Unrestricted revenue is accounted for in the current unrestricted fund. Restricted gifts, grants, endowment
income and other restricted resources are accounted for in the current restricted fund, loan funds, endowment
and similar funds and plant funds. Revenue and expenses are reported in the current restricted fund when financial
resources are used for the current operating purposes for which they have been provided. Transactions related
to the various student loan programs operated by the educational institutions are accounted for in loan funds.
Resources dedicated to the acquisition and investment in property, plant and equipment are accounted for in the
plant funds. To the extent current funds are used to finance plant assets, the amounts so provided are accounted
for as (1) expenses, in the case of normal replacement of movable equipment and library books; (2) mandatory
transfers, in the case of required provisions for debt repayment and interest, and equipment renewals and
replacements; and (3) transfers of a nonmandatory nature in all other cases.
General endowment funds are subject to the restrictions of gift instruments requiring the principal be invested
in perpetuity and the income only be utilized. Term endowment funds are similar to general endowment funds
except, upon the passage of a stated period of time or the occurrence of a particular event, all or part of the
principal may be expended. Quasi-endowment funds have been established for the same purposes as general
endowment funds, except any portion of quasi-endowment funds may be expended. The balances of the fund groups
which comprise the endowment and similar funds are general endowment $22,720,000, term endowments $53,000,
and quasi-endowments $5,170,000.
Investments:
Investments of the higher education institutions are stated at cost, adjusted for amortization of premiums
and accretion of discounts, plus accrued income.
Student Revenues:
Student tuition and fees are fully recognized as revenues in the fiscal year in which the related courses or
activities are principally conducted. Student tuition and fees applicable to future courses and activities and collected
as of the end of the fiscal year are recorded as deferred revenue.
Accounts and Notes Receivable:
An allowance for doubtful receivables is provided for estimated losses expected to be incurred in collection.
The estimated losses are based on historical collection experience and a review of the status of existing receivables.
Inventories:
Inventories are stated at the lower of cost, using the first-in, first-out method, or market.
Plant-
Property, plant and equipment are stated principally at cost at date of acquisition or fair value at date of
donation in the case of gifts. Consistent with generally accepted accounting principles for colleges and universities,
depreciation is not provided for the cost of plant assets.
Operating Transfers from State's General Fund:
A substantial portion of the higher education fund's current unrestricted expenses, including current payments
for retirement costs and fringe benefits, are funded through appropriations from the general fund at the time
the expenses are encumbered or paid. The current year retirement expense exceeded the funding by approximately
$13,412,000; this excess increased the liability for retirement costs recorded in the higher education fund. Accrued
retirement costs are expected to be funded principally through future State appropriations.
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