CMU unrestricted net assets increase by more than $3 million

Central Michigan University’s unrestricted net assets increased more than $3 million this year, leaving the grand total at  $279.6 million.

According to documents provided by David Burdette, vice president of Finance and Administrative Services, unrestricted net assets make up the university’s net position, which is a representation of the difference between university total of assets and deferred outflows of resources and the total of liabilities and deferred inflows of resources. Last year, the unrestricted net assets were at about $276 million.

These numbers were presented at Thursday’s Board of Trustees meeting by Plante Moran, a certified public accounting firm that was hired to complete the 2012 independent financial audit of the university beginning on June 30.

There are six categories designated for the use of the funds.

As of June 30, 2012, $74.8 million is designated for use in capital projects, $40.3 million is designated for debt stabilization and insurance reserves and $15.4 million comes from unrealized gains. Additionally, $49 million is designated for contractual commitment, $69.8 million is designated for normal capital balances maintained departmental and auxiliary enterprise activities and $30.3 million of funds are functioning as endowments.

Barrie Wilkes, associate vice president of financial services, said unrestricted net assets are balances from operational activities that have not been restricted by parties external to the university, such as donors to the university or grant agencies. These are funds the university has that are not legally meant for one specific use.

“While (the funds) are not legally restricted, they do have designated uses,” Burdette said. “Through the budget process, it is decided where to use the funds.”

In July, for the first time in school history, CMU dipped into its reserve accounts, using $6.1 million to fund a shortfall in the 2012-13 fiscal year budget.

The total net position is currently $641.1 million, a .96-percent increase from the $635 million in June 2011. The net position comprises the university’s net investment in capital assets, restricted non expendable assets, restricted expendable assets and unrestricted net assets. Of that, $285.1 million comes from investments in capital assets, and $279.7 million is designated as unrestricted funds.

Some of the funds are already being used for projects like the ongoing graduate student housing project and Anspach Hall renovations.

Burdette said the auditor’s report is helpful to the university.

“The university is in a good position,” Burdette said. “When an auditor gives you a clear, unqualified opinion, you can’t ask for anything better.”