S.05-96
SIMON FRASER UNIVERSITY
Senate Committee on University Priorities
?
Memorandum
TO: Senate
RE: Financial Statements for the
Year Ended March 31, 2005
(SCUP 05-052)
FROM: ?
Bill Krane
Acting Chair, SCUP
Acting Vice President,
Academic
DATE: ?
July 28, 2005
For Information:
Please find attached a copy of Financial Statements for the year ended March 31,
2005. The statements were reviewed by the Senate Committee on University Priorities
(SCUP) at its July 27, 2005 meeting. This document is forwarded to Senate for
information.
end.
c. P. Hibbitts
S. Dench
NOTE
IF YOU DO NOT WISH TO KEEP A COPY OF THE ANNUAL FINANCIAL STATEMENT,
?
PLEASE RETURN IT TO BOBBIE GRANT, STUDENT SERVICES
. .
. .
SIMON FRASER UNIVERSITY
FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31,2005
. .
. .
?
SIMON FRASER UNIVERSITY
FINANCIAL STATEMENTS
MARCH 31, 2005
TABLE OF CONTENTS
Page
1.
Statement of Management Responsibility
?
1
2.
Report of the Vice-President Finance & Administration
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2
3.
Report of the Auditor
?
6
.
?
4. Audited Statements
-
Statement of Financial Position
?
7
-
Statement of Operations and Changes in Operating Net Assets
?
8
-
Statement of Changes in Net Assets
?
9
-
Statement of Cash Flows ?
10
5. Notes to the Financial Statements ?
11
0
STATEMENT OF MANAGEMENT RESPONSIBILITY
?
0 ?
0
The University is responsible for the preparation of the financial statements and has
prepared them in accordance with Canadian generally accepted accounting principles
for not-for profit organizations. The financial statements present fairly the financial
position of the University as at March 31, 2005 and the results of its operations for the
year then ended.
In fulfilling its responsibilities and recognizing the limits inherent in all systems, the
University has developed and maintains a system of internal control designed to
provide reasonable assurance that university assets are safeguarded from loss and that
the accounting records are a reliable basis for the preparation of financial statements.
The Board of Governors carries out its responsibility for review of the financial
statements principally through its Audit Committee. The majority of the members of the
Audit Committee are not officers or employees of the University. The Audit Committee
meets with Management and the external auditors to discuss the results of audit
examinations and financial reporting matters. The external auditors have full access to
the Audit Committee, with and without the presence of Management.
The financial statements for the year ended March 31, 2005 have been reported on by
the Auditor General of the Province of British Columbia. The Auditor's Report outlines
the scope of his examination and provides his opinion on the fairness of presentation of
the information in the financial statements.
4ic '
haelZ
tevensoin
?
Pat Hibbitts
President
?
Vice President
Finance & Administration
..
Page 1
d.
C.
Related Entities that are not consolidated
REPORT OF THE VICE-PRESIDENT FINANCE AND ADMINISTRATION
TRIUMF
. .
Simon Fraser University is a member along with the University of Alberta, the University of British
The University prepares its annual financial statements according to generally accepted accounting
Columbia, the University of Victoria and Carleton University in a joint venture called the Tn
principles for not-for-profit organizations. The operations for the entire entity have been combined
Universities Meson Facility (TRIUMF) located on the UBC campus. TRIUMF is Canada's National
for reporting purposes. However, we continue to manage internally on a fund basis and I am pleased
Laboratory for research in Particle Physics.
?
TRIUMF is not incorporated and each University
to provide this financial information for the operating fund and additional information on the other
appoints three members to a Management Board.
?
The facility and its operations are funded by
--------
funds in the following pages.
federal government grants and the University makes no direct financial contribution. The land and
------ ?
- -
-
buildings are owned by UBC.
Original ?
Restated
?
Actual
?
Actual
Operating fund (000's)
?
Budget
?
Budget ?
2004/05
?
2003104
TRIUMF
•
2004105 ?
2004105
- ?
- ?
.-
Revenue
2005 ?
i
?
2004
Government Grants
?
$
158,616 ?
$
163,972 ?
$ ?
166,893 ?
$ ?
167,416
(000) ?
(000)
Student fees ?
102,650
?
109,412 ?
117,247 ?
96,388
Financial Position
Investment income
?
5,674 ?
5,674
?
6,081 ?
5,323
Total Assets
?
lO7
_.1
?
$5,913
Other income
?
3,998
?
4,839 ?
8,000
?
6,940
Total Liabilities
?
4,619 ?
2,243
Total Revenue ?
270,938 ?
283.897
?
298,221 ?
276,067
Fund Balances - restricted
?
3,047
?
2,701
- other
? (595) ?
969
$7,071
Results of Operation
Expenses
Salaries & benefits
?
180,312 ?
212,276 ?
203,131
?
193,140
Revenue ?
53,628 ?
53,488
Expenses ?
54,846
?
52,359
• •
Library acquisitions ?
7,806
?
8,182
?
8,166 ?
7,323
Student financial assistance
?
13,984 ?
15,618 ?
16,975 ?
11,805
Excess (deficiency) of Revenue
Utilities and janitorials
?
5,795
?
5,839 ?
5,344
?
5,495
over Expenses
?
$L2.18
?
$
1 .129
Other non-salary ?
56,374
?
41,982
?
55,578 ?
47,254
WCUMBS
Total Expenses
?
270,938 ?
283,897 ?
288,194
?
265,017
The University is one of five University members of the Western Canadian Universities Marine
The
Biological
Society
Society
is a
(WCUMBS),
not-for-profit
which
organization
operates
incorporated
a research station
under
at Bamfield,
the Society
British
Act
Columbia.
of British
Change in Fund Balance
$
?
10,027
?
$ ?
11,050
Columbia. The University's operating grant to the Society was $252,000 (2004 - $190,000) and
is recorded as an expenditure by the University. There is no expectation of monetary gain to the
-- - ---------
?
-
University from this venture.
The original budget of
$270,938 was approved
by
the Board
of
Governors
in
March 2004 for the fiscal
year
2004/05.
The restated government grant budget includes the Federal grant of
$5,300,000
for the
Indirect costs of research. Other restated amounts are due to additional sources of revenues not known
SFU COMMUNITY CORPORATION
at the time of the budget and expense categories net of recoveries in the original budget but shown in the
proper revenue and expense catetgories for accounting purposes in the restated column.
The University owns all of the outstanding shares of SFU Community Corporation. ?
SFU
Community Corporation has no business operations and its sole purpose is to act as the trustee of
Although the budget only reflects the Operating fund, the actual revenue and expenses include activities
SFU Community Trust as described in note 2c.
.
contained in the special projects fund, internal research and capital equipment fund. Comparative
figures have been restated to conform with the current year's presentation.
SF UNI VENTURES CORPORATION
The University owns 100% of the shares of SF Univentures Corporation (SFUV), which was
established to promote technology transfer to the private sector. The consolidated assets of SFUV
to be
?
included in these financial
are not considered
?
material and are not
?
statements.
.
16.
a.
Page 21
?
Page 2
Operating Fund ?
d. ?
The valuation is based on the 1983 Group Annuity Mortality Table using an investment rate
Government grants from the Province of British Columbia for 2004/05 were $800,000 lower
?
of return of 6.75% and an inflation rate of 2.5%.
$500,000
generated
of
than
Tuition
increase
Canada
the
fees
previous
in
from
an
contributed
rates
revenue
additional
the
for
year
previous
visa
increased
due
$5,300,000
$800,000
students
to
year.
a $6,000,000
by
of
$20,500,000
towards
The
and
revenue.
increase
15%
one
the
increase
Investment
infrastructure
time
as
in
a
enrollment.
inflow
result
also
income
the
of
applied
that
the
previous
Non-credit
15%
was
supports
to
higher
other
increase
year.
fees
research
student
than
The
in
decreased
Governmentlast
tuition
activities.
fees
year
rate,
and
by
by
?????
that
This
Teachers
in
Pension
calendar
have
plan
Plan
chosen
Insurance
covers
year
for
2004
Certain
to
six
remain
and
($95,900
members
Members
Annuity
in the
in
of
2003).
Association
defined
the faculty
contribution
and
and
College
staff
plan.
for
Retirement
whom
University
contributions
contributions
Equities fund
were
were
in
paid
1971,
$61,500
to
and
the
$700,000 due to an increase in fund balances.
?
12.
?
Financial Instruments
Salaries and benefits increased by 5% in total. Salary increases, merit increases, market
adjustments and additional new positions to cope with the growth of the organization, account
for the increase. A portion of the tuition increase was allocated to scholarships, bursaries and
awards. As a result,, student financial assistance increased by $5,100,000. In the non-salary
category the largest increases were in professional fees as a result of consultants hired to
assist in the implementation of new computer systems for finance, budget and human
resources/payroll.
Ancillary Enterprises
Included in Ancillary Enterprises are the Bookstore, Food Services, Residences, Parking
Operations, the Microcomputer Store and Reprographics. Ancillary Enterprises are mandated
to break even but are allowed to retain their surpluses for future upgrades to facilities,
equipment replacement and for new service initiatives. Total reserves are $4,200,000.
The SFU Bookstores in Burnaby, Harbour Centre, and Surrey provided over $11 million worth
of books, products, academic supplies and services to the university community. The stores
also sponsored numerous campus events and provided donations to student groups. Each
month an SFU faculty author is featured in the bookstore. Renovations to the downtown store
should be completed by the end of May, 2005.
Food Services on the Burnaby campus, completed a $1,200,000 renovation to the Mckenzie
Cafeteria and started a $1,200,000 renovation to the fine dining facility at the Diamond
University Centre. A new residence dining hall opened in September 2004 with a mandatory
meal plan for the 500 students living in the new residences.
Residences opened two new residence towers with 464 student rooms and 14 hotel rooms and
a new 300 seat dining hail in September 2004.
?
A third residence tower, scheduled for
completion in Summer 2005, will complete the $41.5 million residence construction project
begun in 2003.
?
In total SFU will offer an additional 727 undergraduate residence spaces to
bring the total residence spaces available at SFU to 1,831.
The Parking Operation supports all parking lot expenses and repays the debt on the parkade.
There were no increases in parking rates during the year. The students voted to continue with
the U-Pass program which has reduced the pressure to increase the number of parking spaces.
..
Page 3
The University's financial instruments consist of cash and short term investments, accounts
receivable, investments, accounts payable and accrued liabilities and long term debt. It is
management's opinion that the University is not exposed to significant interest, currency or credit
risk arising from these financial instruments. The carrying values of accounts receivable, accounts
payable and accrued liabilities approximate their fair value due to the relatively short periods to
maturity of the instruments. The fair value of long-term debt approximates the carrying value due
to the nature of the existing terms.
13.
Pledges
Pledges made by donors to the University for donations to be received in future years are
estimated at $12,794,000 (2004 - $12,300,000). Pledges are not recorded in the financial
statements until the related donations are received by the University.
14.
Contingencies
Simon Fraser University is the defendant to several unresolved statements of claims. It is not
expected that the ultimate outcome of these claims will have a material effect on the financial
position of the University. Any payouts that may result from these claims will be recorded in the
period when it becomes likely and determinable.
15.
Canadian University Reciprocal Insurance Exchange
The University is a member in a self-insurance co-operative in association with other Canadian
universities to provide property and general liability insurance coverage. Under this arrangement
referred to as the Canadian University Reciprocal Insurance Exchange (C.U.R.l.E.), the University
is required to share in any net losses experienced by C.U.R.I.E. The commitment was recently
renewed to December 31, 2008.
Page 20
from
Endowment
endowments
consists
must
of restricted
be used in
donations
accordance
to the
with
University.
the various
The
purposes
investment
established
income generated
by the
?
The Microcomputer Store continues to offer an increased level of customer service to SFU by
donors or the Board of Governors. Donors as well as University policy stipulate that the economics
?
offering on-site consultation, loaning equipment, and providing a more interactive environment
for the campus community. The Microcomputer Store relocated to a larger store located in the
value of the endowments must be protected by limiting the amount of income that may be
expended, and reinvesting unexpended income.
?
new Cornerstone building and has opened a Canada Post outlet to serve the new community.
Reprographics, made significant investment in new state of the art printing technology in the
11. Pension Plans ?
last two years year and has done very innovative and very high quality work. All student course
The assets and liabilities of pension plans are not reflected in the University's financial statements.
?
packs are produced by Reprographics for the Bookstore.
Academic Pension Plan
The University Pension Plan for Academic Staff generally provides benefits on a money purchase
basis, but includes an option to members who were in the plan on March 20, 1973 to choose
benefits based on years of service, and the average of the highest sixty (60) consecutive months'
salary. It is fully funded by the employer. Contributions by the University for the calendar year
2004 were $7,478,000 (2003 - $6,911,000).
An amendment to the plan in 1981 and a letter of agreement between the University and the
Faculty Association in 1990 addressed the funding and the distribution of the formula retirement
benefit account. The latest actuarial valuation for this group as at December 31, 2003 shows an
actuarial liability of $17,380,000 against the actuarial value of assets of $16,979,000 resulting in an
unfunded liability of $401,000. The University will contribute $56,400 per year starting in 2005/2006
towards the unfunded liability.
The valuation is based on the 1994 Uninsured Pensioners Mortality Table, using an investment rate
of return of 6.5% and price inflation of 3%. ?
is
Administrative/Union Pension Plan
The University Pension Plan for the Administrative/Union Staff provides benefits based on years of
service and the average of the highest sixty (60) consecutive months' salary. Pensions are
indexed to CPI up to a maximum of 3% per annum. Under the Pension Plan:
a.
The University's contribution is based on the amounts estimated by the Actuary and
recommended by the Administrative/Union Pension Plan Trustees to the Board of
Governors of the University. The University shall contribute to the fund such amounts as
the Board of Governors determines are required to fund the retirement benefits. Employees
do not contribute to the Plan.
b.
The latest actuarial valuation as at December 31, 2001 showed an actuarial liability of
$112,725,000 against market value assets of $127,409,000, resulting in a surplus of
$14,684,000. This surplus is not available to the University as the University shall not
suspend or reduce its contribution to the pension fund without the prior approval of the
employee organizations. Pursuant to an agreement between the University and the
employee organizations, the portion of the surplus in excess of 15% of the defined-benefit
portion of the above liabilities with assets taken at market values would be distributed to
members. The valuation at December 31, 2004 has not yet been completed.
C.
The rate of employer contribution was also increased from 11.43% to 11.44%, effective
January 1, 2002, as indicated by the 2001 actuarial valuation. Contributions by the
employer for the calendar year 2004 were $7,372,000 (2003 - $6,829,000).
Research
University research is mainly funded by the Federal agencies (National Science and
Engineering Research Council and Social Services and Humanities Research Council) and the
provincial government. In addition, over $12 million comes from private sector corporations and
foundations and non-profit organizations. There are over 1,500 active research accounts with
total activity of over $50 million compared to $46 million the previous year. The Canada
Foundation for Innovation awarded $4.2 million for infrastructure under several categories and
$3.8 million was received from the Province of BC's Knowledge Development Fund as matching
funds. The Federal government's Canada Research Chair program continues to grow and
awarded $3.6 million for salaries and research purposes.
Endowment
The University's endowment consists of restricted donations to the University and internal
. allocations, the principal of which is required to be maintained in perpetuity. The investment
income generated from endowments can be spent only in accordance with the various
purposes established by the donors or the University's Board of Governors.
The Endowment Fund investment strategy aims to maintain the purchasing power of the
original capital value of endowments for future generations. It also ensures that spending
allocations remain stable each year through the use of an income stabilization fund. The
Endowment Fund is invested in bonds and equity markets to meet this strategy over the long
term.
This fund received $18,500,000 from the SFU Community Trust during the year pursuant to 99
year property leasing arrangements. The fund stands at $116,000,000 at the end of the fiscal
year.
Specific Purpose
The sources of specific purpose funds include government and corporate grants, conference
fees, private donations and interest income from endowments for programs and scholarships.
There are many international activities coordinated through the office of SFU International and
the Canadian International Development Agency funds projects in Ghana, China, Mongolia and
Mexico. Field Schools funded by participants were held in Fiji, Prague, France and Greece.
• ?
The Asian Development Bank, is funding a Distance Education program in Sri Lanka.
Page 4
Page 19
Capital ?
The General Operating is composed of carryover funds for faculties and departments under a
policy that allows them to carry over unspent budget. It also includes unspent balances on specific
Major approved projects under construction or being designed include:
?
projects, internally funded research already in progress, funds set aside for specific provisions and
one-time non-recurring expenditures as approved by the Board of Governors.
The Arts and Social Sciences Complex ($30 million); the Technology and Science Complex
Module 1 ($25.7 million); the Technology and Science Complex Module 2 ($50.6 million); the
?
The Ancillary Enterprise represents accumulated funds held for the ongoing operations of
Health Sciences Building ($41.5 million); Segal Graduate School of Business ($17.8 million);
?
ancillaries such as the Bookstore, Food Services, Microcomputer Store, Residences and Parking.
the New Surrey Campus ($70 million; two office floors completed in September 2004); the
Gymnasium Expansion and New Fitness Centre ($16 million); Student Residences and Dining
?
Capital represents funds that are committed to capital projects. The current year deficit reflects
Hall ($38.5 million; two buildings and dining hail completed in September 2004)); the
?
financing to be recovered from future years' operations.
Interdisciplinary Research in the Mathematical and Computational Sciences (IRMACS) facility
($6.8 million; completed in September 2004).
?
Specific purpose represents funds from various sources that are allocated internally to specific
activities.
Minor activities include $2 million on energy efficient projects, $1.6 million on a turf field and
other projects such as the renovation to the Diamond University Centre, the Maggie Benston
?
The funds committed for long term commitments are set aside to meet the cost of future
Centre and the third floor of Harbour Centre building.
?
obligations.
The University spent $12 million on computer equipment, $12 million on furniture and $8 million
?
a. Lease commitment funds provide for commitments entered into for the occupancy of the
on library acquisitions. ?
University's Harbour Centre facility, which include lease payments, tenant loan payments and a
contribution towards operating costs. Lease and tenant loan obligations include annual
SFU's share of 25% of the Great Northern Way Campus Trust valued at $12 million, is
?
payments of $1,140,000, which started in September 1988 increasing to $1,648,000 over the
consolidated in the University's financial statements.
?
term of the lease, and a termination payment of $8,000,000 upon the expiry of the lease in
December 2017 or a discounted equivalent of that amount at an earlier date.
b. Self-insurance funds are held to pay self-insured property and liability losses.
10. Endowment
?
2005
?
2004
?
(cOO) ? (000)
Balance, beginning of year
?
$102,201
?
$ 97,102
Donations ?
1,383
?
2,665 ?
Capitalized income and other transfers
Equity recognized when SFU Community
Trust was deemed to be a controlled entity
in the current year ?
31689 ? -
?
Equity income for the year from
SFU Community Trust
?
175 ?
-
Other ?
8,602 ?
2,434
Balance, end of year
?
$116,050
?
$102201
During the year ended March 31, 2005, the endowment fund received $18,500,000 via SFU
Community Trust pursuant to property leasing arrangement; of which $4,746,000 was recognized
as a direct increase to net assets held as endowment principal and the balance of $13,754,000 was
accounted for as deferred lease proceeds to be amortized to net assets held as endowment
principal over the remaining 98 years of the related lease arrangements that gave rise to the funds.
All of the related funds are invested and the income there from is allocated to the endowment fund.
Page 5
Page 18
BDO Dunwoody LLP ?
600 Cathedral Place
I
B D
?
Chartered Accountants
?
925 West Georgia Street
__________________ ?
Vancouver, BC. Canada V6C 31_2
Telephone: (604) 688-5421
Driving Growth
?
Fax: (604) 688-5132
www.bdo.ca
Auditors' Report
To the Members of the Board of Governors
of Simon Fraser University
We have audited the Statement of Financial Position of Simon Fraser University as at March 31,
2005 and the Statements of Operations and Changes in Operating Net Assets, Changes in Net
Assets, and Cash Flows for the year then ended. These financial statements are the responsibility
of the University's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those
standards require that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial
position of the University as at March 31, 2005 and the results of its operations and its cash flows
for the year then ended in accordance with Canadian generally accepted accounting principles.
The financial statements as at March 31, 2004 and for the year then ended were audited by the
Auditor General of British Columbia who expressed an opinion without reservation on those
statements in his report dated May 20, 2004.
<-;7h? ?
'--'i
Lç
Chartered Accountants
Vancouver, British Columbia
May 13, 2005
9.
8.
2003. The increase of $7,978,000 will be amortized over the average remaining service period of
active employees. The average remaining service period of active employees covered by the non-
pension benefits as of March 31, 2004 is 9 years.
?
0
The March 31, 2003 valuation is based on the 1994 Uninsured Pensioners Mortality table. The
actuarial assumptions used in this valuation are a discount rate of 6.75%, price inflation at 2.5% per
annum, a medical trend rate of price inflation plus 3.5% and a dental trend rate of price inflation
plus 2.9%. There are no contributions by the employees to fund this benefit. The next valuation
will be March 31, 2006.
Deferred Contributions
Deferred contributions represent unspent resources externally restricted for a particular use relating
to a subsequent period. Changes in the deferred contributions are as follows:
Sponsored
Specific ?
Capital
2005 ?
2004
Research
Purpose
Total ?
Total
(000)
(000)
?
(000)
(000)
?
(000)
Balance beginning of
the year
?
$27,561 $18,448 ?
$222,121
268,130 ?
$225,033
Add: Contributions
received during the year ?
52,494
25,595 ?
36,481
114,570 ?
127,200
Less: Transferred
to revenue
?
52,926
31,724 ?
8,312
92,962 ?
84,103
Balance end of year
?
$2Z,i2
$j2,31l9 ?
$25Q,29Q ?
$289,738
$268.130
Under the deferred method of accounting for contributions, restricted
contributions related to
expenses of future periods are deferred and recognized as revenue in the period in which the
related expenses are incurred. ?
The $250,290 of deferred capital contribution represents the
unamortized portion of restricted capital advances relating to assets which were purchased with
restricted contributions.
Restricted for Specific Commitments
2005
2004
(000)
(000)
General Operating
Carryovers - faculties & departments
30,237
$18,228
Auxiliaries and special projects
1,778
1,351
Research and other grants
16,364
12,294
Capital equipment
2,037
2,124
Specific provisions
2,535
1,610
Non-recurring expenditures
4,518
11,835
Total General Operating
57,469
47,442
Ancillary enterprises
4,253
5,955
Capital
(4,031)
(3,144)
Specific Purpose
14,334
8,445
Long-term commitments
Lease commitment
16,505
16,592
?
1*
Self insurance
247
-
?
356
Total Restricted for Specific Commitments
BDO
Dunwoody
LLP is a Limited
Liability Partnership
registered
in Ontario
Page 17
Page 6
NET ASSETS
Operating
(18,892)
(17,120)
Restricted for specific commitments (Note 9)
88,777
75,646
Invested in capital assets
164.166
150,665
234.351
209,191
Endowment (Note 10)
116.050
102,201
350,101
311,392
$ ?
893,852
$
?
798,222
The accompanying notes are an integral part of these financial statements
Ave
ç
?
i
•j
S. Rasul
?
P. Hibbitts
Acting Chair
?
Vice President
Board of Governors
?
Finance and Administration
SIMON FRASER UNIVERSITY
Statement
STATEMENT OF FINANCIAL POSITION
AS
AT MARCH
31, 2005
(thousands of dollars)
7.
Employee Future Benefits
2T
- ?
2004
. .
Group
?
Early
?
Non-Pension ?
Total
?
.
?
Total
ASSETS
:
Insurance
?
Retirement
?
Benefits
?
i 2005 ?
2004
(000) ?
(000) ?
(000) ?
L (000) ?
(000)
CURRENT ASSETS
Cash and short-term investments (Note 3)
?
$
123,099 ?
$
140,321
Opening Balance
?
$4,908
?
$4,964 ?
$17,609 ?
$27,481
?
$24,614
Accounts receivable
Inventories
1,673
1,954
Current Costs
?
-
?
-
?
1,212 ?
1,212 ?
871
Prepaid expenses
3,429
3,770
145,127
160,324
Interest on benefit obligation ?
301 ?
304 ?
1,572 ?
2,177
?
2,317
Investments (Note 4)
243,380
212,275
Amortization of Net
Capital assets (Note 5)
494,1560
414,549
Actuarial Loss
?
- ?
- ?
567 ?
567 ?
567
Unamortized debt discount and issue costs
10,785 11 074
5,209 ?
5,268 ?
20,960 ?
31,437
?
28,369
$
893,852
?
$
798,222
Disbursements
?
-
?
406 ?
538 ?
944 ?
888
LIABILITIES AND NET ASSETS
$5,209
?
$4,862
?
$20 422
?
isamm$27 481
CURRENT LIABILITIES
Group nsurance
Accounts payable and accrued liabilities
?
$
41,708
?
$
22,476
Current portion of long term debt (Note 6)
6 323
6,176
Group insurance is designated for potential requirements related to self-insured long-term disability
48 031
28,652
plans.
?
Annual premiums are funded from the general operating funds on a cost of claim plus fee
for
?
basis
?
According to Manulife, the insurer, the reserve required at March 31, 2005 to
Employee future benefits (Note 7)
30,493
27,481
services
Long-term debt (Note 6)
161,735'
162,567
pay disability pension payments is $5,492,000
?
Some of these employees have returned to work
Deferred contributions (Note 8)
39 448
46,009
since March 31, so the reserve of $5,209,000 that has been internally designated to fund this
Deferred contributions related to capital assets (Note 8)
250,290
222,121
liability is considered adequate
Deferred lease proceeds (Note 10)
13,754
543,751
486,830
Early Retirement
The early retirement amount represents current and future pension payments to employees that
took early retirement in the mid 1980's and other employees that receive supplementary pensions.
The actuarial liability at December 31, 2003 was determined by a March 21, 2003 actuarial
valuation based on the 1994 Uninsured Pensioners Mortality table. The actuarial assumptions
used in this valuation are a discount rate of 6.25% and an inflation rate of 2.5% per annum. The
next valuation will be at March 31, 2006. Assets have been internally designated to fund this
liability.
Non-Pension Benefits
The non-pension benefits amount represents portions of premiums payable to current and future
retirees for the Medical Services Plan, Extended Health Benefits and Dental Benefits. The accrued
benefit liability for non-pension benefits is $20,422,000 (2004 -$17,609,000). At March 31, 2005
an amount of $6,130,000 has been internally designated to fund this liability.
An actuarial valuation was done at March 31, 2003 to reflect the changes in staff and faculty and
increase in premiums since the previous valuation at March 31, 2000. The actuarial valuation
shows an increase of $7,978,000, which brings the total obligation to $23,080,000 at March 31,
Page 16
Page 7
2005
REVENUE
Government grants and contracts
Province of British Columbia
Government of Canada
Other governments
Student fees - credit courses
- non-credit courses
- other
Gifts, grants and contracts
Sale of goods and services
Investment income
Miscellaneous income
Amortization of deferred capital contributions
EXPENSE
Salaries - academic
- other instruction and research
- support staff
Total salaries
• Employee benefits (Note 7)
Travel and personnel costs
Materials and supplies
Communications
Other operational expenses
Amortization of Capital assets
Grants to other agencies
Utilities
Renovations and alterations
Scholarships, bursaries and prizes
Contract services
Professional fees
Cost of goods sold
Interest on long-term debt
Equipment rental and maintenance
$
?
175,354
48,208
1,684
103,741
8,312
7,330
22,076
31,835
13,509
4,260
8,312
424,621
78,794
42,506
81,921
203,221
36,708
12,855
14,320
1,441
19,213
29,122
4,836
5,307
5,569
21,672
4,721
1T938
10,177
9.038
3.448
399,586
2004
(000)
•
$
5,276
4,931
150,000
16,828
(8,292)
168,743
(6.176)
Si 62.567
2005
-(000)
$ 712
4,905
4,803
150,000
16,828
(9,190)
168,058
(6,323)
.
SIMON FRASER UNIVERSITY
STATEMENT OF OPERATIONS and ?
CHANGES IN OPERATING NET ASSETS
FOR THE YEAR ENDED MARCH 31, 2005
?
(thousands of dollars)
6. ?
Long Term Debt
Demand Loan
Term Loans
Mortgages
Debentures - Senior unsecured
Debentures - Province of BC unsecured
(less: Sinking Funds)
Current Portion
Total Long Term Debt
The demand loan is the University's 25% share of the Great Northern Way Campus Trust non-
revolving loan that bears interest at prime plus 0.65% per annum. It is secured by the assets of the
trust.
Term loans, secured by promissory notes, bear interest rates between 2.88% and 2.95%, and are
due for renewal in December 2005 and January 2006.
Mortgages include CMHC Mortgages and a mortgage on property held in the Great Northern Way
Campus Trust. CMHC Mortgages issued by the Canadian Mortgage and Housing Corporation are
secured by student residence buildings. They bear interest rates between 5.375% to 6.875% and
mature between January 1, 2017 and July 1, 2019 with annual payments including principal and
interest until maturity amount to $248,000. The GNWCT mortgage bears interest at 5.1% per
annum with interest only payments of $131,000 annually until maturity on October 1, 2007.
?
0
The University issued $150,000,000 of 5.613% Senior Unsecured Debentures in June 2004. The
debentures have semi-annual interest payments and mature June 10, 2043. Net
proceeds of the
issue are being used primarily to finance capital projects. As at March 31, 2005, approximately
$68,000,000 (2004 - $116,000,000) of the net funds realized remain to be expended on approved
capital projects. The debentures are neither obligations of, nor guaranteed by, the Province of
British Columbia.
Debentures issued to the Province of British Columbia pursuant to the Financial Administrative Act,
bear interest rates from 6.0% to 9.5%, and mature between 2005 and 2022.
Annual payments including principal and interest due within the next five years are as follows:
Total
(000)
Statement 2
2004
$ ?
177,578
32,224
1,553
83,513
8,595
6,190
25,872
27,156
14,583
4,042
8,453
389,759
75,249
38,854
75,596
189,699
36,341
11,311
13,513
1,331
18,032
26,438
3,099
5,058
5,120
16,794
3,965
14,268
8,835
8,383
3,240
365,427
2006
$11,475
2007
$13,342
2008
$10,717
2009
$10,622
2010
$10,527
Page 15
NET REVENUE FOR THE YEAR
CHANGES IN NET ASSETS
Increase in restricted for specific commitments
Increase in investment in capital assets
Equity earnings transferred to endowment
is ?
0
NET CHANGE IN OPERATING NET ASSETS
OPERATING NET ASSETS, beginning of year
OPERATING NET ASSETS, end of year
25,035
(13,131) ?
(13,501)
?
(175)
(1,772)
(17,120)
$
?
(18,892)
24,332
(1,100)
(23,424)
(192)
(16,928)
$ ?
(17,120)
Page 8
Statement 3
The Vancouver Foundation holds a number of endowment funds for the benefit of the University.
SIMON
FRASER UNIVERSITY
These funds totalled $7,338,000 at March 31, 2005 and the portion of $5,305,000 belonging to the
financial ?
statements.
In the fiscal ?
2004/05 these
University is included in the
University's
year
STATEMENT OF CHANGES IN NET
ASSETS
funds generated income of $369,194
(2004 - $422,418) for the University to be
used for specific
FOR THE YEAR ENDED MARCH 31, 2005
pp
(thousands of dollars)
Bonds and Debentures Analysis
-..............-
?
005
2004
Cost
Market
Cost
Market
Internally
(000)
(000)
(000)
(000)
General
Restricted for ?
Invested in
Restricted for
. _
•
Segregated Assets
Operating
Commitments
Specific ?
Capital Assets
Principal
Endowment
?
TOTAL
Government bonds
.
Federal & guaranteed
$ 25,209 ?
$
25,722
$ ?
22,866
$23,618
Provincial & municipal
26
,
639
27,586
18,180
18,887
51,848
53,308
41,046
42,505
NET ASSETS, beginning of year
$ ?
(17,120) $
75,646 ?
$ ?
150,665 ?
$
102,201 ?
$ ?
311,392
Corporate debentures
15,848
15,838
12.413
12.552
Sub-total segregated
67,696
69,146
53,459
55,057
Indexed Bond Fund
54.281
55.491
53.930
56.955
CHANGES FOR THE YEAR
Sub-total externally managed
121,977
124,637
107,389
112,012
Net Revenue for the Year
25,035
-
?
-
-
?
25,035
Internally managed Bonds
3,986
4,036
3.897
3,874
Total Bonds and Debentures
$128, 6 73
$111,286
$1 15.866
Transfers
Increase in restricted for
(13,131)
13,131
5.
Capital Assets
specific commitments
-
Increase in investment
Cost
Accumulated
2005
2004
in capital assets
(13,501)
13,501
Amortization
Net
Net
Equity earnings transferred
000
00
to endowment
(175)
. -
?
-
175 ?
-
(26,807)
13,131 ?
13,501
175 ?
-
Buildings - concrete
$ 443,775
$113,330
$330,445
$267,674
- wood
21,644
9,958
11,686
12,069
Endowment Transactions
Site services
25,857
8,806
17,051
15,417
Contributions
1,383
?
1,383
' ?
"
Leasehold improvements
11,803
5,398
6,405
6,702
Capitalized income and
Computing equipment
30,633
8,939
21,694
17,548
other transfers
12,291 ?
12,291
Equipment & furnishings
66,781
21,259
45,522
38,418
-
-
?
-
13,674 ?
13,674
Library books
64,786
25,589
39,917
36,610
NET ASSETS, end of year
$
0
?
8,8921 $
88,777 $
?
164,166$
116,050
?
$ ?
350,101
Special collections
6,417-
-
6,417
6,275
Land
16,143
-
16143
13.836
Represented By:
Total Capital Assets
$_
494.56Q
-
$414,549
Employee Future Benefits (Note 7)
Funded Liability ?
16,201
Space in the Central City complex for the Surrey campus, is included in buildings.
The 429 acres
Accrued Liability
(30,493)
of land in Burnaby is recorded in the financial statements at its
1965 assessed
value of $572,000.
Unfunded Portion
(14,292)
78 acres of this land is set aside
for development by the SFU Community Trust.
Vacation Pay, accrued
but not funded
(4,600)
Operating Net Assets
(Deficit)
$ ?
(18,892)
..
Page 14
Page 9
$
?
25,035
?
$ ?
24,332
?
(8,312)
?
(8,453)
?
29,122
?
26,438
289
?
3,012
?
2,867
(175)
?
48,971
?
45,184
?
(3,529)
?
(1,747)
?
281
?
(167)
?
341
?
(2,501)
?
19,232
?
4,358
?
(6,561)
?
11,547
?
58,735
?
56,674
18,500
(31,105)
(109 133)
9,985
(111 753)
36,481
712
(1,397)
(12,609)
(100,219)
5,099
(107,729)
40,003
139,274
(6,496)
172,781
121,726
18,595
140,321
Cost
Market
(000)
(000)
$ ?
4,475
$
?
4,475
113,736
113,736
4.888
4.888
$jg34Q9
2004
?
•
•
?
INVESTING ACTIVITIES
Cost
Market
Distributions from SFU Community Trust
(000)
(000)
Net increase in long term investments
$(1 4,300)
$(1 4,300)
Capital assets purchased
147,920
147,920
Endowment contributions
6,701
$JAQl
6,701
$140.321
CASH USED IN INVESTING ACTIVITIES
2004
?
Cost
?
Market
?
(000) ?
(000)
?
$111,286
?
$115,886
42,072
56,268
31,931
25,503
11,730
11,730
5,305
6,871
3,765
3,765
2,555
2,098
3.631
$212.275
3,934
$226,055
Statement 4
g.
h.
3.
Long term investments, in marketable securities, are carried at cost or, when donated, at their fair
market value at the date of the ownership transfer to the University. When there has been a
down
decline
to
in
net
the
realizable
value of
value.
an investment that is not considered temporary, the investment is written
40
Gains and losses on sales of investments are recognized in the year of disposal and are included in
investment income.
Inventories
Inventories of supplies kept at Central Stores are recorded at cost. Inventories of merchandise
held for resale in the Bookstore and the Microcomputer Store are recorded at the lower of
acquisition cost and net realizable value.
Use of Estimates
The preparation of financial statements in accordance with Canadian generally accepted
accounting principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements, and revenue and
expenses during the reporting period. Significant areas requiring the use of management
estimates include the impairment of assets, provision for doubtful accounts, amortization period for
capital assets, and actuarial assumptions for employee future benefits. Actual results could differ
from management's best estimates as additional information becomes available in the future.
Cash and Short Term Investments
SIMON FRASER UNIVERSITY
• ?
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2005?
(thousands of dollars)
OPERATING ACTIVITIES
Net Revenue for the Year
Items not involving cash
Amortization of deferred capital contributions
Amortization of capital assets
Amortization of debt discount and issue costs
Employee future benefits
Equity from SFU Community Trust
Changes in non-cash operating balances
Accounts receivable
Inventories
Prepaid expenses
Accounts Payable and accrued liabilities
Deferred contributions
CASH PROVIDED BY OPERATING ACTIVITIES
4.
Cash
Short term notes
Bonds maturing under one year
Total Cash and Short Term
2005
Cost
Market
(000)
(000)
$125,963
$128,673
58,637
77,105
37,356
37,763
11,827
11,827
5,305
6,892
2,292
2,292
2,000
2,014
g66,566
Bonds and debentures
Canadian equities
Foreign equities
Long term annuity
Vancouver Foundation
Loans to SFU related entities
Donated hedge fund
Pooled balanced fund
Total Long Term
Long Term Investments
Long term investments at fiscal year end are comprised of the following:
FINANCING ACTIVITIES
Deferred capital contributions
Demand loan proceeds
Bond issue net proceeds
Debt principal repaid
CASH PROVIDED USED IN FINANCING ACTIVITIES
a
NET INCREASE (DECREASE) IN CASH AND
SHORT TERM INVESTMENTS
CASH AND SHORT TERM INVESTMENTS, beginning of year
CASH AND SHORT TERM INVESTMENTS, end of year
is
Page 13
Page 10
SIMON FRASER UNIVERSITY
?
Revenues received for the provision of goods and services are recognized in the period in which
the goods or services are provided by the University. Revenues received for a future period are
NOTES TO THE FINANCIAL STATEMENTS
?
S ?
deferred until the goods or services are provided.
FOR THE YEAR ENDED MARCH 31, 2005
?
Gifts-in-kind are recorded at fair market value on the date of their donation or at nominal value
when the fair market value cannot be reasonably determined.
1.
Authority and Purpose
Simon Fraser University is an agent of the Crown and operates under the authority of the University
Act, R.S. Chapter 468. The purpose of the University is to conduct research and deliver a full
range of undergraduate, graduate and continuing studies programs. Simon Fraser University is a
not-for-profit entity governed by a Board of Governors, the majority of which are appointed by the
provincial government of British Columbia. The academic governance of the University is vested in
the Senate. The University is a registered charity and is therefore exempt from income taxes under
section 149 of the Income Tax Act. The University receives a significant portion of its revenues
from the Province of British Columbia.
Summary of Significant Accounting Policies and Reporting Practices
Accounting Method
The financial statements are prepared in accordance with Canadian generally accepted accounting
principles for not-for-profit organizations on a non-fund basis, as the operations for the entire
University have been combined for reporting purposes. These principles are consistent with those
used in prior years.
The deferral method of accounting for contributions is used. Results are reported in the operating
fund, special purpose fund and capital fund. Revenues and expenses are recorded on a gross and
accrual basis.
C. ?
Related Entities
The University's 25% interest in the Great Northern Way Joint Venture is recorded on a
proportionate consolidation basis. The SFU Community Trust and SFU Foundation are recorded
based on the equity method beginning in the current fiscal year when these entities were deemed
to be controlled.
SFU Community Trust is developing 78 acres of land on the Burnaby campus into a residential
area. The SFU Community Trust was established as a Trust under the laws of British Columbia on
July 29, 2002 and the beneficiaries of the Trust are the University and the Simon Fraser University
Foundation.
Details of other corporations and consortiums, in which Simon Fraser University may have a
significant interest, are contained in Note 16. These other entities are not consolidated in these
financial statements as the net assets are not contemplated to be, and are not, readily realizable by
the University.
d. ?
Capital Assets
40
Capital asset acquisitions are recorded on the statement of financial position at cost. Donated
assets are recorded at fair market value at the date of acquisition. Amortization of capital assets is
recorded on a straight line basis over the estimated life of the asset and commences in the year
following acquisition. Estimated useful life is as follows:
2.
a.
b.
Revenue Recognition
Operating government grants not restricted in use are recognized when received or receivable.
Such grants, if contributed for a future period, are deferred and reported as deferred contributions
until the future period.
Externally restricted contributions received for:
Site services
Buildings ?
- concrete
- wood frame
Library books
Equipment and furnishings
Computing equipment
Leasehold improvements
50 years
50 years
30 years
10 years
8 years
3 years
Term of Lease
• Purposes other than endowment or the acquisition of capital assets are deferred and
recognized as revenue in the year in which the related expenses are incurred.
• The acquisition of capital assets having limited life are initially recorded as deferred
contributions in the period in which they are received. They are recognized as revenue over
the useful life of the related assets.
Endowment contributions and related investment income allocated for endowment capital
preservation and growth are recognized as direct increases in net assets in the period in which they
are received or earned.
Unrestricted contributions are recognized as revenue when received. ?
5
No amortization is taken on land, works of art and collections, which include that portion of library
assets considered to have permanent value, as they are considered to have an unlimited useful
life.
e.
Debt Discount and Issue Costs
Debt discount and costs related to debt issues are capitalized and amortized over the life of the
debt.
f.
Investments
5 ?
Short term investments are recorded at the lower of cost or market value.
Page 11
?
Page 12
