CRITERION II: Resources


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Management of Financial Resources to Meet our Purposes

The University of Northern Iowa is a fiscally sound and dynamically managed institution. Careful attention to the management of its financial resources positions UNI to meet the educational and service needs of its constituents. Constituents and others can access budget, Controller's Office, and purchasing policies at http://www.uni.edu/pres/policies/uni_services.html.

Internal Control Structure and Budgetary Controls
The University of Northern Iowa continues to meet its responsibility for sound fiscal management. To that purpose, the University has established and maintained a system of internal control. Because financial management is an ongoing responsibility, estimates and judgments are routinely made to assess the expected benefits and related costs of internal control policies and procedures. Internal control accomplishes the following objectives:

1.
Provision of reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition

2.Execution of transactions in accordance with authorization by appropriate University officers

3.Proper recording practices to permit the preparation of financial statements in accordance with generally accepted accounting principles

Review by the Office of Auditor of State of the adequacy of UNI's internal control procedures is an integral part of the annual audit. In addition, the University's Operations Auditor performs periodic reviews of specific internal control procedures.

The University administration also maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Iowa State Board of Regents. Budgetary control is established by both account and function within each individual fund. A position control system is used to manage the staff salary budget. Budgetary control is also exercised over sponsored projects as defined in grant and contractual agreements with external agencies. In addition, capital projects are controlled by budgets approved by the Board of Regents.

The University also maintains an encumbrance accounting system as a significant element of the budgetary control system. At the end of each year, legally encumbered amounts for the general educational fund for goods or services received prior to June 30 are carried to the next fiscal year without reversion of appropriations.

Revenues and Expenditures
A comparison of educational and general revenues for the ten years of this self-study (1989 through 1999) is included in Schedule 2 of the 1999 Annual Financial Report (http://access.uni.edu/comm/cafr/1999/stats.pdf). There has been little change in revenue components in the last decade; composition of the University's revenue has remained almost constant as revenue itself has increased at an annual average rate of 6.8 percent.

Unrestricted educational and general expenditures and mandatory transfers in the preceding decade also have remained relatively constant in terms of the University's operating functions. These data over the last decade are available in Schedule 3 of the 1999 Annual Financial Report.

Auxiliary Enterprise Operations
The University's Auxiliary Enterprise Fund is composed primarily of the Residence System, Maucker Union, Intercollegiate Athletics, the UNI-Dome, the Wellness Recreation Center, and the Gallagher-Bluedorn Performing Arts Center. While the auxiliary enterprises are managed as self-supporting activities, the General Educational Fund provides support to certain auxiliaries where the emphasis is on student service rather than direct reimbursement for all activities. This support is provided to the Maucker Union, Intercollegiate Athletics, the UNI-Dome, the Wellness Recreation Center, and the Gallagher-Bluedorn Performing Arts Center.

The major auxiliaries operate under formally approved budgets which, in the case of auxiliaries funded by bond issues, provide for all mandatory transfers to improvement funds, bond reserve funds, and debt service funds. The University's objective is to maintain plant fund reserves at levels adequate to maintain and improve auxiliary facilities through renovation, alteration, and replacement of equipment.

Debt Administration
Outstanding revenue bonds totaled $78,418,000 at the end of the 1998-1999 fiscal year, including $49,633,000 in academic building revenue bonds, $19,790,000 in residence system bonds, and $8,995,000 in field house bonds. Revenue bonds totaled $44,105,000 outstanding a decade ago, at the end of the 1988-1989 fiscal year. The net increase of $34,313,000 is explained by additional bonding to renovate existing buildings or construct new educational and auxiliary facilities.

Cash Management
It is the responsibility of the Board of Regents and its Banking Committee to set investment policy in accordance with Chapter 12C of the Code of Iowa. The Board delegates management and oversight responsibility at the University to the Vice President of Administration and Finance and Treasurer. The Operations Auditor reviews investment transactions monthly.

By Board policy, the University's funds may be invested in as many as eight different kinds of instruments. The primary goals of the investment policy, in order of priority, are (1) safety of principal, (2) maintenance of necessary liquidity to match expected liabilities, and (3) reasonable return on investment.

The University operates an unrestricted, a restricted, and an endowment portfolio. Professional managers have responsibility for endowment funds and a portion of unrestricted funds. The remaining unrestricted funds and the restricted funds are invested by the University Controller, and investment performance is measured using the total return method prescribed by the Association for Investment Management and Research.

Board of Regents policy requires that the University treasurer adopt a "buy and hold" philosophy. For that reason, it is understood that portfolios may not perform as well as some indices; however, performance of UNI's portfolio is evaluated relative to, and is expected to compare favorably with, indices set by the Board. UNI's investment performance ranks favorably on a weighted basis with the applicable indices.

Risk Management
The State of Iowa self-funds on behalf of the University for losses related to workers' compensation of all University employees, general liability (tort claims), and property (casualty losses) other than that of auxiliary enterprises. For information concerning the University's self-funding and commercial insurance, refer to Note K of the Notes to the Financial Statements of the 1999 Annual Financial Report.

Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the University of Northern Iowa for its Annual Financial Report for the fiscal year ended June 30, 1999. This was the eighth consecutive year that the University has achieved this prestigious award.

Resource Efficiency
The University of Northern Iowa is proud of its efficient management of financial and human resources. Progress in this area is expected to continue with the Modern Executive Management and Information Systems (MEMFIS) Project a campus-wide initiative with the primary objective of replacing the core systems of human resources, payroll, general ledger, purchasing, accounts payable, grants and contracts, projects, and budgeting. Based on the results of a lengthy and comprehensive evaluation process, Oracle web-based applications were selected to replace the University's mainframe-based systems.

The successful implementation of new financial, human resources, and payroll systems will result in the following benefits to the University community:

1.Effective decision making based on better access to information

2.Empowerment of University staff. By providing opportunities for the data to be captured at the place of origin (decentralized processing), this new system will let managers and employees assume more responsibility for their records and empower them to act on their own behalf. The establishment of self-service applications will provide personnel with additional opportunities to manage their data.

3.A solid, state-of-the-art, technological base system incorporating a common-user interface and common-user approach to data management

4.Improved business practices, resulting in increased efficiency and accuracy of information.

The MEMFIS project team has provided the University community numerous opportunities to view a prototype of the project and has also investigated department shadow systems to incorporate these into the new system, as much as possible. The team seeks feedback to be certain that unique needs are addressed and provides timely progress reports and other project information at http://www.uni.edu/vpaf/memfis.

Introduction

Criteria I
Criteria II
Criteria III
Criteria IV
Criteria V
Summary &
Recommendations
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Last Modified: 02/14/01