Benedictine University and Affiliates

63 Pages·2016·0.49 MB·English

by  Wolf Employee

Benedictine University and Affiliates
Independent Auditor’s Report and Consolidated
Financial Statements
May 31, 2016 and 2015
Benedictine University and Affiliates
May 31, 2016 and 2015

Contents

Independent Auditor’s Report ............................................................................................. 1

Consolidated Financial Statements
Consolidated Statements of Financial Position .................................................................................. 3
Consolidated Statement of Activities – Year Ended May 31, 2016 ................................................... 4
Consolidated Statement of Activities – Year Ended May 31, 2015 ................................................... 5
Consolidated Statements of Cash Flows ............................................................................................ 7
Notes to Consolidated Financial Statements ...................................................................................... 9

Supplementary Information
Consolidating Statement of Financial Position – May 31, 2016 ...................................................... 34
Consolidating Statement of Financial Position – May 31, 2015 ...................................................... 35
Consolidating Statement of Activities – Year Ended May 31, 2016 ................................................ 36
Consolidating Statement of Activities – Year Ended May 31, 2015 ................................................ 37
Consolidating Statement of Cash Flows – Year Ended May 31, 2016............................................. 38
Statements of Financial Position – University Only......................................................................... 40
Statements of Activities – University Only ...................................................................................... 41
Statements of Cash Flows – University Only ................................................................................... 42
Independent Auditor’s Report

Board of Trustees
Benedictine University and Affiliates
Lisle, Illinois

We have audited the accompanying consolidated financial statements of Benedictine University
and Affiliates (a nonprofit organization), which comprise the consolidated statements of financial
position as of May 31, 2016, and 2015, and the related consolidated statements of activities and
cash flows for the years then ended, and the related notes to the consolidated financial statements.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation and maintenance of internal control
relevant to the preparation and fair presentation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on
our audits. We conducted our audits in accordance with auditing standards generally accepted in
the United States of America and the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audits to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Board of Trustees
Benedictine University and Affiliates
Page 2

Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Benedictine University and Affiliates as
of May 31, 2016 and 2015, and the changes in their net assets and their cash flows for the years
then ended in accordance with accounting principles generally accepted in the United States of
America.
Emphasis of Matter
As discussed in Note 18 to the consolidated financial statements, the 2015 consolidated financial
statements have been restated to correct certain misstatements. Our opinion is not modified with
respect to these matters.
Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the 2016 and 2015
consolidated financial statements as a whole. The supplementary information listed in the table
of contents, is presented for purposes of additional analysis and is not a required part of the
consolidated financial statements. Such information is the responsibility of management and was
derived from and relates directly to the underlying accounting and other records used to prepare
the consolidated financial statements. The 2016 and 2015 information has been subjected to the
auditing procedures applied in the audits of the consolidated financial statements and certain
additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the consolidated financial statements or
to the consolidated financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our
opinion, the 2016 and 2015 information is fairly stated in all material respects in relation to the
consolidated financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
October 24, 2016, on our consideration of Benedictine University’s internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing,
and not to provide an opinion on internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering Benedictine University’s internal control over financial reporting and
compliance.

Oakbrook Terrace, Illinois
October 24, 2016
Benedictine University and Affiliates
Consolidated Statements of Financial Position
May 31, 2016 and 2015

Assets
2016 2015
Current Assets
Cash and cash equivalents $ 13,648,631 $ 15,291,318
Cash restricted 327,321 275,366
Receivables
Students, less allowance of $1,368,644
in 2016 and $1,439,636 in 2015 7,939,615 7,649,154
Other 2,782,631 3,544,709
Promises to give 87,705 160,488
Prepaid expenses and other assets 977,701 534,058
Total current assets 25,763,604 27,455,093
Loans receivable from students 2,192,332 2,219,382
Investments 31,339,638 39,030,223
Bond proceeds held in trust - debt service 2,411,084 2,410,941
Bond proceeds held in trust - project 235,992 1,012,380
Bond issuance costs, net of accumulated amortization
of $90,640 in 2016 and $55,554 in 2015 752,603 787,689
Property and equipment, net 120,241,284 115,618,830
Promises to give, less current portion 157,663 323,949
$ 183,094,200 $ 188,858,487

See Notes to Consolidated Financial Statements
Liabilities and Net Assets
2016 2015
Current Liabilities
Deferred revenue $ 6,502,139 $ 5,825,154
Accounts payable and accrued expenses 8,417,919 13,050,341
Current portion of bridge line facility 454,356 -
Current portion of bonds and notes payable 2,390,480 2,414,282
Current portion of capital leases payable 245,690 137,812
Deposits held in custody for others 1 , 4 6 1,794 1,524,968
Total current liabilities 19,472,378 22,952,557
Refundable U.S. Government grants for student loans 1,972,091 1,947,272
Interest rate swap agreements 1,404,109 1,419,523
Deferred lease incentive 121,142 143,857
Deferred rent liability 823,014 721,196
Bridge line facility, less current portion 1,363,068 -
Bonds and notes payable, less current portion 56,567,728 57,960,786
Capital leases payable, less current portion 639,306 131,982
Total liabilities 82,362,836 85,277,173
Net Assets
Unrestricted 83,565,610 85,632,872
Temporarily restricted (2015 as restated, Note 18) 7,560,757 8,460,659
Permanently restricted (2015 as restated, Note 18) 9,604,997 9,487,783
Total net assets 100,731,364 103,581,314
$ 183,094,200 $ 188,858,487

3
Benedictine University and Affiliates
Consolidated Statement of Activities
Year Ended May 31, 2016

Temporarily Permanently
Unrestricted Restricted Restricted Total
Revenue and Other Support
Tuition and fees $ 113,251,107 $ - $ - $ 113,251,107
Less scholarships and grants (44,110,764) - - (44,110,764)
Net tuition and fees 69,140,343 - - 69,140,343
Private gifts and grants 2,565,079 1,312,969 117,214 3,995,262
Government grants and contracts 13,605,303 - - 13,605,303
Investment income (loss)
Net loss on investments (3,392,494) (953,609) - (4,346,103)
Interest and dividend income 1,079,075 66,383 - 1,145,458
Investment expenses (171,190) (44,122) - (215,312)
Other income 1,104,730 - - 1,104,730
Auxiliary enterprises 7,460,024 - - 7,460,024
Net assets released from restrictions 1,281,523 (1,281,523) - -
Total revenue and other support 92,672,393 (899,902) 117,214 91,889,705
Expenses
Compensation
Salaries 39,728,851 - - 39,728,851
Benefits 9,533,507 - - 9,533,507
Total compensation 49,262,358 - - 49,262,358
Utilities 2,966,350 - - 2,966,350
Depreciation and amortization 5,231,268 - - 5,231,268
Interest 2,087,037 - - 2,087,037
Bad debts 733,547 - - 733,547
Supplies and services 34,390,540 - - 34,390,540
Total expenses 94,671,100 - - 94,671,100
Change in Net Assets Before Other Changes (1,998,707) (899,902) 117,214 (2,781,395)
Other Changes in Net Assets
Change in fair value of interest rate swap
agreements 15,414 - - 15,414
Loss on disposition of property
and equipment (83,969) - - (83,969)
Change in Net Assets (2,067,262) (899,902) 117,214 (2,849,950)

Net Assets, Beginning of Year, as Restated 85,632,872 8,460,659 9,487,783 103,581,314
Net Assets, End of Year $ 83,565,610 $ 7,560,757 $ 9,604,997 $ 100,731,364
See Notes to Consolidated Financial Statements 4
Benedictine University and Affiliates
Consolidated Statement of Activities
Year Ended May 31, 2015

Temporarily Permanently
Restricted Restricted
(Restated (Restated
Unrestricted Note 18) Note 18) Total
Revenue and Other Support
Tuition and fees $ 113,307,004 $ - $ - $ 113,307,004
Less scholarships and grants (45,158,918) - - (45,158,918)
Net tuition and fees 68,148,086 - - 68,148,086
Private gifts and grants 1,382,082 551,267 113,696 2,047,045
Government grants and contracts 15,863,869 - - 15,863,869
Investment income
Net gain on investments 201,648 1,192,125 - 1,393,773
Interest and dividend income 601,841 280,356 - 882,197
Investment expenses (142,514) (110,957) - (253,471)
Other income 1,269,776 - - 1,269,776
Auxiliary enterprises 7,487,117 - - 7,487,117
Net assets released from restrictions 11,554,279 (11,554,279) - -
Total revenue and other support 106,366,184 (9,641,488) 113,696 96,838,392
Expenses
Compensation
Salaries 41,441,742 - - 41,441,742
Benefits 10,185,700 - - 10,185,700
Total compensation 51,627,442 - - 51,627,442
Utilities 2,849,427 - - 2,849,427
Depreciation and amortization 4,678,362 - - 4,678,362
Interest 1,712,937 - - 1,712,937
Bad debts 794,525 - - 794,525
Supplies and services 32,292,022 - - 32,292,022
Total expenses 93,954,715 - - 93,954,715
Change in Net Assets Before Other Changes 12,411,469 (9,641,488) 113,696 2,883,677
Other Changes in Net Assets
Change in fair value of interest rate swap
agreements (48,484) - - (48,484)
Change in Net Assets 12,362,985 (9,641,488) 113,696 2,835,193

See Notes to Consolidated Financial Statements 5
Benedictine University and Affiliates
Consolidated Statement of Activities (Continued)
Year Ended May 31, 2015

Temporarily Permanently
Restricted Restricted
(Restated (Restated
Unrestricted Note 18) Note 18) Total
Net Assets, Beginning of Year, as
Previously Reported $ 73,269,887 $ 12,819,030 $ 14,657,204 $ 100,746,121
Restatement (see Note 18) - 5,283,117 (5,283,117) -
Net Assets, Beginning of Year, as Restated 73,269,887 18,102,147 9,374,087 100,746,121
Net Assets, End of Year, as Restated $ 85,632,872 $ 8,460,659 $ 9,487,783 $ 103,581,314

See Notes to Consolidated Financial Statements 6
Benedictine University and Affiliates
Consolidated Statements of Cash Flows
Years Ended May 31, 2016 and 2015

2015
(Restated
2016 Note 18)
Operating Activities
Increase (decrease) in net assets $ (2,849,950) $ 2,835,193
Items not requiring (providing) cash
Depreciation and amortization 5,231,268 4,678,362
Net loss (gain) on investments 4,346,103 (1,393,773)
(Gain) loss on disposition of property and equipment 681,315 (324)
Contributions restricted for long-term investment (2,840,019) (318,867)
Change in fair value of interest rate swap agreements (15,414) 48,484
Changes in
Receivables, net and promises to give 710,686 (1,303,177)
Prepaid expenses and other assets (443,643) (181,702)
Deferred revenue 676,985 514,677
Accounts payable and accrued expenses 155,157 (1,376,225)
Deferred lease incentive (22,715) (26,920)
Deferred rent liability 101,818 (72,843)
Deposits held in custody for others (63,174) 97,458
Net cash provided by operating activities 5,668,417 3,500,343
Investing Activities
Purchases of investments (13,315,780) (15,534,188)
Sales of investments 16,680,350 22,201,294
Purchases of property and equipment (14,502,008) (27,601,637)
Bond proceeds held in trust 776,245 18,694,911
Proceeds from sale of property and equipment 46,032 17,546
Principal collected on student loans 395,623 465,377
Student loans disbursed (368,573) (303,000)
Net cash used in investing activities (10,288,111) (2,059,697)
Financing Activities
Proceeds from contributions restricted for
Investment in endowment 132,995 113,696
Investment in capital campaign 2,707,024 205,171
Principal payment on capital leases (216,353) (262,137)
Advanced from bridge line facility 2,271,780 -
Payments on bridge line facility (454,356) -
Principal payments on bonds and notes payable (1,416,859) (1,179,601)
U.S. Government grants for student loans 24,819 11,963
Annuity payments (20,088) (21,044)
Net cash provided by (used in)
financing activities 3,028,962 (1,131,952)

See Notes to Consolidated Financial Statements 7