |
| Retirement at age 63 or with 31 years of service | 1.63% |
| Retirement at age 64 or with 32 years of service | 1.65% |
| Retirement at age 65 or with 33 or more years of service | 1.68% |
| Regular Class members initially enrolled on or after July 1, 2011 | |
| Retirement up to age 65 or up to 33 years of service | 1.60% |
| Retirement at age 66 or with 34 years of service | 1.63% |
| Retirement at age 67 or with 35 years of service | 1.65% |
| Retirement at age 68 or with 36 or more years of service | 1.68% |
| Special Risk Regular | |
| Service on and after October 1, 1974 | 3.00% |
| Senior Management Service Class | 2.00% |
Contributions - The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2015-16 fiscal year are shown in Table 21. The University’s contributions to the Plan totaled $38,017,855 for the fiscal year ended June 30, 2016.
Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2016, the University reported a liability of $204,919,550 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2015. The University’s proportionate share of the net pension liability was based on the University’s 2014-15 fiscal year contributions relative to the total 2014-15 fiscal year contributions of all participating members. At June 30, 2015, the University’s proportionate share was 1.59%, which was an increase of 0.07 from its proportionate share of 1.52% measured as of June 30, 2014.
| Table 21. Florida Retirement System Rates | ||
|---|---|---|
| Percent of Gross Salary | ||
| Class | Employee | Employer (A) |
| Florida Retirement System, Regular | 3.00% | 7.26% |
| Florida Retirement System, Senior Management Service | 3.00% | 21.43% |
| Florida Retirement System, Special Risk | 3.00% | 22.04% |
| Deferred Retirement Option Program-Applicable to Members from All of the Above Classes | 0.00% | 12.88% |
| Florida Retirement System, Reemployed Retiree | (B) | (B) |
|
(A) Employer rates for each membership class include 1.66% for Health Insurance Subsidy. Also, employer rates, other than for DROP participants, include 0.04% for administrative costs of the Investment Plan. (B) Contribution Rates are dependent upon retirement class in which reemployed. |
||
For the year ended June 30, 2016, the University recognized pension expense of $24,127,826. At June 30, 2016, the University reported deferred outflows of resources and deferred inflows of resources related to pensions as presented in Table 22.
| Table 22. Deferred Outflows and Inflows Related to Pensions - FRS | |||
|---|---|---|---|
Description |
Deferred Outflows of Resources | Deferred Inflows of Resources | Recognition Period |
| Differences Between Expected and Actual Experience | $ 21,633,437 | $ 4,860,068 | 6.3 years |
| Change of Assumptions | 13,601,198 | - | 6.3 years |
| Net Difference Between Projected and Actual Earnings on FRS Plan Investments | - | 48,931,359 | 5.0 years |
| Changes in Proportion and Difference Between University Contributions and Proportionate Share of Contributions | 42,433,688 | - | 6.3 years |
| University FRS Contributions Subsequent to the Measurement Date | 38,017,855 | - | 1.0 year |
| Total | $ 115,686,178 | $ 53,791,427 |
The deferred outflows of resources related to pensions totaling $38,017,855, resulting from University contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as shown in Table 23.
| Table 23. Recognition of Deferred Outflows and Inflows Related to Pensions - FRS | |
|---|---|
| Fiscal Year Ending June 30 | Amount |
| 2017 | $ (6,733,457) |
| 2018 | (6,733,457) |
| 2019 | (6,733,457) |
| 2020 | 33,636,443 |
| 2021 | 8,711,844 |
| Thereafter | 1,728,980 |
| Total | $ 23,876,896 |
Actuarial Assumptions - The total pension liability in the July 1, 2015, actuarial valuation was determined using the following actuarial assumptions applied to all periods included in the measurement, as presented in Table 24.
| Table 24. Actuarial Assumptions - FRS | |
|---|---|
| Inflation | 2.60% |
| Salary Increases | 3.25%, average, including inflation |
| Investment Rate of Return | 7.65%, net of pension Plan invesment expense, including inflation |
Mortality rates were based on the Generational RP-2000 with Projection Scale BB.
The actual assumptions used in the July 1, 2015, valuation were based on the results of an actuarial experience study for the period July 1, 2008, through June 30, 2013.
The long-term expected rate of return on pension Plan investments was not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions and includes an adjustment for the inflation assumption. The target allocation and best estimates of long-term expected rates of arithmetic return for each major asset class are summarized in Table 25.
| Table 25. Target Allocation and Expected Rate of Return | ||
|---|---|---|
| Asset Class | Target Allocation | Long-term Expected Rate of Return |
| Cash | 1.00% | 3.20% |
| Fixed Income | 18.00% | 4.80% |
| Global Equity | 53.00% | 8.50% |
| Real Estate (Property) | 10.00% | 6.80% |
| Private Equity | 6.00% | 11.90% |
| Strategic Investments | 12.00% | 6.70% |
| Total | 100.00% |
Discount Rate - The discount rate used to measure the total pension liability was 7.65%. The Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return.
Sensitivity of the University’s Proportionate Share of the Net Position Liability to Changes in the Discount Rate - Table 26 presents the University’s proportionate share of the net pension liability calculated using the discount rate of 7.65%, as well as what the University’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (6.65%) or 1 percentage point higher (8.65%) than the current rate.
| Table 26. Sensitivity to Changes in Discount Rate - FRS | |||
|---|---|---|---|
| 1% Decrease 6.65% |
Current Discount Rate 7.65% |
1% Increase 8.65% |
|
| University's Proportionate Share of the Net Pension Liability | $ 530,992,899 | $ 204,919,550 | $ (66,427,036) |
Pension Plan Fiduciary Net Position - Detailed information about the Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report.
2. Health Insurance Subsidy Defined Benefit Pension Plan
Plan Description - The HIS Pension Plan (HIS Plan) is a cost-sharing, multiple-employer defined benefit pension plan established under Section 112.363, Florida Statutes. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services.
Benefits Provided - For the fiscal year ended June 30, 2016, eligible retirees and beneficiaries received a monthly HIS payment equal to the number of years of creditable service completed at the time of retirement, multiplied by $5. The payments are at least $30, but not more than $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which can include Medicare.
Contributions - The HIS Plan is funded by required contributions from FRS participating employers, as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended June 30, 2016, the contribution rate was 1.66% of payroll pursuant to Section 112.363, Florida Statues. The University contributed 100% of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which HIS payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The University’s contributions to the HIS Plan totaled $7,538,309 for the fiscal year ended June 30, 2016.
Pension Liabilities, Pension Expense, and Deferred Outflows of Resources Related to Pensions - At June 30, 2016, the University reported a liability of $148,825,945 for its proportionate share of the net pension liability. The current portion of the net pension liability is the University’s proportionate share of benefit payments expected to be paid within one year, net of the University’s proportionate share of the HIS Plan's fiduciary net position available to pay that amount. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by applying update procedures to the HIS Plan actuarial valuation as of July 1, 2014. The University’s proportionate share of the net pension liability was based on the University’s 2014-15 fiscal year contributions relative to the total 2014-15 fiscal year contributions of all participating members. At June 30, 2015, the University’s proportionate share was 1.46%, which was an increase of 0.05 from its proportionate share of 1.41% measured as of June 30, 2014.
For the fiscal year ended June 30, 2016, the University recognized pension expense of $12,078,433. In addition, the University reported deferred outflows of resources related to pensions as presented in Table 27.
| Table 27. Deferred Outflows Related to Pension - HIS | ||
|---|---|---|
Description |
Deferred Outflows of Resources | Recognition Period |
| Change of Assumptions | $ 11,708,717 | 7.2 years |
| Net Difference Between Projected and Actual Earnings on HIS Plan Investments | 80,564 | 5.0 years |
| Changes in Proportion and Difference Between University Contributions and Propotionate Share of Contributions | 5,752,403 | 7.2 years |
| University HIS Contributions Subsequent to the Measurement Date | 7,538,309 | 1.0 year |
| Total | $ 25,079,993 |
The deferred outflows of resources related to pensions totaling $7,538,309, resulting from University contributions subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2017. Other amounts reported as deferred outflows of resources related to pensions will be recognized in pension expense as shown in Table 28.
| Table 28. Recognition of Deferred Outflows Related to Pensions - HIS | |
|---|---|
| Fiscal Year Ending June 30 | Amount |
| 2017 | $ 3,029,965 |
| 2018 | 3,029,965 |
| 2019 | 3,029,965 |
| 2020 | 3,013,591 |
| 2021 | 3,005,731 |
| Thereafter | 2,432,467 |
| Total | $ 17,541,684 |
Actuarial Assumptions - The total pension liability at July 1, 2015, determined by applying update procedures to the actuarial valuations at July 1, 2014, used the following actuarial assumptions, applied to all periods included in the measurement, as presented in Table 29.
| Table 29. Actuarial Assumptions - HIS | |
|---|---|
| Inflation | 2.60% |
| Salary Increases | 3.25%, average, including inflation |
| Municipal Bond Rate | 3.80% |
Mortality rates were based on the Generational RP-2000 with Projected Scale BB.
While an experience study had not been completed for the HIS Plan, the actuarial assumptions that determined the total pension liability for the HIS Plan were based on certain results of the most recent experience study for the FRS Plan.
Discount Rate - The discount rate used to measure the total pension liability was 3.80%, which was a decrease of 0.49% from the prior measurement date. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index.
Sensitivity of the University’s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - Table 30 presents the University’s proportionate share of the net pension liability calculated using the discount rate of 3.80%, as well as what the University’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.80%) or 1 percentage point higher (4.80%) than the current rate.
| Table 30. Sensitivity to Changes in Discount Rate - HIS | |||
|---|---|---|---|
| 1% Decrease 2.80% |
Current Discount Rate 3.80% |
1% Increase 4.80% |
|
| University's Proportionate Share of the Net Pension Liability | $ 169,580,236 | $ 148,825,945 | $ 131,519,981 |
Pension Plan Fiduciary Net Position - Detailed information about the HIS Plan’s fiduciary net position is available in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report.
1. FRS Investment Plan
TThe State Board of Administration (SBA) administers the defined contribution plan officially titled the FRS Investment Plan (Investment Plan). The Investment Plan is reported in the SBA’s annual financial statements and in the State of Florida Comprehensive Annual Financial Report.
As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined benefit plan. University employees already participating in the State University System Optional Retirement Program or DROP are not eligible to participate in this program. Employer and employee contributions are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Service retirement benefits are based upon the value of the member’s account upon retirement. Benefit terms, including contribution requirements, are established and may be amended by the Florida Legislature.
The Investment Plan is funded with the same employer and employee contributions as the FRS defined benefit plan; these contributions are based on salary and membership class (Regular Class, Senior Management Service Class, etc.). Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04% of payroll and by forfeited benefits of plan members. Allocations to the Investment Plan member accounts during the 2015-16 fiscal year are presented in Table 31.
| Table 31. Florida Retirement System - Investment Plan Rates | |
|---|---|
| Class | Percent of Gross Compensation |
| Florida Retirement System, Regular | 6.30% |
| Florida Retirement System, Senior Management Service | 7.67% |
| Florida Retirement System, Special Risk | 14.00% |
For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the FRS Investment Plan, the member must have the years of service required for FRS Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Non-vested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-covered employment within the five-year period, the employee will regain control over his or her account. If the employee does not return within the five-year period, the employee will forfeit the accumulated account balance. For the fiscal year ended June 30, 2016, the information for the amount of forfeitures was unavailable from the SBA; however, management believes these amounts, if any, would be immaterial to the University.
After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump- sum distribution, leave the funds invested for future distribution, or select any combination of these options. Disability coverage is provided in which the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income.
There were 2,004 University participants during the 2015-16 fiscal year. The University’s Investment Plan pension expense totaled $6,603,108 for the fiscal year ended June 30, 2016.
2. State University System Optional Retirement Program
Section 121.35, Florida Statutes, provides for an Optional Retirement Program (Program) for eligible university instructors and administrators. The Program is designed to aid State universities in recruiting employees by offering more portability to employees not expected to remain in FRS for eight or more years.
The Program is a defined contribution plan, which provides full and immediate vesting of all contributions submitted to the participating investment companies on behalf of the participant. Employees in eligible positions can make an irrevocable election to participate in the Program, rather than the FRS, and purchase retirement and death benefits through contracts provided by certain insurance carriers. The employing university contributes 5.14% of the participant’s salary to the participant’s account, 2.65% to cover the unfunded actuarial liability of the FRS pension plan, and 0.01% to cover administrative costs. Employees contribute 3.00% of their salary. Additionally, the employee may contribute, by payroll deduction, an amount not to exceed the percentage contributed by the University to the participant’s annuity account. The contributions are invested in the company or companies selected by the participant to create a fund for the purchase of annuities at retirement.
There were 6,289 University participants during the 2015-16 fiscal year. The University’s contributions to the Program totaled $36,642,646 and employee contributions totaled $25,314,817 for the 2015-16 fiscal year.
1. U.S. Civil Service Retirement System
Some University employees participate in the U.S. Civil Service Retirement System. Twenty employees were covered by the U.S. Civil Service Retirement System during the 2015-16 fiscal year. Employer contributions totaled $132,877, and employee contributions totaled $132,821 for the 2015-16 fiscal year. The University’s participation in the Federal retirement system is not considered material by University management.
2. Institute of Food and Agricultural Sciences Supplemental Retirement
In 1984, the Florida Legislature enacted the Institute of Food and Agricultural Sciences Supplemental Retirement Act to provide a supplement to the monthly retirement benefit being paid under the Federal Civil Service Retirement System to retirees of the Institute of Food and Agricultural Sciences (IFAS) at the University of Florida. The supplement is designated for IFAS cooperative extension employees employed before July 1, 1983, who are not entitled to benefits from either a State-supported retirement system or social security based on their service with IFAS. It was intended to compensate these IFAS employees for the difference between their Civil Service benefit and the benefits an FRS member receives, which include a social security benefit. No additional persons can become eligible for this supplement.
There were 18 University participants during the 2015-16 fiscal year. Required employer contributions made to the program totaled $330,834. Employees do not contribute to this program.
The University’s construction commitments at June 30, 2016, are presented in Table 32.
| Table 32. Construction Project Commitements | |||
|---|---|---|---|
| Project Title | Total Commitment | Completed to Date | Balance Committed |
| Stephen O'Connell Center Renovation and Addition | $ 65,930,000 | $ 18,948,906 | $ 46,981,094 |
| Chemistry/Chemical Biology Building | 59,000,000 | 50,379,733 | 8,620,267 |
| NEXUS Engineering Addition | 53,000,000 | 1,412,498 | 51,587,502 |
| Newell Hall Renovation | 18,449,057 | 5,252,534 | 13,196,523 |
| Innovation Hub, Phase II | 17,200,000 | 369,902 | 16,830,098 |
| UF Health Proton Therapy Institute Gantry Expansion | 9,415,000 | 98,993 | 9,316,007 |
| Career Resource Center Addition and Renovation | 7,698,170 | 109 | 7,698,061 |
| Rabon Steam Boiler Design/Installation | 7,095,707 | 96,553 | 6,999,154 |
| Electrical Substation 2 - Cable and Switchgear Replacement | 5,400,000 | 271 | 5,399,729 |
| Basic Sciences Building - Ground Floor Renovation | 5,227,687 | 2,583,528 | 2,644,159 |
| Corry Village Building 278 Renovation | 2,846,675 | 2,338,175 | 508,500 |
| Corry Village Building 277 Renovation | 2,783,730 | 2,223,313 | 560,417 |
| Corry Village Building 284 Renovation | 2,709,068 | 2,506,123 | 202,945 |
| Buckman Air Conditioning Design & Installation | 2,515,800 | 2,068,824 | 446,976 |
| Key Complex Buildings 1002, 1003, 1004, 1005 & 1009 Renovations | 2,500,000 | 1,730,557 | 769,443 |
| Nature Coast Biological Station | 2,265,761 | 209,596 | 2,056,165 |
| FMNH Discovery Room Powell Hall Building 308 | 2,020,000 | 37,430 | 1,982,570 |
| Joint Use Library Storage Facility | 2,019,176 | 1,516,636 | 502,540 |
| Keys Common Building 1001 Renovation | 2,000,000 | 519,256 | 1,480,744 |
| Subtotal | 270,075,831 | 92,292,937 | 177,782,894 |
| Projects Under $2,000,000 | 77,236,360 | 37,237,330 | 39,999,030 |
| Total | $ 347,312,191 | $ 129,530,267 | $ 217,781,924 |
The University is exposed to various risks of loss related to torts; damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Pursuant to Section 1001.72(2), Florida Statutes, the University participates in State self-insurance programs providing insurance for property and casualty, workers’ compensation, general liability, fleet automotive liability, Federal Civil Rights, and employment discrimination liability. During the 2015-16 fiscal year, for property losses, the State retained the first $2 million per occurrence for all perils except named windstorm and flood. The State retained the first $2 million of losses per occurrence with an annual aggregate retention of $40 million for named windstorm and flood losses. After the annual aggregate retention, losses in excess of $2 million per occurrence were commercially insured up to $85 million for named windstorm and flood losses. For perils other than named windstorm and flood, losses in excess of $2 million per occurrence were commercially insured up to $200 million, and losses exceeding those amounts were retained by the State. No excess insurance coverage is provided for workers’ compensation, general and automotive liability, Federal Civil Rights and employment action coverage; all losses in these categories are completely self-insured by the State through the State Risk Management Trust Fund established pursuant to Chapter 284, Florida Statutes. Payments on tort claims are limited to $200,000 per person, and $300,000 per occurrence as set by Section 768.28(5), Florida Statutes. Calculation of premiums considers the cash needs of the program and the amount of risk exposure for each participant. There have been no significant reductions in insurance coverage from the prior year coverage. Settlements have not exceeded insurance coverage during the past three fiscal years.
Pursuant to Section 110.123, Florida Statutes, University employees may obtain healthcare services through participation in the State’s group health insurance plan or through membership in a health maintenance organization plan under contract with the State. The State’s risk financing activities associated with State group health insurance, such as risk of loss related to medical and prescription drug claims, are administered through the State Employees Group Health Insurance Trust Fund. It is the practice of the State not to purchase commercial coverage for the risk of loss covered by this Fund. Additional information on the State’s group health insurance plan, including the actuarial report, is available from the Florida Department of Management Services, Division of State Group Insurance.
The University of Florida Self-Insurance Program (the Program) and the University of Florida Healthcare Education Insurance Company (HEIC), which are included in the University’s reporting entity as discretely presented component units (see Notes 1, 2, and 3), provide general and professional liability protection for the University of Florida Board of Trustees (UFBOT) on behalf of the six health colleges of the JHMHC, the College of Veterinary Medicine teaching hospitals, the Student Health Care Center, direct-support organizations, and their employees and agents. Hospital professional liability protection, including general liability, is provided to Shands Teaching Hospital and Clinics, Inc., Shands Jacksonville Medical Center, Inc. (a subsidiary of Shands Jacksonville HealthCare, Inc.-Shands Jacksonville), other entities statutorily authorized to participate in the Program, and their employees and agents.
The UFBOT and other immune entities are protected for losses which are subject to Section 768.28, Florida Statutes, including legislative claims bills, that in combination with the waiver of immunity limits described in Section 768.28, Florida Statutes, do not exceed $1 million per claim and, for voluntary settlements, $2 million per claim. For those protected entities not subject to Section 768.28, Florida Statutes, the Program provides $2 million per claim. The per claim limit of liability protection for the participants does not exceed $2 million per claim in the event more than one protected entity is involved in the same claim or action.
HEIC provides coverage for claims that are in excess of the protections provided by the Program, at limits of $4 million per legislative claims bill coverage for participants subject to Section 768.28, Florida Statutes.
The University is involved in several pending and threatened legal actions. The range of potential loss from all such claims and actions, as estimated by the University’s legal counsel and management, should not materially affect the University’s financial position.
The U.S. Agency for International Development (USAID), through its Lima, Peru office, is in the process of conducting a financial review of a Trilateral Cooperative Agreement that was awarded to the University of Florida in 2011 and terminated in 2016. Concurrently, the Office of Inspector General for USAID is reviewing the activities involved in the project. At this time, the University is not able to make definitive determinations about any potential outcome of these reviews.
The functional classification of operating expenses (instruction, research, etc.) is assigned to each individual transaction based on the nature of the activity. The operating expenses on the Statement of Revenues, Expenses, and Changes in Net Position are presented by natural classification. Table 33 presents those same expenses in functional classification as recommended by NACUBO.
| Table 33. Functional Expenses | |
|---|---|
| Functional Classification | Amount |
| Instruction | $ 674,917,265 |
| Research | 619,862,114 |
| Public Service | 583,476,826 |
| Academic Support | 187,635,507 |
| Institutional Support | 161,804,934 |
| Depreciation | 132,523,098 |
| Operation and Maintenance of Plant | 120,616,393 |
| Auxiliary Operations | 111,975,816 |
| Scholarships, Fellowships, and Waivers, Net | 100,159,027 |
| Student Services | 39,003,979 |
| Total Operating Expenses | $ 2,731,974,959 |
The University’s financial statements include 16 discretely presented component units as discussed in Note 1. These component units comprise 100% of the transactions and account balances of the aggregate discretely presented component units columns of the financial statements. Summary financial information from the most recently available audited financial statements for these component units is presented on the following pages in Tables 34, 35, and 36.
| Table 34. Direct-Support Organizations (amounts expressed in thousands) | ||||
|---|---|---|---|---|
| University of Florida Foundation, Inc. | The University Athletic Association, Inc. | University of Florida Research Foundation, Inc. | GatorCare Health Management Corporation | |
| CONDENSED STATEMENT OF NET POSITION | ||||
| Assets | ||||
| Due from Component Units/University | $ 39,401 | $ 5,756 | $ 108,800 | $ 83 |
| Other Current Assets | 138,621 | 71,866 | 8,450 | 17,554 |
| Capital Assets, Net | 92,784 | 193,185 | - | 9 |
| Other Noncurrent Assets | 1,528,561 | 56,241 | - | 30,237 |
| Total Assets | 1,799,367 | 327,048 | 117,250 | 47,883 |
| Liabilities | ||||
| Due to Component Units/University | 41,391 | - | 13,951 | 13,551 |
| Other Current Liabilities | 20,183 | 78,514 | 7,161 | 23,301 |
| Noncurrent Liabilities | 37,632 | 91,082 | - | 10,567 |
| Total Liabilities | 99,206 | 169,596 | 21,112 | 47,419 |
| Net Position | ||||
| Net Investment in Capital Assets | - | 101,736 | - | 9 |
| Restricted-Nonexpendable Endowment | 1,273,386 | - | - | - |
| Restricted-Expendable Endowment | 266,525 | - | - | - |
| Restricted-Expendable Other | 168,465 | - | - | - |
| Unrestricted | (8,215) | 55,716 | 96,138 | 455 |
| Total Net Position | $ 1,700,161 | $ 157,452 | $ 96,138 | $ 464 |
| CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION | ||||
| Operating Revenues | $ 134,227 | $ 135,324 | $ 36,049 | $ 988 |
| Operating Expenses | (188,543) | (124,397) | (35,949) | (980) |
| Operating Income (Loss) | (54,316) | 10,927 | 100 | 8 |
| Nonoperating Revenues (Expenses) and Other Revenues, Expenses, Gains, or Losses | ||||
| Investment Income, Net of Expenses | (52,643) | 1,710 | 28 | 266 |
| Net Increase (Decrease) in the Fair Value of Investments | (868) | (3,000) | 126 | - |
| Other Nonoperating Revenues | - | 9,194 | 2,300 | - |
| Other Nonoperating Expenses | (4,202) | (26,499) | (1,131) | - |
| Addition to Permanent Endowments | 48,585 | - | - | - |
| Change in Net Position | (63,444) | (7,668) | 1,423 | 274 |
| Net Position, Beginning of Year | 1,763,605 | 165,120 | 94,715 | 190 |
| Net Position, End of Year | $ 1,700,161 | $ 157,452 | $ 96,138 | $ 464 |
| Table 34. Direct-Support Organizations (continued) (amounts expressed in thousands) | ||||
|---|---|---|---|---|
Gator Boosters, Inc. |
University of Florida Development Corporation |
Citrus Research and Development Foundation, Inc. | Total Direct-Support Organizations |
|
| CONDENSED STATEMENT OF NET POSITION | ||||
| Assets | ||||
| Due from Component Units/University | $ 4,527 | $ - | $ - | $ 158,567 |
| Other Current Assets | 2,041 | 1,695 | 6,165 | 246,392 |
| Capital Assets, Net | 26 | 10,717 | - | 296,721 |
| Other Noncurrent Assets | 468 | - | - | 1,615,507 |
| Total Assets | 7,062 | 12,412 | 6,165 | 2,317,187 |
| Liabilities | ||||
| Due to Component Units/University | 5,756 | - | - | 74,649 |
| Other Current Liabilities | 200 | 237 | 1,100 | 130,696 |
| Noncurrent Liabilities | 85 | - | - | 139,366 |
| Total Liabilities | 6,041 | 237 | 1,100 | 344,711 |
| Net Position | ||||
| Net Investment in Capital Assets | 25 | 10,717 | - | 112,487 |
| Restricted-Nonexpendable Endowment | 468 | - | - | 1,273,854 |
| Restricted-Expendable Endowment | - | - | - | 266,525 |
| Restricted-Expendable Other | - | - | 5,065 | 173,530 |
| Unrestricted | 528 | 1,458 | - | 146,080 |
| Total Net Position | $ 1,021 | $ 12,175 | $ 5,065 | $ 1,972,476 |
| CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION | ||||
| Operating Revenues | $ 41,115 | $ 1,313 | $ 7,180 | $ 356,196 |
| Operating Expenses | (2,844) | (2,003) | (12,017) | (366,733) |
| Operating Income (Loss) | 38,271 | (690) | (4,837) | (10,537) |
| Nonoperating Revenues (Expenses) and Other Revenues, Expenses, Gains, or Losses | ||||
| Investment Income, Net of Expenses | 1,720 | - | 58 | (48,861) |
| Net Decrease in the Fair Value of Investments | - | - | - | (3,742) |
| Other Nonoperating Revenues | - | - | 8,000 | 19,494 |
| Other Nonoperating Expenses | (39,982) | - | - | (71,814) |
| Addition to Permanent Endowments | 7 | - | - | 48,592 |
| Change in Net Position | 16 | (690) | 3,221 | (66,868) |
| Net Position, Beginning of Year | 1,005 | 12,865 | 1,844 | 2,039,344 |
| Net Position, End of Year | $ 1,021 | $ 12,175 | $ 5,065 | $ 1,972,476 |
| Table 35. Health Science Center Affiliates (amounts expressed in thousands) | ||||||
|---|---|---|---|---|---|---|
| Florida Clinical Practice Association, Inc. | University of Florida Jacksonville Physicians, Inc. | Florida Veterinary Medicine Faculty Association, Inc. | University of Florida Jacksonville Healthcare, Inc. | Faculty Associates, Inc. |
Total Health Science Center Affiliates |
|
| CONDENSED STATEMENT OF NET POSITION | ||||||
| Assets | ||||||
| Due from Component Units/University | $ 28,576 | $ 5,077 | $ 8,602 | $ - | $ 1,500 | $ 43,755 |
| Other Current Assets | 99,520 | 59,788 | 1,972 | - | 11,253 | 172,533 |
| Capital Assets, Net | 45,424 | 19,525 | - | - | - | 64,949 |
| Other Noncurrent Assets | 15,550 | - | - | - | - | 15,550 |
| Total Assets | 189,070 | 84,390 | 10,574 | - | 12,753 | 296,787 |
| Liabilities | ||||||
| Due to Component Units/University | 4,685 | 269 | - | - | - | 4,954 |
| Other Current Liabilities | 4,470 | 20,141 | 1,137 | - | 258 | 26,006 |
| Noncurrent Liabilities | 33,505 | 4,475 | - | - | - | 37,980 |
| Total Liabilities | 42,660 | 24,885 | 1,137 | - | 258 | 68,940 |
| Net Position | ||||||
| Net Investment in Capital Assets | 11,520 | 14,266 | - | - | - | 25,786 |
| Unrestricted | 134,890 | 45,239 | 9,437 | - | 12,495 | 202,061 |
| Total Net Position | $ 146,410 | $ 59,505 | $ 9,437 | $ - | $ 12,495 | $ 227,847 |
| CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION | ||||||
| Operating Revenues | $ 564,042 | $ 249,247 | $ 9,550 | $ - | $ 19,684 | $ 842,523 |
| Operating Expenses | (124,681) | (127,857) | (531) | - | (297) | (253,366) |
| Operating Income | 439,361 | 121,390 | 9,019 | - | 19,387 | 589,157 |
| Nonoperating Revenues (Expenses) and Other Revenues, Expenses, Gains, or Losses | ||||||
| Investment Income (Loss), Net of Expenses | (208) | 58 | - | - | 4 | (146) |
| Net Decrease in the Fair Value of Investments | (1,350) | - | - | - | - | (1,350) |
| Other Nonoperating Expenses | (420,440) | (117,508) | (8,376) | - | (15,692) | (562,016) |
| Change in Net Position | 17,363 | 3,940 | 643 | - | 3,699 | 25,645 |
| Net Position, Beginning of Year | 129,047 | 55,196 | 8,794 | 369 | 8,796 | 202,202 |
| Adjustments to Beginning Net Position (Note 3) | - | 369 | - | (369) | - | - |
| Net Position, Beginning of Year, as Restated | 129,047 | 55,565 | 8,794 | - | 8,796 | 202,202 |
| Net Position, End of Year | $ 146,410 | $ 59,505 | $ 9,437 | $ - | $ 12,495 | $ 227,847 |
| Table 36. Shands Hospital and Others (amounts expressed in thousands) | |||||
|---|---|---|---|---|---|
Shands Teaching Hospital & Clinics, Inc. |
Shands Jacksonville HealthCare, Inc. |
University of Florida Self-Insurance Program |
University of Florida Healthcare Education Insurance Company | Total Shands Hospital and Others |
|
| CONDENSED STATEMENT OF NET POSITION | |||||
| Assets | |||||
| Due from Component Units/University | $ 24,550 | $ 7,189 | $ 36 | $ 50,785 | $ 82,560 |
| Other Current Assets | 495,666 | 302,855 | 192,232 | 4,031 | 994,814 |
| Capital Assets, Net | 848,106 | 208,445 | - | - | 1,056,551 |
| Other Noncurrent Assets | 681,104 | 49,454 | - | - | 730,558 |
| Total Assets | 2,049,426 | 567,973 | 192,268 | 54,816 | 2,864,483 |
| Deferred Outflows of Resources | |||||
| Deferred Amounts Related to Pensions | 113,245 | 8,772 | - | - | 122,017 |
| Accumulated Decrease in Fair Value of Interest Rate Swap Agreements | 72,224 | 773 | - | - | 72,997 |
| Losses on Debt Refunding | 416 | - | - | - | 416 |
| Total Assets and Deferred Outflows of Resources | 2,235,311 | 577,518 | 192,268 | 54,816 | 3,059,913 |
| Liabilities | |||||
| Due to Component Units/University | 8,389 | 683 | 50,786 | - | 59,858 |
| Other Current Liabilities | 261,228 | 101,457 | 5,312 | 10 | 368,007 |
| Noncurrent Liabilities | 968,986 | 269,894 | 29,647 | 4,700 | 1,273,227 |
| Total Liabilities | 1,238,603 | 372,034 | 85,745 | 4,710 | 1,701,092 |
| Deferred Inflows of Resources | |||||
| Deferred Amounts Related to Pensions | 57,207 | 5,306 | - | - | 62,513 |
| Accumulated Increase in Fair Value of Interest Rate Swap Agreements | - | 8,822 | - | - | 8,822 |
| Gains on Debt Refunding | 2,936 | - | - | - | 2,936 |
| Total Liabilities and Deferred Inflows of Resources | 1,298,746 | 386,162 | 85,745 | 4,710 | 1,775,363 |
| Net Position | |||||
| Net Investment in Capital Assets | 99,370 | 44,247 | - | - | 143,617 |
| Restricted-Nonexpendable Endowment | 97 | - | - | - | 97 |
| Restricted-Expendable Endowment | 9,959 | 4,123 | - | - | 14,082 |
| Other Restricted Net Position | - | - | 106,523 | 50,106 | 156,629 |
| Unrestricted | 827,139 | 142,986 | - | - | 970,125 |
| Total Net Position | $ 936,565 | $ 191,356 | $ 106,523 | $ 50,106 | $ 1,284,550 |
| CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION | |||||
| Operating Revenues | $ 1,358,156 | $ 665,438 | $ 9,581 | $ 1,064 | $ 2,034,239 |
| Operating Expenses | (1,219,170) | (625,042) | (9,302) | 1,785 | (1,851,729) |
| Operating Income | 138,986 | 40,396 | 279 | 2,849 | 182,510 |
| Nonoperating Revenues (Expenses) | |||||
| Investment Income, Net of Expenses | 12,528 | 10,502 | 4,116 | 1,631 | 28,777 |
| Net Increase in the Fair Value of Investments | 10,478 | - | - | - | 10,478 |
| Other Nonoperating Revenues | 6,027 | 15,321 | - | - | 21,348 |
| Other Nonoperating Expenses | (101,895) | (44,076) | - | - | (145,971) |
| Change in Net Position | 66,124 | 22,143 | 4,395 | 4,480 | 97,142 |
| Net Position, Beginning of Year | 870,441 | 169,213 | 102,128 | 45,626 | 1,187,408 |
| Net Position, End of Year | $ 936,565 | $ 191,356 | $ 106,523 | $ 50,106 | $ 1,284,550 |
A segment is defined as an identifiable activity (or grouping of activities) that has one or more bonds or other debt instruments outstanding, with a revenue stream pledged in support of that debt. In addition, the activity’s related revenues, expenses, gains, losses, assets, and liabilities are required to be accounted for separately. Transportation and Parking Services provides the University with safe and adequate parking facilities. Several parking garages have been constructed from the proceeds of revenue-backed debt instruments. The Department of Housing and Residence Education provides safe and affordable living space for students of the University of Florida. Capital improvement debt has been issued over the years to provide funding for the construction of facilities to house students of the University. A summary of the financial activity for these segments is presented in Table 37.
| Table 37. SEGMENT INFORMATION | ||
|---|---|---|
| Transportation and Parking Services | Department of Housing and Residence Education | |
| CONDENSED STATEMENT OF NET POSITION | ||
| Assets | ||
| Current Assets | $ 11,371,361 | $ 6,985,989 |
| Capital Assets, Net | 35,665,299 | 144,303,886 |
| Other Noncurrent Assets | 10,060,857 | 998,345 |
| Total Assets | 57,097,517 | 152,288,310 |
| Liabilities | ||
| Current Liabilities | 3,664,017 | 12,906,165 |
| Noncurrent Liabilities | 17,384,970 | 73,486,662 |
| Total Liabilities | 21,048,987 | 86,392,827 |
| Net Position | ||
| Net Investment in Capital Assets | 18,124,988 | 66,966,664 |
| Restricted | 9,988,456 | 493,747 |
| Unrestricted | 7,935,086 | (1,564,928) |
| Total Net Position | $ 36,048,530 | $ 65,895,483 |
| CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION | ||
| Operating Revenues (Expenses): | ||
| Operating Revenues | $ 22,842,616 | $ 59,716,641 |
| Depreciation Expense | (2,339,532) | (6,478,833) |
| Other Operating Expense | (14,112,200) | (43,520,571) |
| Operating Income | 6,390,884 | 9,717,237 |
| Nonoperating Revenues (Expenses): | ||
| Investment Income | 28,130 | 49,083 |
| Interest on Capital Asset-Related Debt | (908,819) | (3,338,486) |
| Other Nonoperating Revenues (Expenses) | 1,139,165 | (2,369,828) |
| Net Nonoperating Revenues (Expenses) | 258,476 | (5,659,231) |
| Change in Net Position | 6,649,360 | 4,058,006 |
| Net Position, Beginning of Year | 29,399,170 | 61,837,477 |
| Net Position, End of Year | $ 36,048,530 | $ 65,895,483 |
| CONDENSED STATEMENT OF CASH FLOWS | ||
| Net Cash Provided (Used) by: | ||
| Operating Activities | $ 8,888,208 | $ 12,552,900 |
| Noncapital Financing Activities | (720,821) | (1,959,204) |
| Capital and Related Financing Activities | (3,743,099) | (14,364,602) |
| Investing Activities | (4,424,288) | 5,534,472 |
| Net Increase in Cash and Cash Equivalents | - | 1,763,556 |
| Cash and Cash Equivalents, Beginning of Year | - | 4,570,749 |
| Cash and Cash Equivalents, End of Year | $ - | $ 6,334,315 |
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