Report to the Legislature : financial audit for the fiscal year ended June 30 ...

78 Pages·2002·4.2 MB·English

by  Montana. Legislature. Legislative Audit Division

s
378.106
L72MSU
2005
Legislative Audit Division
State ofMontana
Report to the Legislature
December2005 Financial Audit
For the Fiscal Year Ended June 30, 2005
Montana
State University
A Component Unit ofthe State ofMontana
We performed a financial audit ofMontana State University's consolidated
financial statements forthe fiscal year ended June30, 2005. These
financial statements present the financial position, the results ofoperations,
and the cash flows, on a consolidated basis, ofall four campuses affiliated
withMontana State University: Montana State University-Bozeman;
Montana State University-Billings; Montana State University-Northern
(located in Havre); and Montana State University College ofTechnology-
GreatFalls.
The statements include component unit financial information as required
under GASB 39. This report contains an unqualified opinion on the
University's financial statements and accompanying notes for the fiscal
year ended June30, 2005, and the comparative information forthe fiscal
year ended June 30, 2004. The opinion means the reader may rely on the
financial statement information presented. Supplemental Information on
pages A-50 through A-64 is presented for additional analysis.
This audit is performed to attest to the fairness ofthe consolidated
financial statements ofMontana State University. Audit issues, ifany,
identified during this audit have been discussed with university
management and, ifappropriate, will be reported in ourfinancial-related
audit ofthe Universityfor the two fiscal years ended June 30, 2007.
STATE DOCUMENTS COLLECTION
Direct comments/inquiries to:
Legislative Audit Division pre 2 9 Z005
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FINANCIAL AUDITS
Financial audits are conductedbythe Legislative AuditDivisionto determine ifthe financial
statements included inthis report arepresented fairly andthe agency has complied with laws and
regulations having a direct andmaterial effect onthe financial statements. Inperforming the
audit work, the audit staffuses standards set forth bythe AmericanInstitute ofCertified Public
Accountants and the United States Government Accountability Office. Financial audit staff
members hold degrees withan emphasis inaccounting. Most staffmembers hold Certified Public
Accountant (CPA) certificates.
OMB
Government Auditing Standards, the Single Audit Act Amendments of1996 and Circular
A-133 require the auditorto issue certain financial, internal control, and compliance reports. This
individual agency audit report is not intendedto comply with theserequirements and is therefore
not intended fordistributionto federal grantor agencies. The Legislative Audit Division issues a
statewidebiennial Single Audit Report which complies withtheabove reporting requirements.
The SingleAudit Report forthetwo fiscal years ended June 30, 2005, will be issuedby March
31, 2006. The Single AuditReport forthetwo fiscal years endedJune 30, 2003, was issued on
March23, 2004. Copies ofthe SingleAudit Report canbe obtainedbycontacting:
SingleAudit Coordinator Legislative Audit Division
Office ofBudget and ProgramPlanning Room 160, State Capitol
State Capitol PO Box 201705
MT MT
Helena 59620 Helena 59620-1705
Phone [phone]
MEMBERS OF THE LEGISLATIVE AUDIT COMMITTEE
SenatorJoe Balyeat, Vice Chair Representative Dee Brown
SenatorJohnBrueggeman RepresentativeHal Jacobson
SenatorJimElliott Representative ChristineKaufmann
SenatorDanHarrington Representative Scott Mendenhall
Senator Lynda Moss RepresentativeJohnMusgrove, Chair
Senator Corey Stapleton RepresentativeJannaTaylor
LEGISLATIVE AUDIT DIVISION
Scott A. Seacat, Legislative Auditor Deputy Legislative Auditors:
JohnW. Northey, Legal Counsel JimPellegrini, Performance Audit
&
Tori Hunthausen, IS Audit Operations
James Gillett, Financial-Compliance Audit
December 2005
The Legislative Audit Committee
ofthe Montana State Legislature:
This is our financial auditreport onMontana State University's (university) consolidated financial
.
statements forthe fiscal year endedJune 30, 2005. The statements include comparative information for
the fiscal year ended June 30, 2004. The universityrequested this audit to provide timely audited
financial statements to interestedparties. The objective ofouraudit was to determine ifthe university's
financial statements present fairly its financial position, changes in financial position, and its cash flows
as of, and forthe fiscal year ended, June 30, 2005. This objective included determiningtheuniversity's
compliancewith laws andregulations having a direct and material impact onthe financial statements.
Our opinion, as it relates to the financial statements at and forthe fiscal yearendedJune 30, 2004, is
based onthe audit weperformed inthe fall of2004.
Montana State Universityconsists ofcampuses located in Bozeman, Billings, Havre, and Great Falls.
All campuses are accredited bythe Commissionon Colleges oftheNorthwest AssociationofSchools
and Colleges. The Montana State University campuses provide a diversity ofundergraduate and
graduate academic andtwo-yearvocational/technical programs to students.
Montana State University-Bozeman was founded in February 1893 as the Agricultural College ofthe
State ofMontana. It is a land-grant institution, authorizedbythe Morrill Act of1862, andreceives part
ofits support from land-grant income. The campus offers four-yearundergraduateprograms alongwith
masters and doctoral graduateprograms. It includes the Colleges ofAgriculture, Arts andArchitecture,
Business, Education, Health and Human Development, Engineering, Letters and Science, Nursing, and
Graduate Studies. The Bozeman campus also includes the Extension Service, theAgricultural
Experiment Station, andthe Fire Services Training School, which have facilities located in or near
cities ortowns throughout Montana.
Montana State University-Billings consists offive colleges: the College ofArts and Sciences, the
College ofBusiness, the College ofEducation and Human Services, the College ofTechnology, and the
College ofProfessional Studies and Lifelong Learning. MSU-Billings offers a full complement ofone-
year andtwo-year certificateprograms, associate degrees, andbachelor and masterdegrees, as well as
pre-professional academic offerings in a number offields.
Room 160, StateCapitol BuildingPO Box201705 Helena, MT 59620-1705
Phone[phone] FAX [phone] [email protected]
.
Montana State University-Northern is a regional, multi-purpose educational center, serving students
who seekboth a technical and liberal arts education. It offers courses at the campus inHavre and at
A
facilities in Great Falls. This campus offers associate, bachelor, and master degrees. master's degree
program is offered in education, with options incounseling and development, elementary education,
vocational education, and general science.
Montana State UniversityCollege ofTechnology-Great Falls offers instruction leadingto certificates in
one-yearprograms and associate ofapplied science degrees intwo-yearprograms in vocational-
technical trades and industry. Programs includepractical nursing, office/secretarial, interior design
technology, computer and information sciences, various health-related programs, auto body repair and
refinishing, dental hygiene, and business management/entrepreneurship.
A
list ofAppointed and Administrative Officials having oversight responsibilities withrespect to
Montana StateUniversity canbe found beginning onpage i.
Beginning onpage A-l, you will findthe Independent Auditor's Report followedby the financial
We
statements and accompanying notes. issued anunqualified opinion on theuniversity's consolidated
financial statements, whichmeans the reader can rely onthe presented information.
This report does not contain anyrecommendations to the university. Any issues resulting fromthis
financial audit have been discussed withuniversity management. The university's responseto this
report is onpage B-l
We thankPresident Gamble and his stafffortheircooperation andassistance duringthe audit.
Respectfully submitted,
A
eacat
Legislative Auditor
Appointed and Administrative Officials
Board ofRegents ofHigher John A. Mercer, Chair
Education
Mike Foster, ViceChair
Kala French, Student Regent
StephenM. Barrett, Regent
LynnMorrison-Hamilton, Regent
Mark Semmens, Regent
LilaTaylor, Regent
Brian Schweitzer, Governor*
LindaMcCulloch, Superintendent ofPublic Instruction*
* Ex officio members ofthe Board ofRegents
Office ofthe Commissioner Sheila M. Stearns CommissionerofHigherEducation*
ofHigher Education
RodgerBarber Deputy Commissioner forAcademic and
Student Affairs
MickRobinson Associate Commissioner forFiscal Affairs
PamJoehler DirectorofBudget and Accounting
Cathy Swift ChiefLegal Counsel
Montana State University- Geoffrey Gamble President
All Campuses
RolfGroseth Vice President ofIntercampus Affairs
Virginia Key DirectorofInternal Audit
Montana State University- David Dooley Provost and Vice President forAcademic
Bozeman Affairs
Craig Roloff Vice President for Administration and Finance
Thomas McCoy VicePresident forResearch and Creative
Activities
Leslie Schmidt Assistant Vice President forResearch and
Creative Activities
AllenYarnell Vice President ofStudent Affairs
Tom Gibson Treasurer
Leslie Taylor Legal Counsel
Laura Humberger Controller
Kathy Attebury DirectorofUniversityBudgets
Page
i
Appointed and Administrative Officials
Montana State University- Ronald P. Sexton Chancellor
Billings
George White InterimProvost and Academic Vice Chancellor
Curt Kochner Vice Chancellor for Student Affairs
Terrie Iverson Administrative Vice Chancellor
LeAnn Anderson Director ofFinancial Services
JimNielsen Director ofBusiness Services
TrudyCollins Budget Officerand Internal Audit
Montana State University- Alex Capdeville Chancellor
Northern
Cheri Jimeno InterimProvost and SeniorVice Chancellor
ChuckJensen Vice Chancellor forFinance &
Administration/Student Affairs
Carrie Molitor Controller
Montana State University Mary Sheehy Moe Dean
College ofTechnology-
Vernon Pedersen Associate Dean forAcademic and Student Affairs
Great Falls
Mary Ellen Baukol Assistant Dean forBusiness and Finance
Ed Binkley Controller
Montana Agricultural Jeffrey Jacobsen Director
Experiment Stations Connie Shelhamer Budget & Fiscal Director
Montana Extension Service Douglas Steele Vice Provost and ExtensionDirector
Sandra Rahn-Gibson Budget and Fiscal Director
For furtherinformation onthe Montana State University
(all campuses) contact:
Virginia Key, Internal Audit
Suite 7 HamiltonHall
MT
Bozeman, 59717
[phone]
key(a)montana.edu
Members ofthe audit staffinvolved in this audit were Pearl Allen,
Danielle Gamradt, Paul O'Loughlin, Sonia Powell, Vickie Rauser,
JeffTamblyn, Lena Tamcke, and AmberThorvilson.
Page
ii
LEGISLATIVE AUDIT DIVISION
m\
Scott A. Seacat, Legislative Auditor *v\ Deputy LegislativeAuditors:
JohnW. Northey, Legal Counsel OhSG^SKI ^mPellegrini, PerformanceAudit
&
Tori Hunthausen, IS Audit Operations
James Gillett, Financial-Compliance Audit
INDEPENDENT AUDITOR'S REPORT
The Legislative Audit Committee
ofthe Montana State Legislature:
We
have audited the accompanying Consolidated Statements ofNet Assets ofMontana State
University, a component unit ofthe state ofMontana, as ofJune 30, 2005, and 2004, andtherelated
Consolidated Statements ofRevenues, Expenses and Changes inNet Assets and Consolidated
Statements ofCashFlows forthe fiscal years then ended andtheUniversity Component Units-
Combined Statements ofFinancial Position as ofJune 30, 2005, and 2004, and therelated University
Component Units-Combined Statement ofActivities forthe fiscal years then ended. The information
contained inthese financial statements is the responsibility ofthe university's management. Our
responsibility is to express opinions onthese financial statements based on our audit. We did not audit
the financial statements ofthe university's aggregate discretelypresented component units. Those
statements include theMontana State University Foundation, theMuseum ofthe Rockies
Incorporated, the Montana State University-Billings Foundation, and the Montana State University-
Northern Foundation, whichrepresent 98.36 percent and 94.97 percent ofthe assets and revenues,
respectively, as ofand forthe year fiscal ending June 30, 2005, and 98.15 percent and 95.00 percent of
the assets and revenues, respectively, as ofand forthe fiscal year endingJune 30, 2004, ofthe total
aggregate discretelypresented component units. The componentunits identified above were audited by
otherauditors whosereports thereon have been furnishedto us, and ouropinion, insofaras it relates to
the amounts included forthose component units are based onthereports ofthe other auditors.
We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards requirethat weplanandperformthe audit to obtain reasonable assurance about
whetherthe financial statements are free ofmaterial misstatement. An audit includes examining, ona test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accountingprinciples used and significant estimates made bymanagement, as well as
We
evaluating the overall financial statement presentation. believe that our audit and the reports ofother
auditors provide a reasonable basis forour opinion.
In ouropinion, based on our audit andthereports ofotherauditors, the financial statements referred to
abovepresent fairly, in all material respects, the respective financial position ofMontana State University
Page A-l
Room 160,StateCapitol BuildingPO Box201705 Helena, MT 59620-1705
Phone[phone] FAX[phone] [email protected]
and the aggregate discreetlypresented component units as ofJune 30, 2005, and 2004, and therespective
changes in financial position and cash flows, where applicable, forthe years then ended, in conformity
with accounting principles generally acceptedinthe United States ofAmerica.
The Management's Discussion and Analysis onpages A-3 through A-13 is not arequiredpart ofthebasic
financial statements but is supplementary informationrequired by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted principally ofinquiries of
management regarding themethods ofmeasurement and presentation ofthe required supplementary
information. However, we did not auditthe information and express no opiniononit.
The Supplemental Information onpages A-50 through A- 64 is presented forpurposes ofadditional
analysis and is not a required part ofthebasic financial statements. Such informationhas not been
subjected to the auditingprocedures applied inthe audit ofthe financial statements and, accordingly, we
express no opinionon it
Respectfully submitte
James Gillett, CPA
Deputy Legislative Auditor
November9, 2005
Page A-2
Room 160, StateCapitol BuildingPO Box201705 Helena, MT 59620-1705
Phone[phone] FAX [phone] E-Mail [email protected]
Montana State University's
Management's Discussion and Analysis,
Financial Statements, Notes, and Supplemental Information