University receives final audit detailing finances
The Central Michigan University Board of Trustees held a special meeting Oct. 22 to receive its final audit for 2015.
Plante Moran auditor Vicki VanDenBerg delivered the initial report on the university's finances at the board's September meeting, but the university was not able to receive the final audit until its finances reflected a $93 million unfunded pension liability. The audit was finalized today, after Michigan Auditor General determined CMU's share of a pension liability to the Michigan Public School Employees' Retirement System.
At the September Board of Trustees meeting, Vice President of Finance Administration Barrie Wilkes said CMU will make payments of about $10 million per year until 2036. Plante Moran, CMU's external auditing firm, said CMU will owe an additional $40 to $50 million in health care liability by 2018.
"That plan has some legislative requirements about how pensions are funded and as a result, consistent with all defined benefit plans across the country, it is significantly underfunded," VanDenBerg said. "All of the participating employers will ultimately have to pay the difference, which is adjusted every year."
CMU's Finances
The audit summarizes CMU's finances for 2014/15. The report showed the university's operating expenses totaled $451.9 million in 2015, with an operating revenue of $336.1 million. In 2014, the university spent $439.1 million and brought in $316 million in revenue.
Most of the university's revenue comes from tuition and student fees. This totals about 67 percent of the budget, or $225 million. Auxiliary enterprises, like residence halls, dining commons and the university's bookstore accounted for $14 million, or 24 percent of the budget. Other major areas of revenue include federal grants and contracts, (2 percent), departmental activities, (6 percent), state and local grants (1 percent).
Most of CMU's expenses go to instruction--staff salaries and benefits. Thirty-six percent of CMU's expenses, $162 million, goes to compensation to faculty. Auxiliary enterprises make up 20 percent of CMU's expenses at $90 million.
Student services makes up only 4 percent of expenditures, as well as scholarships. Student loans make up less than 1 percent.
