The significant accounting policies followed by the University of Florida are described below to enhance the usefulness of the financial statements.

A. Reporting Entity

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 arediscretely presented in the State’s Comprehensive Annual Financial Report.

B. Discretely Presented Component Units

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 20.

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 $25 million and $18 million, respectively. These amounts represent less than one percent of the total aggregate component units’ assets and operating revenues.

C. Direct-Support Organizations

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 in achieving excellence by providing supplemental resources from private gifts and bequests and valuable education support services. Florida Statutes authorize 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.

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.

University of Florida Development Corporation develops and maintains Innovation Square where the Universityowned Florida Innovation Hub is located.

Gator Boosters, Inc., solicits funds for the benefit of the University athletic programs.

Citrus Research and Development Foundation, Inc., Inc., advances 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 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.,* furthers agriculture and natural resource education and related activities, promotes agriculture and natural resources leadership, and makes 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.

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.

Cattle Enhancement Board, Inc.,* promotes research, education and extension at, or for the benefit of, the Institute of Food and Agricultural Sciences at the University of Florida on issues related to the Florida cattle industry, including, but not limited to production, disease prevention, forage development, and genetic research and technology.

In June 2019, the Trustees decertified the following directsupport organizations: The University of Florida Law Center Association, Inc., Citrus Research and Education Foundation, Inc., and Treasure Coast Agricultural Research Foundation, Inc.

D. Health Science Center Affiliates

The corporations listed below, except 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 professional fees from the clinical practice of the University of Florida physicians in order to fund and promote the educational, clinical and research missions, and support the clinical activities, of the Jacksonville campus of the College of 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.

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.

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.

Faculty Clinic, Inc.,* 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.

E. Shands Hospital and Others

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 with the State Board of Education as of July 1, 1980, as subsequently restated and amended, to provide for the use of hospital facilities at the JHMHC through December 31, 2057, 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.

F. Basis of Presentation

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:

• Management's Discussion and Analysis
• Basic Financial Statements:
1. Statement of Net Position
2. Statement of Revenues, Expenses, and Changes in Net Position
3. Statement of Cash Flows
4. Notes to the Financial Statements
• Other Required Supplementary Information

G. Measurement Focus and Basis of Accounting

Basis of accounting refers to when revenues, expenses, 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 and its component unit’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 and its component units, including those which previously followed FASB as discussed in Note 2, follow GASB standards of accounting and financial reporting.

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 state noncapital appropriations, federal and state student financial aid, and investment income. Interest on capital asset-related debt is a nonoperating expense. Other revenues generally include revenues for capital construction projects.

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 resourcesto 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, using a ratio of total aid toaid 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.

H. Cash and Cash Equivalents

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.

I. Investments and Fair Value Measurement

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.

J. Capital Assets

University capital assets consist of land, construction in progress, intangibles work 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 buildingsand 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 the entire amount if the costs are at least 25% of the cost basis of the building. Depreciation is computed on the straight-line basis over the following estimated useful lives:

• Buildings - 5 to 50 years, depending on construction
• Infrastructure and Other Improvements - 10 to 50 years
• Furniture and Equipment - 3 to 20 years
• Library Resources - 10 years
• Property Under Capital Lease and Leasehold Improvements - up to 50 years
• Computer Software - 5 years

K. Noncurrent Liabilities

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.

L. Pensions

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 positions 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 and HIS fiduciary net positions have been determined on the same basis as they are reported by the FRS and the HIS plans. 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. 83, Certain Asset Retirement Obligations. This statement addresses accounting and financial reporting for asset retirement obligations (AROs) of governments that have legal obligations to perform future asset retirement activities related to its tangible capital assets. This Statement establishes criteria for determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of resources for AROs, and requires additional note disclosures about a government’s AROs.

The University also implemented GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, which amends GASB Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments, paragraph 119; and GASB Statement No. 38, Certain Financial Statement Note Disclosures, paragraphs 10 and 12. This statement improves the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements, and clarifies which liabilities governments should include when disclosing information related to debt. This Statement also requires that additional essential information related to debt be disclosed in notes to financial statements.

The Florida Legislature passed, and the Governor signed into law Chapter 2018-004, Laws of Florida, a provision that changed Section 1004.28, Florida Statutes, which addresses University's direct-support organizations (DSO). With this change, the University Board of Trustees is required to approve all DSO's board members. Under current accounting guidance, a key factor in determining whether a DSO should report under the FASB versus the GASB is board control. With the change in Florida Statutes, the University has control of the boards of the DSOs and the FASB reported model is no longer appropriate. Three discretely presented component units reported under FASB prior to the legislative change and converted from FASB to GASB reporting model for the 2018-19 fiscal year.

The beginning net position of the University of Florida Foundation, Inc. (Foundation) was decreased by $82,776,224 as a result of the change in the financial accounting framework as discussed in Note 2. The adjustment in net position was due to the elimination of $78,818,622 of endowment pledges receivable, a decrease of $14,927,864 due to the restatement of split-interest agreements and external trusts to deferred inflows of resources under GASB Statement No. 81, Irrevocable Split-Interest Agreements, and an increase of $10,970,262 due to the restatement of the FASB pension liability to a pension asset under GASB Statement No. 68, Accounting and Financial Reporting for Pensions.

Table 1 summarizes adjustment to the beginning net position of the Foundation reported in the component units’ Statement of Revenues, Expenses, and Changes in Net Position:

Table 1. Adjustments to Beginning Net Position - Component Units
Description	Direct-Support Organizations
University of Florida Foundation, Inc.	$ (82,776,224)
Total Adjustments to Beginning Net Position	$ (82,776,224)

The University reported a net position which included a deficit in unrestricted funds as shown in Table 2. This deficit can be attributed to the full recognition of long-term liabilities (i.e. net pension liabilities – GASB Statement No. 68 – and OPEB payable – GASB Statement No. 75) in these funds.

Table 2. Deficit Net Position in Individual Funds
Description	Net Position
Unrestricted	$ (253,546,410)
Total	$ (253,546,410)

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-bearingtime 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, 2019, are reported at fair value and shown in Tables 3 through 6.

Table 3. University Investments
		Fair Value Measurements Using
Investments by Fair Value Level	Total	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	$ 1,016,288,135	$ -	$ -	$ 1,016,288,135
State Board of Administration Debt Service Accounts	34,965	34,965	-	-
Total Investments by Fair Value Level	1,016,323,100	$ 34,965	$ -	$ 1,016,288,135
Investments Measured at the Net Asset Value (NAV)
Private Equity Funds	938,480,480
Total University Investments	$ 1,954,803,580

Table 4. 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	$ 938,480,480	$ -	N/A	N/A

This category includes investments in several limited partnership funds that invest in equity securities and debt of private companies.

• Private Equity Funds - This category includes investments in several limited partnership funds that invest in equity securities and debt of private companies.

Table 5. Component Unit Investments
		Fair Value Measurements Using
Investments by Fair Value Level	Total	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)
External Investment Pool:
State Treasury Special Purpose Investment Account	$ 118,026,429	$ -	$ -	$ 118,026,429
Commercial Paper	10,575,550	10,575,550	-	-
US Guaranteed Obligations	14,887,200	13,315,397	1,571,803	-
Federal Agency Obligations	1,890,465	-	1,890,465	-
Domestic Bonds and Notes	38,396,709	13,754,000	24,642,709	-
International Bonds and Notes	745,174	-	745,174	-
Domestic Stock	606,950	586,879	20,071	-
Bond Mutual Funds	178,882,561	131,219,343	47,663,218	-
Equity Mutual Funds	151,018,354	98,655,668	52,362,686	-
Other Investments	32,684,722	18,887,527	13,797,195	-
Private Equity Funds	2,292,015	-	-	2,292,015
Total Investments by Fair Value Level	550,006,129	$ 286,994,364	$ 142,693,321	$ 120,318,444
Investments Measured at the Net Asset Value (NAV)
International Equity	85,128
Real Estate Investments (Directly Owned)	8,423,607
Hedge Funds	5,660,728
Private Equity Funds	2,408,624,662
Total Investments Measured at the NAV	2,422,794,125
Total Investments Measured at Fair Value	2,972,800,254
Other
Commercial Paper	6,545,000
Money Market Funds	5,213,649
Cash Surrender Value of Life Insurance Policy	491,913
Cash Collateral on Deposit with Swap Counterparty	26,410,000
Other Investments	9,795,585
Total Other Investments	48,456,147
Total Component Unit Investments	$ 3,021,256,401

Table 6. 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	$ 85,128	$ -	Illiquid	N/A
Real Estate Investments (Directly Owned)	8,423,607	-	Illiquid	N/A
Hedge Funds	5,660,728	-	Quarterlyy	45 Days
Private Equity Funds	2,408,624,662	271,893,616	Monthly	30 Days
Total Component Unit Investments	$ 2,422,794,125	$ 271,893,616

Component unit investments measured at net asset value are comprised of the following categories:

• International Equity - This category includes an investment in a foreign-based publicly-traded company focused on providing law enforcement with new tools and technology.
• Real Estate Investments - This category includes an in investment in the form of real estate with donor restrictions. The real estate is held at fair value less estimated costs to sell.
• Hedge Funds - This category includes an investment in a hedge fund in which the fund manager is authorized to invest in a broad spectrum of securities that include, but are not limited to, the following: equity and debt securities, currency, commodities, foreign debt, options, futures, and swaps.
• Private Equity Funds - This category includes investments in several limited partnership funds that invest in equity securities and debt of private companies.

A. External Investment Pools

The University and its discretely presented component units (see Note 1) reported investments at fair value totaling $1,016,288,135 and $118,026,429, respectively, at June 30, 2019, 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 17.57, Florida Statutes. The SPIA investment pool carried a credit rating of AA-f by Standard & Poor’s and had an effective duration of 2.71 years and fair value factor of 1.0103 at June 30, 2019. Participants contribute to the SPIA investment 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.

B. State Board of Administration Debt Service Accounts

The University reported investments at fair value totaling $34,965 at June 30, 2019, 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.

C. Other Investments

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 otherthan 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 in debt securities, bonds and notes, and bond mutual funds, and their future maturities at June 30, 2019, are shown in Table 7.

Table 7. Component Units Debt Investment Maturities
		Investment Maturities (in Years)
Types of Investments	Fair Value	Less than 1	1-5	6-10	More than 10
United States Government and Federally-Guaranteed Obligations	$ 14,887,200	$ 13,315,397	$ 79,894	$ 348,556	$ 1,143,353
Federal Agency Obligations	1,890,465	1,890,465	-	-	-
Bonds and Notes	39,141,883	22,666,291	2,344,905	14,130,687	-
Bond Mutual Funds	178,882,561	3,978,522	157,610,003	17,294,036	-
Total	$ 234,802,109	$ 41,850,675	$ 160,034,802	$ 31,773,2790	$ 1,143,353

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, 2019, the University’s component units 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 8.

Table 8. 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	$ 1,890,465	$ 1,111,432	$ 779,033	$ -	$ -
Bonds and Notes	39,141,883	9,509,053	2,944,860	7,853,163	18,834,807
Money Market Funds	5,213,649	5,141,450	-	-	72,199
Bond Mutual Funds	178,882,561	63,213,470	60,966,588	31,024,636	23,677,867
Total	$ 225,128,558	$ 78,975,405	$ 64,690,481	$ 38,877,799	$ 42,584,873

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.

A. Accounts Receviable

Accounts receivable represent amounts for grant and contract reimbursements due from third parties, student tuition and fees, various sales and services provided to students and third parties, and interest accrued on investments and loans receivable. Accounts receivable, net of an allowance for uncollectible accounts, reported as of June 30, 2019, are summarized in Table 9.

Table 9. Accounts Receivable
Description
Grants and Contracts	$ 75,065,207
Student Tuition and Fees	15,209,117
Sales and Services of Auxiliary Enterprises	4,972,629
Interest	3,060,610
Sales and Services of Educational Departments	1,165,289
Total Accounts Receivable, Net	$ 99,472,852

B. Loans and Notes Receivable

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.

C. Allowances for Uncollectible Receivables

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 $11,431,550, which is 31.9% of total related accounts receivable. Loans and notes receivable are reported net of an allowance of $4,683,265, which is 13.4% 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 $100,286,587 of Public Education Capital Outlay, Capital Improvement Fee Trust Fund, and general revenue allocations due from the State to the University for construction of University facilities.

Component units’ due from and due to amounts include receivables and payables between the various component unitcolumns. Some component units are not presented (see Note 1). Accordingly, amounts reported by the University as duefrom and to component units on the Statement of Net Position may not agree with amounts reported by the component unitsas due from and to the University.

Capital assets activity for the fiscal year ended June 30, 2019, is presented in Table 10. The Buildings and Buildings Accumulated Depreciation balances were adjusted by $81,076,066 and $71,349,030, respectively, for a net increase of $9,727,036 related to assets leased to Shands Teaching Hospital and Clinics, Inc. and that were determined to belong to the University.

Table 10. Capital Assets
Description	Beginning Balance	Adjustments	Additions	Reductions	Ending Balance
Nondepreciable Capital Assets:
Land	$ 12,467,035	$ -	$ -	$ -	$ 12,467,035
Construction in Progress	57,113,722	-	145,344,594	81,598,064	120,860,252
Intangibles Work in Progress	31,239,675	-	7,114,177	38,353,852	-
Works of Art and Historical Treasures	4,509,913	-	103,836	31,327	4,582,422
Total Nondepreciable Capital Assets	105,330,345	-	152,562,607	119,983,243	137,909,709
Depreciable Capital Assets:
Buildings	2,850,423,924	81,076,066	81,072,985	489,635	3,012,083,340
Infrastructure and Other Improvements	133,978,878	-	582,219	-	134,561,097
Furniture and Equipment	641,500,542	-	55,191,920	36,851,434	659,841,028
Library Resources	351,964,571	-	9,329,927	1,230,001	360,064,497
Property Under Capital Lease and Leasehold Improvements	23,113,034	-	-	-	23,113,034
Computer Software	24,533,000	-	38,353,853	-	62,886,853
Other Capital Assets	927,545	-	6,406	55,749	878,202
Total Depreciable Capital Assets	4,026,441,494	81,076,066	184,537,310	38,626,819	4,253,428,051
Less Accumulated Depreciation:
Buildings	1,328,106,933	71,349,030	87,493,362	298,122	1,486,651,203
Infrastructure and Other Improvements	82,472,037	-	4,135,363	-	86,607,400
Furniture and Equipment	437,121,761	-	38,915,615	26,796,062	449,241,314
Library Resources	302,745,819	-	11,173,807	290,501	313,629,125
Property Under Capital Lease and Leasehold Improvements	8,642,181	-	1,284,621	-	9,926,802
Computer Software	24,533,000	-	-	-	24,533,000
Other Capital Assets*	621,097	-	103,123	19,855	704,365
Total Accumulated Depreciation	2,184,242,828	-	143,105,891	27,404,540	2,371,293,209
Total Depreciable Capital Assets, Net	1,842,198,666	71,349,030	41,431,419	11,222,279	1,882,134,842
Total Capital Assets, Net	$ 1,947,529,011	$ 9,727,036	$ 193,994,026	$ 131,205,522	$ 2,020,044,551

The Florida Museum of Natural History, which is the official state-sponsored and chartered natural history museum and part of the University, maintains a depository of biological, paleontological, archaeological, and ethnographic materials. The Museum’s collections contain over 40 million specimens and objects, 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 11,000 works of art. In accordance with professional practice among the nation’s art museums, and in compliance with museum accreditation standards, the University has not placed a dollar value on these items.

Certain changes in the University’s proportionate share of the net pension liabilities of the cost-sharing multipleemployer Florida Retirement System and Health Insurance Subsidy defined benefit plans, as well as in the University’s proportionate share of the total other postemployment benefits liability of the Division of State Group Insurance, are reported as deferred outflows and inflows of resources. These include changes in actuarial assumptions, 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 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 and other postemployment benefit plans subsequent to the measurement date for the collective liabilities are reported as deferred outflows of resources. See Note 13 for a discussion of the University’s other postemployment benefits payable and the related deferred outflows and inflows of resources. See Note 14 for a complete discussion of the University’s defined benefit pension plans and the related deferred outflows and inflows of resources. Other deferred outflows consists of the resources tied to the asset retirement obligation recorded by the University under GASB Statement No. 83. See Note 13 for a complete discussion of the University’s asset retirement obligation and the related deferred outflows.

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, 2019, is summarized in Table 11.

Table 11. Unearned Revenue
Description
Grants and Contracts	$ 41,454,649
Auxillary Enterprises	10,611,533
Student Tuition and Fees	6,133,304
Total Unearned Revenue	$ 58,199,486

Long-term liabilities of the University at June 30, 2019, 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 activity for the fiscal year ended June 30, 2019, is presented in Table 12.

Table 12. Long-term Liabilities
Description	Beginning Balance	Additions	Reductions	Ending Balance	Current Portion
Capital Asset-Related Debt:
Capital Improvement Debt Payable	$ 138,115,340	$ 42,476,508	$ 21,091,433	$ 159,500,415	$ 9,547,000
Loans and Notes Payable	5,145,015	-	408,233	4,736,782	417,839
Installment Purchase Agreements Payable	1,612,192	-	1,112,104	500,088	451,788
Capital Leases Payable	2,343,267	-	176,026	2,167,241	187,380
Total Capital Asset-Related Debt	147,215,814	42,476,508	22,787,796	166,904,526	10,604,007
Other Long-term Liabilities:
Compensated Absences Payable	125,229,012	10,452,174	10,845,110	124,836,076	11,376,585
Other Postemployment Benefits Payable	1,069,104,000	207,242,000	232,798,000	1,043,548,000	15,774,000
Net Pension Liability	611,171,279	392,171,297	359,224,323	644,118,253	4,197,839
Other Noncurrent Liabilities	13,968,933	9,482,000	164,518	23,286,415	-
Total Long-term Liabilities	$ 1,966,689,038	$ 661,823,979	$ 625,819,747	$ 2,002,693,270	$ 41,952,431

A. Capital Improvement Debt Payable

Capital improvement debt is issued to construct student housing, parking, and various other University facilities. The outstanding debt for student housing and the parking facilities is secured by a pledged portion of housing rental revenues and parking fees. The outstanding debt for the Clinical Translational Research Building is secured by a pledged portion of indirect cost revenues received by the College of Medicine. The outstanding debt for the renovation and expansion of the student activity center building is secured by a pledged portion of the student and activity fees. Pledged revenues are equal to the remaining debt service requirements to maturity for the capital improvement debt.

On October 25, 2018, the Florida Board of Governors, on behalf of the University, issued $39,070,000 of University of Florida Parking Facility Revenue Bonds, Series 2018A. The bonds are repaid from pledged revenues of transportation and parking fees. $28,790,000 of the proceeds are being used to finance the construction of a parking facility on the main campus of the University of Florida. The remaining $10,280,000 were used to refund all outstanding portions of the University of Florida Parking Facility Revenue Bonds, Series 2007A, maturing in years 2019 through 2027. The new bonds will mature in annual increments starting on August 1, 2019 and ending on August 1, 2038. Interest payments are due semiannually on February 1 and August 1 beginning February 1, 2019.

A summary of the University’s capital improvement debt payable at June 30, 2019, is presented in Table 13.

Table 13. Capital Improvement Debt Payable
		Amount Outstanding
Type and Series	Amount of Original Issue	Principal	Interest	Interest Rates	Maturity Date
Student Housing Auxiliary Debt:
2011A Housing	$ 16,350,000	$ 5,995,000	$ 1,193,944	3.000 to 4.000%	2028
2012A Housing	26,500,000	18,840,000	4,376,181	3.000 to 4.000%	2031
2013A Housing	24,805,000	18,445,000	5,368,594	3.000 to 5.000%	2033
2016A Housing	19,390,000	16,175,000	4,117,825	3.000 to 5.000%	2030
Total Student Housing Debt	87,045,000	59,455,000	15,056,544
Parking Facility Auxiliary Debt:
2018A Parking Facility	39,070,000	39,070,000	16,659,700	4.000 to 5.000%	2038
Total Parking Garage Debt	39,070,000	39,070,000	16,659,700
Other University of Florida Revenue Bonds:
2011 Clinical Translational Research Building	29,838,000	20,199,000	5,538,923	4.433%	2030
2013 Student Activity	41,540,000	33,080,000	12,182,050	4.000 to 5.000%	2033
Total Other University of Florida Revenue Bonds	71,378,000	53,279,000	17,720,973
Plus: Unamortized Premiums	-	8,844,714	-
Less: Unamortized Discounts	-	(24,343)	-
Less: Unamortized Refunding Losses	-	(1,123,956)	-
Total Capital Improvement Debt	$ 197,493,000	$ 159,500,415	$ 49,437,217

Annual requirements to amortize all capital improvement debt outstanding as of June 30, 2019, are presented in Table 14.

Table 14. Capital Improvement Debt Payable - Principal & Interest
Fiscal Year Ending June 30	Principal	Interest	Total
2020	$ 9,547,000	$ 6,492,409	$ 16,039,409
2021	9,992,000	6,045,056	16,037,056
2022	10,459,000	5,574,892	16,033,892
2023	10,960,000	5,081,523	16,041,523
2024	10,587,000	4,577,830	15,164,830
2025-2029	57,927,000	15,636,179	73,563,179
2030-2034	32,592,000	5,024,328	37,616,328
2035-2039	9,740,000	1,005,000	10,745,000
Total Principal & Interest	151,804,000	49,437,217	201,241,217
Plus: Unamortized Premiums	8,844,714	-	8,844,714
Less: Unamortized Discounts	(24,343)	-	(24,343)
Less: Unamortized Refunding Losses	(1,123,956)	-	(1,123,956)
Total	$ 159,500,415	$ 49,437,217	$ 208,937,632

B. Loans and Notes Payable

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 and renovation of the J. Wayne Reitz Union. The principal and interest costs are expected to be met by cost savings of the newer system. The University’s outstanding note is secured with collateral of the energy performance equipment used in the renovation. The note contains a provision that in an event of default, the contract can be terminated and equipment returned and/or declare all payments payable under the contract to the end of the then current budget year of the University, to be immediately due and payable. The note matures on August 31, 2029, and principal and interest payments are made annually. Annual requirements to amortize the note as of June 30, 2019, are presented in Table 15.

Table 15. Loans and Notes - Principal & Interest
Fiscal Year Ending June 30	Principal	Interest	Total
2020	$ 417,839	$ 105,833	$ 523,672
2021	427,671	96,001	523,672
2022	437,734	85,938	523,672
2023	448,034	75,638	523,672
2024	458,576	65,096	523,672
2025-2029	2,459,903	158,455	2,618,358
2030	87,025	253	87,278
Total	$ 4,736,782	$ 587,214	$ 5,323,996

C. Installment Purchase Agreements Payable

The University has entered into several installment purchase agreements for the purchase of equipment with original cost bases totaling $2,636,977. The stated interest rates ranged from 0.00% to 5.62%. Future minimum payments remaining under installment purchase agreements as of June 30, 2019, are presented in Table 16.

Table 16. Installment Purchase Agreements Payable - Principal & Interest
Fiscal Year Ending June 30	Principal	Interest	Total
2020	$ 451,788	$ 3,399	$ 455,187
2021	48,300	-	48,300
Total Minimum Payments	$ 500,088	$ 3,399	$ 503,487

D. Capital Lease Payable

The University 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 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 is presented in Table 17.

Table 17. Capital Leases Payable
Capital Leases	Interest Rate	Original Balance	Outstanding Balance
Garage No. 06 (607 spaces)	6.45%	$ 1,382,470	$ 416,130
Garage No. 10 (800 spaces)	6.45%	2,981,939	1,751,111
Total		$ 4,364,409	$ 2,167,241

Future minimum payments under the capital lease agreements and the present value of the minimum payments as of June 30, 2019, are presented in Table 18.

Table 18. Capital Leases Payable - Principal & Interest
Fiscal Year Ending June 30	Principal	Interest	Total
2020	$ 187,380	$ 139,787	$ 327,167
2021	199,466	127,701	327,167
2022	212,331	114,835	327,166
2023	226,027	101,140	327,167
2024	240,605	86,561	327,166
2025-2029	888,030	247,806	1,135,836
2030-2031	213,402	13,764	227,166
Total	$ 2,167,241	$ 831,594	$ 2,998,835

E. Compensated Absences Payable

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, state noncapital 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, 2019, the estimated liability for compensated absences, which includes the University’s share of theFlorida Retirement System and FICA contributions, totaled $124,836,076. 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.

F. Other Postemployment Benefits Payable

The University follows Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, for certain postemployment healthcare benefits administered by the Florida Department of Management Services, Division of State Group Insurance.

General Information about the OPEB Plan

Plan Description - The Division of State Group Insurance’s Other Postemployment Benefits Plan (OPEB Plan) is a multiple-employer defined benefit health plan administered by the State of Florida. Pursuant to the provisions of Section 112.0801, Florida Statutes, all employees who retire from the University are eligible to participate in the OPEB Plan. Retirees and their eligible dependents shall be offered the same health and hospitalization insurance coverage as is offered to active employees at a premium cost of no more than the premium cost applicable to active employees. A retiree means any officer or employee who retires under a State retirement system or State optional annuity or retirement program or is placed on disability retirement and who begins receiving retirement benefits immediately after retirement from employment. In addition, any officer or employee who retires under the Florida Retirement System Investment Plan is considered a “retiree” if he or she meets the age and service requirements to qualify for normal retirement or has attained the age of 59.5 years and has the years of service required for vesting. The University subsidizes the premium rates paid by retirees by allowing them to participate in the OPEB 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 retiree healthcare costs are generally greater than active employee healthcare costs. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. The OPEB Plan contribution requirements and benefit terms necessary for funding the OPEB Plan each year is on a pay-as-you-go basis as established by the Governor’s recommended budget and the General Appropriations Act. Retirees are required to enroll inthe Federal Medicare (Medicare) program for their primary coverage as soon as they are eligible.

Benefits Provided - The OPEB Plan provides healthcare benefits for retirees and their dependents. The OPEB Plan only provides an implicit subsidy as described above.

Proportionate Share of the Total OPEB Liability

The University’s proportionate share of the total OPEB liability of $1,043,548,000 was measured as of June 30, 2018 and was determined by applying update procedures to the actuarial valuation performed as of July 1, 2017. At June 30, 2019, the University’s proportionate share, determined by its proportion of total benefit payments made, was 9.89%, which remained the same as its proportionate share measured as of June 30, 2018.

Actuarial Assumptions and Other Inputs - OPEB liability was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified, as presentedin Table 19.

Table 19. Actuarial Assumptions - OPEB
Inflation	2.60%
Salary Increases	3.25%	average, including inflation
Discount Rate	3.87%
Healthcare Cost Trend Rates	8.80% and 6.20%	for Preferred Provider Organizations (PPO) and Health Maintenance Organizations (HMO), respectively, for fiscal year 2019, decreasing to an ultimate rate of 3.80% for 2076 and later years
Retirees’ Share of Benefit-Related Costs	100.00%	projected health insurance premiums for retirees

The discount rate was based on the Bond Buyer General Obligation 20-year Municipal Bond Index.

Mortality rates were based on the Generational RP-2000 with Projection Scale BB.

While an experience study has not been completed for the OPEB Plan, the actuarial assumptions that determined the total OPEB liability for the OPEB Plan were based on certain results of the most recent experience study for the FRS Plan.

The following changes have been made since the prior valuation:

• The discount rate as of the measurement date for GASB 75 purposes was changed to 3.87%. The prior GASB 75 report used 3.58%. The current GASB 75 discount rate is based on the 20-year municipal bond rate as of June 28, 2018.

Sensitivity of the University’s Proportionate Share of the Total OPEB Liability to Changes in the Discount Rate - Table 20 presents the University’s proportionate share of the total OPEB liability, as well as what the University’sproportionate share of the total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (2.87%) or 1 percentage point higher (4.87%) than the current rate:

Table 20. Sensitivity to Changes in Discount Rate - OPEB
	1% Decrease 2.87%	Current Discount Rate 3.87%	1% Increase 4.87%
University’s Proportionate Share of the Total OPEB Liability	$ 1,269,228,000	$ 1,043,548,000	$ 867,848,000

Sensitivity of the University’s Proportionate Share of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates - Table 21 presents the University’s proportionate share of the total OPEB liability, as well as what the University’s proportionate share of the total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1 percentage point lower or 1 percentagepoint higher than the current healthcare cost trend rates:

Table 21. Sensitivity to Changes in Healthcare Cost Trend Rates - OPEB
	1% Decrease	Healthcare Cost Trend Rates	1% Increase
University’s Proportionate Share of the Net Pension Liability	$ 844,135,000	$ 1,043,548,000	$ 1,311,194,000

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB - For the fiscal year ended June 30, 2019, the University recognized OPEB expense of $51,272,000. At June 30, 2019, the University reported deferred outflows of resources and deferredinflows of resources related to OPEB as presented in Table 22.

Table 22. Deferred Outflows and Inflows of Resources Related to OPEB
Description	Deferred Outflows of Resources	Deferred Inflows of Resources	Recognition Period
Change of Assumptions	$ -	$ 210,137,000	8.0 years
Changes in Proportion and Differences Between University Benefit Payments and Proportionate Share of Benefit Payments	-	6,401,000	8.0 years
Transactions Subsequent to the Measurement Date	16,164,000	-	1.0 year
Total	$ 16,164,000	$ 216,538,000

Of the total amount reported as deferred outflows of resources related to OPEB, $16,164,000 resulting from transactions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the total OPEB liability and included in OPEB expense in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as presented in Table 23.

Table 23. Recognition of Deferred Inflows related to OPEB
Fiscal Year Ending June 30	Amount
2020	$ (34,018,000)
2021	(34,018,000)
2022	(34,018,000)
2023	(34,018,000)
2024	(34,018,000)
Thereafter	(46,448,000)
Total	$ (216,538,000)

A. Defined Benefit Pension Plans

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 and Health Insurance Subsidy 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 (DROP) 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 Florida Department of Management Services, Division of Retirement, and consists of two costsharing, 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 $107,296,432 for the 2018-19 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 costsharing multiple-employer defined benefit pension plan, with a DROP for eligible employees. The general classes of membership are as follows:

• Regular Class – Members of the FRS who do not qualify for membership in the other classes.
• Senior Management Service Class (SMSC) – Members in senior management level positions.
• Special Risk Class – Members who are employed as law enforcement officers and meet the criteria to qualify for this class.

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 creditable 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 creditable 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 creditable 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.

The 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 24 shows the percentage value for each year of service credit earned.

Table 24. Percentage Value of Service Credit Earned per Year
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%
Senior Management Service Class	2.00%
Special Risk Class
Service on and after October 1, 1974	3.00%

As provided in Section 121.101, Florida Statutes, if the member was initially enrolled in the Plan 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 was 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-ofliving 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.

Contributions - The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2018-19 fiscal year are shown in Table 25. The University’s contributions to the Plan totaled $50,296,368 for the fiscal year ended June 30, 2019.

Table 25. Florida Retirement System Contribution Rates
	Percent of Gross Salary
Class	Employee	Employer (A)
Florida Retirement System, Regular	3.00%	8.26%
Florida Retirement System, Senior Management Service	3.00%	24.06%
Florida Retirement System, Special Risk	3.00%	24.50%
Deferred Retirement Option Program-Applicable to Members from All of the Above Classes	0.00%	14.03%
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 0.06% for administrative costs of the Investment Plan. (B) Contribution Rates are dependent upon retirement class in which reemployed.

Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2019, the University reported a liability of $487,417,535 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2018, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2018. The University’s proportionate share of the net pension liability was based on the University’s 2017-18 fiscal year contributions relative to the total 2017-18 fiscal year contributions of all participating members. At June 30, 2018, the University’s proportionate share was 1.62%, which was an increase of 0.09% from its proportionate share of 1.53% measured as of June 30, 2017.

For the year ended June 30, 2019, the University recognized pension expense of $94,358,933. At June 30, 2019, the University reported deferred outflows of resources and deferred inflows of resources related to pensions as presented in Table 26.

Table 26. 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	$ 41,291,592	$ 1,498,691	6.4 years
Change of Assumptions	159,264,347	-	6.4 years
Net Difference Between Projected and Actual Earnings on Plan Investments	-	37,658,947	5.0 years
Changes in Proportion and Difference Between University Contributions and Proportionate Share of Contributions	26,589,305	4,661,914	6.4 years
University FRS Contributions Subsequent to the Measurement Date	50,296,368	-	1.0 year
Total	$ 277,441,612	$ 43,819,552

The deferred outflows of resources related to pensions totaling $50,296,368, 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, 2020. 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 27.

Table 27. Recognition of Deferred Outflows and Inflows Related to Pensions - FRS
Fiscal Year Ending June 30	Amount
2020	$ 73,143,420
2021	47,829,714
2022	7,588,377
2023	29,913,979
2024	21,095,554
Thereafter	3,754,648
Total	$ 183,325,692

Actuarial Assumptions - The total pension liability in the July 1, 2018 actuarial valuation was determined using the following actuarial assumptions applied to all periods included in the measurement, as presented in Table 28.

Table 28. Actuarial Assumptions - FRS
Inflation	2.60%
Salary Increases	3.25%	average, including inflation
Investment Rate of Return	7.00%	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, 2018, 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 Plan investments was not based on historical returns, but instead was 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 was 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 29.

Table 29. Target Allocation and Expected Rate of Return
Asset Class	Target Allocation	Long-term Expected Rate of Return
Cash	1.00%	2.90%
Fixed Income	18.00%	4.40%
Global Equity	54.00%	7.60%
Real Estate (Property)	11.00%	6.60%
Private Equity	10.00%	10.70%
Strategic Investments	6.00%	6.00%
Total	100.00%

Discount Rate - The discount rate used to measure the total pension liability was 7.00%, which was a decrease of 0.10% from the prior measurement date. 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 longterm expected rate of return.

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 7.00%, 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 (6.00%) or 1 percentage point higher (8.00%) than the current rate.

Table 30. Sensitivity to Changes in Discount Rate - FRS
	1% Decrease 6.00%	Current Discount Rate 7.00%	1% Increase 8.00%
University's Proportionate Share of the Net Pension Liability	$ 889,557,445	$ 487,417,535	$ 153,416,566

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 Stateadministered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of ManagementServices.

Benefits Provided - For the fiscal year ended June 30, 2019, 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 undera 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, 2019, 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 $8,250,927 for the fiscal year ended June 30, 2019.

Pension Liabilities, Pension Expense, Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2019, the University reported a liability of $156,700,718 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 1 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, 2018. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2018. The University’s proportionate share of the net pension liability was based on the University’s 2017-18 fiscal year contributions relative to the total 2017-18 fiscal year contributions of all participating members. At June 30, 2018, the University’s proportionate share was 1.48%, which was an increase of 0.01% from its proportionate share of 1.47% measured as of June 30, 2017.

For the fiscal year ended June 30, 2019, the University recognized pension expense of $12,937,499. In addition, the University reported deferred outflows of resources and deferred inflows of resources related to pensions as presented in Table 31.

Table 31. Deferred Outflows and Inflows Related to Pensions - HIS
Description	Deferred Outflows of Resources	Deferred Outflows of Resources	Recognition Period
Differences Between Expected and Actual Experience	$ 2,399,019	$ 266,229	7.2 years
Change of Assumptions	17,427,056	16,567,710	7.2 years
Net Difference Between Projected and Actual Earnings on Plan Investments	94,588	-	5.0 years
Changes in Proportion and Difference Between University Contributions and Propotionate Share of Contributions	4,260,399	-	7.2 years
University Contributions Subsequent to the Measurement Date	8,250,927	-	1.0 year
Total	$ 32,431,989	$ 16,833,939

The deferred outflows of resources related to pensions totaling $8,250,927, 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, 2020. 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 32.

Table 32. Recognition of Deferred Outflows and Inflows Related to Pensions - HIS
Fiscal Year Ending June 30	Amount
2020	$ 3,433,642
2021	3,425,668
2022	2,469,504
2023	744,791
2024	(1,929,936)
Thereafter	(796,546)
Total	$ 7,347,123

Actuarial Assumptions - The total pension liability in the July 1, 2018, actuarial valuation was determined using the following actuarial assumptions applied to all periods included in the measurement, as presented in Table 33.

Table 33. Actuarial Assumptions - HIS
Inflation	2.60%
Salary Increases	3.25%	average, including inflation
Municipal Bond Rate	3.87%

Mortality rates were based on the Generational RP-2000 with Projection 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 3.87%, which was an increase of 0.29% 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-asyou-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 34 presents the University’s proportionate share of the net pension liability calculated using the discount rate of 3.87%, 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 (2.87%) or 1 percentage point higher (4.87%) than the current rate.

Table 34. Sensitivity to Changes in Discount Rate - HIS
	1% Decrease 2.87%	Current Discount Rate 3.87%	1% Increase 4.87%
University's Proportionate Share of the Net Pension Liability	$ 178,472,935	$ 156,700,718	$ 138,552,312

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.

B. Defined Contribution Pension Plans

1. FRS Investment Plan

The 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’s 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 0.06% of payroll and by forfeited benefits of plan members. Allocations to the Investment Plan member investment accounts during the 2018-19 fiscal year are presented in Table 35.

Table 35. 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 oneyear of service for employer contributions and investmentearnings.

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, 2019, 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 roll over 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 2,461 University participants during the 2018-19 fiscal year. The University’s Investment Plan pension expense totaled $9,250,746 for the fiscal year ended June 30, 2019.

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 the 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, 3.50% 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 7,083 University participants during the 2018-19 fiscal year. The University’s contributions to the Program totaled $47,506,868 and employee contributions totaled $28,785,212 for the 2018-19 fiscal year.

C. Other Retirement Programs

1. U.S. Civil Service Retirement System

Some University employees participate in the U.S. Civil Service Retirement System. Fourteen employees were covered by the U.S. Civil Service Retirement System during the 2018-19 fiscal year. Employer contributions totaled $85,156, and employee contributions totaled $85,156 for the 2018-19 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 includes a social security benefit. No additional persons can become eligible for this supplement.

There were 14 University participants during the 2018-19 fiscal year. Required employer contributions made to the program totaled $247,906. Employees do not contribute to this program.

The University’s construction commitments at June 30, 2019, are presented in Table 36.

Table 36. Construction Project Commitements
Project Title	Total Commitment	Completed to Date	Balance Committed
Data Science and Information Technology Building	$ 135,000,000	$ 30,306	$ 134,969,694
Herbert Wertheim Laboratory for Engineering Excellence	72,316,512	34,957,489	37,359,023
Norman Hall Rehabilitation and College of Education Center Addition	34,107,603	21,845,084	12,262,519
Parking Garage XIV	32,596,599	17,002,087	15,594,512
PK Yonge Middle & High School Expansion	28,000,000	1,227,072	26,772,928
VetMed Plant Energy Services Contract	25,227,148	5,390,923	19,836,225
Institute of Black Culture and Institute of Hispanic-Latino Cultures Facility	9,871,048	4,549,039	5,322,009
Florida Museum of Natural History Special Collections Building	8,000,000	19,868	7,980,132
Museum Road Utility Infrastructure Replacement	6,200,001	110,200	6,089,801
Electrical Substation 2 - Cable and Switchgear Replacement	6,010,163	3,496,574	2,513,589
Subtotal	357,329,074	88,628,642	268,700,432
Projects Under $5,000,000	82,433,754	32,231,610	50,202,144
Total	$ 439,762,828	$ 120,860,252	$ 318,902,576

The University is exposed to various risks of loss related to torts; theft of, 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 2018-19 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 $78 million for named windstorm and flood losses through February 14, 2019, and decreased to $68.5 million starting February 15, 2019. For perils other than named windstorm and flood, losses in excess of $2 million per occurrence were commercially insured up to $225 million; 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 selfinsured 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. 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 Note 1), 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 Program and HEIC are distinct from and entirely independent of the self-insurance programsadministered by the State described in Note 16.

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 oraction.

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 certain 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 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 37 presents those same expenses in functional classification as recommended by NACUBO.

Table 37. Functional Expenses
Functional Classification
Instruction	$ 770,462,514
Public Service	742,136,550
Research	707,179,550
Academic Support	213,650,423
Institutional Support	180,500,202
Scholarships, Fellowships, and Waivers, Net	163,122,183
Depreciation	143,105,891
Auxiliary Enterprises	133,984,814
Operation and Maintenance of Plant	132,511,197
Student Services	46,800,757
Total Operating Expenses	$ 3,233,454,081

The University’s financial statements include 17 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 38, 39, and 40.

Table 38. 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	$ 30,732	$ 4,662	$ 164,330	$ 4,608
Other Current Assets	98,272	90,874	10,948	40,292
Capital Assets, Net	62,134	204,574	-	7
Other Noncurrent Assets	1,912,152	78,915	-	7,922
Total Assets	2,103,290	379,025	175,278	52,829
Liabilities
Due to Component Units/University	40,460	-	57,884	18,464
Other Current Liabilities	5,716	87,726	10,860	21,453
Noncurrent Liabilities	44,906	122,303	-	10,013
Total Liabilities	91,082	210,029	68,744	49,930
Deferred Inflows of Resources
Deferred Amounts Related to Pensions	432	-	-	-
Other Deferred Outflows	19,140	-	-	-
Total Liabilities and Deferred Inflows of Resources	110,654	210,029	68,744	49,930
Net Position
Net Investment in Capital Assets	60,117	106,262	-	7
Restricted-Nonexpendable Endowment	1,361,918	-	-	-
Restricted-Expendable Endowment	552,492	-	-	-
Restricted-Expendable Other	-	8,271	-	-
Unrestricted	18,109	54,463	106,534	2,892
Total Net Position	$ 1,992,636	$ 168,996	$ 106,534	$ 2,899
CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Operating Revenues	$ 107,095	$ 151,450	$ 83,733	$ 971
Operating Expenses	(169,749)	(142,677)	(81,566)	(1,078)
Operating Income (Loss)	(62,654)	8,773	2,167	(107)
Nonoperating Revenues (Expenses) and Other Revenues, Expenses, Gains, or Losses
Investment Income (Loss), Net of Expenses	117,631	5,154	2	1,675
Net Increase (Decrease) in the Fair Value of Investments	1,102	-	11	-
Other Nonoperating Revenues	-	6,366	2,300	-
Other Nonoperating Expenses	-	(7,048)	-	-
Addition to Permanent Endowments	53,823	-	-	-
Change in Net Position	109,902	13,245	4,480	1,568
Net Position, Beginning of Year	1,965,510	155,751	102,054	1,331
Adjustments to beginning Net Position (Note 3)	(82,776)	-	-	-
Net Position, Beginning of Year, as Restated	1,882,734	155,751	102,054	1,331
Net Position, End of Year	$ 1,992,636	$ 168,996	$ 106,534	$ 2,899

Table 38. Direct-Support Organizations (continued) (amounts expressed in thousands)
	Florida Foundation Seed Producers, Inc.	University of Florida Development Corporation	Gator Boosters, Inc.	Citrus Research and Development Foundation, Inc.	Total Direct-Support Organizations
CONDENSED STATEMENT OF NET POSITION
Assets
Due from Component Units/University	$ -	$ -	$ 2,458	$ -	$ 206,790
Other Current Assets	14,828	2,368	3,102	4,043	264,727
Capital Assets, Net	3,356	9,688	1	-	279,760
Other Noncurrent Assets	-	-	492	-	1,999,481
Total Assets	18,184	12,056	6,053	4,043	2,750,758
Liabilities
Due to Component Units/University	-	4,444	4,663	-	125,915
Other Current Liabilities	8,546	286	235	138	134,960
Noncurrent Liabilities	-	-	110	-	177,332
Total Liabilities	8,546	4,730	5,008	138	438,207
Deferred Inflows of Resources
Deferred Amounts Related to Pensions	-	-	-	-	432
Other Deferred Outflows	-	-	-	-	19,140
Total Liabilities and Deferred Inflows of Resources	8,546	4,730	5,008	138	457,779
Net Position
Net Investment in Capital Assets	3,356	5,244	1	-	174,987
Restricted-Nonexpendable Endowment	-	-	492	-	1,362,410
Restricted-Expendable Endowment	-	-	-	-	552,492
Restricted-Expendable Other	-	-	-	3,462	11,733
Unrestricted	6,282	2,082	552	443	191,357
Total Net Position	$ 9,638	$ 12,167	$ 1,045	$ 3,905	$ 2,292,979
CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Operating Revenues	$ 1,601	$ 1,889	$ 40,234	$ 5,879	$ 392,852
Operating Expenses	(1,260)	(2,286)	(3,905)	(10,298)	(412,819)
Operating Income (Loss)	341	(397)	36,329	(4,419)	(19,967)
Nonoperating Revenues (Expenses) and Other Revenues, Expenses, Gains, or Losses
Investment Income (Loss), Net of Expenses	156	-	1,706	124	126,448
Net Increase (Decrease) in the Fair Value of Investments	-	-	-	-	1,113
Other Nonoperating Revenues	40	-	-	4,000	12,706
Other Nonoperating Expenses	-	(4,444)	(38,037)	-	(49,529)
Addition to Permanent Endowments	-	-	5	-	53,828
Change in Net Position	537	(4,841)	3	(295)	124,599
Net Position, Beginning of Year	9,101	12,167	1,042	4,200	2,251,156
Adjustments to beginning Net Position (Note 2)	-	-	-	-	(82,776)
Net Position, Beginning of Year, as Restated	9,101	12,167	1,042	4,200	2,168,380
Net Position, End of Year	$ 9,638	$ 7,326	$ 1,045	$ 3,905	$ 2,292,979

Table 39. Health Science Center Affiliates (amounts expressed in thousands)
	Florida Clinical Practice Association, Inc.	University of Florida Jacksonville Physicians, Inc.	Faculty Associates, Inc.	Florida Veterinary Medicine Faculty Association, Inc.	University of Florida College of Pharmacy Faculty Practice Association, Inc.	Total Health Science Center Affiliates
CONDENSED STATEMENT OF NET POSITION
Assets
Due from Component Units/University	$ 30,642	$ 18,560	$ 1,500	$ 1,372	$ -	$ 52,074
Other Current Assets	129,569	55,856	21,079	4,394	811	211,709
Capital Assets, Net	83,902	26,339	-	-	-	110,241
Other Noncurrent Assets	33,546	-	-	-	-	33,546
Total Assets	277,659	100,755	22,579	5,766	811	407,570
Liabilities
Due to Component Units/University	15,794	927	-	3,357	-	20,078
Other Current Liabilities	10,584	24,037	297	522	705	36,145
Noncurrent Liabilities	91,212	7,116	-	-	-	98,328
Total Liabilities	117,590	32,080	297	3,879	705	154,551
Net Position
Net Investment in Capital Assets	14,754	18,333	-	-	-	33,087
Unrestricted	145,315	50,342	22,282	1,887	106	219,932
Total Net Position	$ 160,069	$ 68,675	$ 22,282	$ 1,887	$ 106	$ 253,019
CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Operating Revenues	$ 692,058	$ 293,362	$ 20,675	$ 15,746	$ 6,746	$ 1,028,587
Operating Expenses	(189,746)	(145,578)	(391)	(722)	(6,406)	(342,843)
Operating Income	502,312	147,784	20,284	15,024	340	685,744
Nonoperating Revenues (Expenses)
Investment Income (Loss), Net of Expenses	842	410	4	-	-	1,256
Net Decrease in the Fair Value of Investments	(3,432)	-	-	-	-	(3,432
Other Nonoperating Expenses	(458,475)	(150,433)	(17,524)	(16,123)	(2,634)	(685,843)
Change in Net Position	593	(2,239)	2,764	(1,099)	(2,294)	(2,275)
Net Position, Beginning of Year	159,476	70,914	19,518	2,986	2,400	255,294
Net Position, End of Year	$ 160,069	$ 68,675	$ 22,282	$ 1,887	$ 106	$ 253,019

Table 40. 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	$ 45,723	$ 7,048	$ -	$ 57,805	$ 110,576
Other Current Assets	450,884	252,127	223,827	1,314	928,152
Capital Assets, Net	1,081,668	249,153	-	-	1,330,821
Other Noncurrent Assets	679,788	40,976	-	-	720,764
Total Assets	2,258,063	549,304	223,827	59,119	3,090,313
Deferred Outflows of Resources
Deferred Amounts Related to Pensions	67,181	4,028	-	-	71,209
Deferred Amounts Related to OPEB	-	1,829	-	-	1,829
Other Deferred Outflows	51,125	176	-	-	51,301
Total Assets and Deferred Outflows of Resources	2,376,369	555,337	223,827	59,119	3,214,652
Liabilities
Due to Component Units/University	10,642	38,812	57,804	-	107,258
Other Current Liabilities	287,711	92,184	8,597	2	388,494
Noncurrent Liabilities	865,915	227,471	23,419	2,645	1,119,450
Total Liabilities	1,164,268	358,467	89,820	2,647	1,615,202
Deferred Inflows of Resources
Deferred Amounts Related to Pensions	23,378	3,331	-	-	26,709
Deferred Amounts Related to OPEB	-	510	-	-	510
Other Deferred Inflows	2,325	3,101	-	-	5,426
Total Liabilities and Deferred Inflows of Resources	1,189,971	365,409	89,820	2,647	1,647,847
Net Position
Net Investment in Capital Assets	263,659	43,600	-	-	307,259
Restricted-Nonexpendable Endowment	276	-	-	-	276
Restricted-Expendable Endowment	4,205	4,793	-	-	8,998
Other Restricted Net Position	-	-	134,007	56,472	190,479
Unrestricted	918,258	141,535	-	-	1,059,793
Total Net Position	$ 1,186,398	$ 189,928	$ 134,007	$ 56,472	$ 1,566,805
CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Operating Revenues	$ 1,600,792	$ 753,681	$ 10,045	$ 722	$ 2,365,240
Operating Expenses	(1,482,863)	(717,352)	(10,950)	(1,322)	(2,212,487)
Operating Income (Loss)	117,929	36,329	(905)	(600)	152,753
Nonoperating Revenues (Expenses)
Investment Income, Net of Expenses	39,919	2,023	13,071	4,346	59,359
Net Decrease in the Fair Value of Investments	6,288	-	-	-	6,288
Other Nonoperating Revenues	17,975	183	-	-	18,158
Other Nonoperating Expenses	(100,810)	(42,093)	-	-	(142,903)
Change in Net Position	81,301	(3,558)	12,166	3,746	93,655
Net Position, Beginning of Year	1,105,097	193,486	121,841	52,726	1,473,150
Net Position, End of Year	$ 1,186,398	$ 189,928	$ 134,007	$ 56,472	$ 1,566,805

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. In accordance with GASB Codification Section 2500.701-3, the University is no longer including activities related to Transportation Fees and Student Traffic Court in the segment note which will affect the comparability of the note to prior years. A summary of the financial activity for these segments is presented in Table 41.

Table 41. SEGMENT INFORMATION
	Transportation and Parking Services	Department of Housing and Residence Education
CONDENSED STATEMENT OF NET POSITION
Assets
Current Assets	$ 19,826,279	$ 11,684,026
Capital Assets, Net	60,524,647	116,275,609
Other Noncurrent Assets	-	376,072
Total Assets	80,350,926	128,335,707
Liabilities
Current Liabilities	4,230,908	8,770,677
Noncurrent Liabilities	42,661,396	52,429,658
Total Liabilities	46,892,304	61,200,335
Net Position
Net Investment in Capital Assets	16,051,223	59,285,951
Restricted	1,785,575	2,175,176
Unrestricted	15,621,824	5,674,245
Total Net Position	$ 33,458,622	$ 67,135,372
CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
Operating Revenues (Expenses):
Operating Revenues	$ 15,838,909	$ 56,544,387
Depreciation Expense	(2,144,666)	(7,332,026)
Other Operating Expense	(6,664,009)	(45,230,046)
Operating Income	7,030,234	3,982,315
Nonoperating Revenues (Expenses):
Investment Income	64,635	-
Interest on Capital Asset-Related Debt	(1,419,651)	(2,555,159)
Other Nonoperating Revenues (Expenses)	(13,725,348)	1,418,959
Net Nonoperating Revenues (Expenses)	(15,080,364)	(1,136,200)
Change in Net Position	(8,050,130)	2,846,115
Net Position, Beginning of Year	41,508,752	64,289,257
Net Position, End of Year	$ 33,458,622	$ 67,135,372
CONDENSED STATEMENT OF CASH FLOWS
Net Cash Provided (Used) by
Operating Activities	$ 8,757,609	$ 10,942,575
Noncapital Financing Activities	(4,784,079)	(9,687,618)
Capital and Related Financing Activities	12,911,562	(59,049)
Investing Activities	(16,885,092)	(10,248,134)
Net Decrease in Cash and Cash Equivalents	-	(9,052,226)
Cash and Cash Equivalents, Beginning of Year	-	9,052,226
Cash and Cash Equivalents, End of Year	$ -	$ -