• FOR INFORMATION

?

S.99-47

SIMON FRASER UNIVERSITY

?

MEMORANDUM

Senate

FROM: ?

Alison Watt

Director, Secretariat Services

DATE: ?

August 18, 1999

SUBJECT:

Annual Financial Statement

Section 32 of the University Act states: "The board shall make an annual report of

its transactions to the Minister, in which shall be set out a balance sheet and a

statement of revenue and expenditure for the year ending on the preceding March

31, and other particulars the Minister may require. A copy of the annual report shall

be transmitted promptly to the senate."

A copy of the report is attached.

NOTE:

• ?

IF YOU DO NOT WISH TO KEEP THE ANNUAL FINANCIAL STATEMENT,

PLEASE RETURN IT TO BOBBIE GRANT, OFFICE OF THE REGISTRAR.

---

SIMON FRASER UNIVERSITY

Elm

UI

. .

FINANCIAL STATMENTS

FOR THE YEAR ENDED MARCH 31, 1999

0 .

---

.

SIMON FRASER UNIVERSITY

FINANCIAL STATEMENTS

MARCH 31, 1999

TABLE OF CONTENTS

Page

1.

Statement of Management Responsibility

?

i

2.

Report of the Vice-President Finance & Administration

?

2

.

?

S

3. Report of the Auditor General

?

7

4.

Audited Statements

- Statement of Financial Position

?

8

- Statement of Operations and Changes in Operating Net Assets

?

9

- Statement of Changes in Net Assets

?

10

- Statement of Cash Flows

?

11

5.

Notes to the Financial Statements

?

12

0 is

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STATEMENT OF MANAGEMENT RESPONSIBILITY

?

9 ?

0

The university is responsible for the preparation of the financial statements and has

prepared them in accordance with generally accepted accounting principles for not-for

profit organizations. The financial statements present fairly the financial position of the

university as at March 31, 1999 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, 1999 have been reported on by

the Auditor General of the Province of British Columbia, the auditor appointed under the

University Act. 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.

I

cit

JjákP. Blaney

?

R.W. Ward

Vice President

Finance & Administration

.

Page 1

.,.

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REPORT OF THE VICE-PRESIDENT FINANCE AND ADMINISTRATION

General comment

The university prepares its annual financial statement

according

to generally accepted accounting

principles for non-profit organizations. The operations for the entire entity have been combined

for reporting purposes. However, we continue to manage internally on a fund basis

and I am pleased to provide this additional information for the different funds

Operating fund (000's)

?

Budget ?

Actual ?

Actual

1998-99 ?

1998-99 ?

1997-98 ?

Revenue

Student

Government

fees

Grants

120,60741,052

120,60942,288

119,081

41,314

Investment income

4,206

5,005

4,057

Other income

3,588

4,281

3,536

Total revenue

169,453

172,183

167,988

Expenses

Salaries & benefits

128,087

126,430

123,758

. ?

Library acquisitions

5,010

5,369

4,767

Student financial assistance

4,924

5,103

5,277

Utilities and janitorials

4,597

4,279

4,208

Other non-salary

26,835

28,591

27,577

Total

169,453

169,772

165,587

Net change in fund balance

2,411

2,401

Appropriations opening balance

18,729

16,328

Total Appropriations

21,140

18,729

Total

?

21,140 ?

18,729

This statement reflects the format of the 1998-99 operating budget, approved by the Board

of

Governors

in June 1998. It groups expenses in a different format than the audited statements.

• ?

The summary of the

appropriations

of $21,140 at March 31, 1999 has been extracted

from note 8 to the financial statements.

4,910

4,321

3,756

2,835

5,632

5,096

2,224

1,846

4,618

4,631

Carryovers:

Departmental

AuxilIaries and Special projects

Research and other

contracts

Specific Provisions

Non-recurring expenditures

14.

. .

As of March 31, 1999 the closure costs voluntarily absorbed by the university on behalf of

the Diamond University Club were:

Mortgage payable to Simon Fraser University

?

$257,000

Accounts Payable to Simon Fraser University

?

79,000

Diamond University Club liabilities

?

397,000

Purchase of equipment and furniture

?

89.000

Total

?

$822.000

On December 1, 1998, the Lease Agreement between the Club and the university was

surrendered and leasehold improvements to the building, financed by the operation of the

Society, were relinquished to the university. The leasehold improvements, at a net book

value of $268,000 in the financial statements of the Diamond University Club, were not

independently appraised or recorded by the university.

Contingencies

15.

16.

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.

Uncertainty Due to the Year 2000 Issue

?

.

The Year 2000 Issue arises because many computerized systems use two digits rather

than four to identify a year. Date sensitive systems may recognize the year 2000 as 1900

or some other date, resulting in errors when information using year 2000 dates is

processed. In addition, similar problems may arise in some systems which use certain

dates in 1999 to represent something other than a date. The effects of the Year 2000

Issue may be experienced before, on or after January 1, 2000, and, if not addressed, the

impact on operations and financial reporting may range from minor errors to significant

systems failure which could affect the university's ability to conduct normal business

operations. It is not possible to be certain that all aspects of the Year 2000 Issue affecting

the university, including those related to the efforts of customers, suppliers, or other third

parties, will be fully resolved.

Comparatives

Certain comparative figures have been restated to conform with the current year's

presentation.

Unspent balances that are allocated internally to specific future projects are set up in the

restricted for specific commitments balance. The current year financial statement figures

and comparatives reflect internally restricted amounts within the specific purpose fund as

part of the restricted for specific commitments balance. In prior years, the total fund

balance in the specific purpose fund was recorded as deferred contributions. The effect i

the financial statements is to increase the restricted for specific commitments balance by

$10,117,000 (1998- $8,641,000) and to reduce the deferred contributions by the same

amount.

Page 21

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Page 2

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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.

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 and other plan benefits.

b.

The latest actuarial valuation as at December 31, 1997 showed an actuarial liability

of $87,844,000 against adjusted actuarial assets of $95,164,000, resulting in a

surplus of $7,320,000. 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 a contingency reserve equal to 8% of the

defined-benefit portion of the above liabilities was distributed to members. $648,000

of the above surplus, plus investment earnings thereon, was distributed to the

members in November 1998; the amounts distributed were, to the extent permitted

under the Income Tax rules, allocated to individual money-purchase accounts for

the members, within the Plan, and the balance was paid out in cash.

C. ?

The rate of employer contribution was also increased from 9.89% to 10.82%,

?

effective January 1, 1998, as indicated by the 1997 actuarial valuation.

11.

Financial Instruments

The 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.

12.

Pledges

Pledges made by donors to the university for donations to be received in future years are

estimated at $3,006,000 (1998 - $2,215,000). Pledges are not recorded in the financial

statements until the related donations are received by the university.

13.

Diamond University Club

On November 2, 1998 the Society operating a food and beverage operation in the

university-owned Diamond University Club resolved to cease operations effective

December 20, 1998. At its November meeting, the university's Board of Governors

approved the forgiveness of the debt owing to the university and assumed ownership of all

assets and liabilities upon closure of the Club December 20, 1998.

.

.

Operating Fund

In the past several years the Tuition Fee Freeze Act has frozen tuition fees and

related mandatory fees in this province. Tuition fees at Simon Fraser University

remain at 1995/96 levels; defined as 30 credit hours per year, annual tuition has

been frozen since 1995/96 at $2,310 and remains frozen in 1999/2000. Minor

adjustments have been made to the operating grant in the past five years but the

Province has provided increased enrolment targets to the university and some

funding to support the increase. Since 1995/96 the targets given the university

have increased by 1,293 undergraduate and graduate FTE's and $4,123,000

has been provided as assistance. Special inflationary pressures affect the

goods and services purchased by universities; as examples, books and periodi-

cals, scientific equipment and chemicals. The cost of items purchased has been

negatively impacted by foreign exchange, particularly in the area of library acqui-

sitions.

In 1998/99 a reduction of $228,000 was made to the operating grant and the

Tuition Fee Freeze Act froze tuition fees for the third year in a row. Offsetting

these effects was $177,981 received as Tuition Fee Freeze Compensation and

$1,386,000 to fund 198 new full-time equivalent spaces. In addition, the univer-

sity received the first year of a two year commitment to fund the final phase of

the CUPE Pay Equity program, at $205,000.

Revenues were above budget by $2,730,000 or 1.6%. Credit course fees were

above budget due to increased enrolment in both domestic and Visa under-

graduate full-time equivalents. Non-credit course fees were above budget due to

increased demand in the Executive and International Travel Programs as well as

the introduction of the new Object Oriented Software Technology Program. In-

vestment income increased as the operating base continued to grow. Other in-

come increased in all areas; overheads assessed against ancillary enterprises

and contracts, miscellaneous income such as film revenue and administrative

fees.

Expenses were above budget by $319,000 or 0.2%. Salary and benefit expen-

ditures were below budget due to timing issues related to vacant positions, the

budgetary practice of funding all budget items on a full year, rather than cash

basis, and the segregation of funds over time to recover early retirement pay-

ments. Increased expenditures in library acquisitions and student financial as-

sistance were financed through funds carried forward for this purpose from the

previous year. Other non-salary was above budget following a one-time cost

related to closure of the Diamond University Club and due to increased early re-

tirement payments. The Society which operated a food and beverage operation

Page 3

Page 20

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$8,000,000

increasing to

upon

$1,648,000

the expiry

over

of

the

the

term

lease

of

in

the

December

lease, and

2017

a termination

or a discounted

payment

equivalent

of

?

..in the university-owned Diamond University Club voted to cease operations in

of that amount at an earlier date.

?

December of 1998. The university's Board of Governors approved a motion to

forgive the debt owing to the university and to assume all liabilities of the Club

c. Self-insurance funds are held to pay self-insured property and liability losses.

?

- ?

upon its closure.

9.

10.

Endowment Principal

For a more complete analysis and commentary on revenues and for detail on

1999 ?

•

?

1998

?

.

expenditure items, the 1998/99 Year-end results and the 1999/2000 Operating

(000) ?

.

?

8. ?

Restricted for Specific Commitments

1998

(000)

(000)

General Operating

Carryovers - faculties & departments

$ 4,910

$4,321

Auxiliaries and special projects

3,756

2,835

Research and other grants

5,632

5,096

Specific provisions

2,224

1,846

Non-recurring expenditures

4,6181

4.631

Total General Operating

21,140

18.729

Ancillary enterprises

3,383

2,046

Capital

8,508

7,537

Specific purpose

10,1 17'

8,641

Long-term commitments

Group insurance

3,399

3,121

Lease commitment

16,563

16,512

Self insurance

475

484

Balance end of the year

$3585

$57.070

The General Operating is composed of carryover funds for

faculties and departments

under a policy that allows faculties to carry over unspent instructional salaries and all

. ?

departments to carry over all of unspent non-salary budget.

It also includes unspent

balances on specific projects and internally funded research

already in progress

and funds

set aside for specific provisions and one-time non-recurring

expenditures as approved by

the Board of Governors.

The Ancillary Enterprise represents accumulated funds held for the ongoing operations of

ancillaries such as the Bookstore, Food Services, Microcomputer Store, Residences and

Parking.

Capital represents funds that are committed to capital projects.

Specific purpose represents funds from various sources that are allocated internally to

specific activities.

The funds committed for long term commitments are set aside to meet the cost of future

obligations.

a.

Group insurance funds are designated for potential requirements related to self-insured

group life and long-term disability plans. Annual premiums are funded from the general

operating funds on a cost of claim plus fee for services basis.

b.

Lease commitment funds provide for commitments entered into for the occupancy of

the 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 payments of $1,140,000, which started in September 1988

category, Simon Fraser University submitted five applications and was awarded

all five. In the category of Institutional Innovation (under $350,000), this univer-

sity submitted nine proposals and was awarded six. In the categories of Institu-

tional Innovation (over $350,000) and Regional/National Facilities, Simon Fraser

University was awarded two of five proposals submitted.

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 perpe-

tuity. The investment income generated from endowments can be spent only in

accordance with the various purposes established by the donors or the univer-

sity'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 $3,766,000 in new donations during the year and $2,638,000

of interest income was capitalized in order to protect the economic value of the

endowments. The fund stands at

$81,288,000 at the end of the fiscal year.

Specific Purpose

Consisting of specific projects such as those funded by the Canadian Interna-

tional Development Agency, the sources of specific purpose funds include gov-

ernment grants, conference fees and interest income from endowments. This

fund also includes scholarships funded through endowment income. Activity in

the fund this year was $20 million, similar to that of 1997/98.

Capital

No new capital construction has been undertaken for approximately three years

and is a concern as enrolment targets are increased each year and space be-

comes increasingly constrained.

Construction continued on the International Centre for Dialogue with expendi-

tures amounting to $5.3 million for the year. Funding for this project include a

$4.0 million government grant and other donations. Provincially funded minor

capital cyclical maintenance on campus buildings amounted to $1.9 million, with

an additional $2.4 million expended on renovations and upgrades.

Page 5

Page 18

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7.

Debentures are issued to the Province of British Columbia pursuant to the Financial

Administrative Act. They bear interest at rates from 6.0% to 9.5%, and mature between

2002 and 2020. The debentures are secured by student residence buildings. Annual

payments including principal and interest due within the next five years are as follows:

Total

(000)

2000

$3,294

2001

$3,294

2002

$3,294

2003

$2,622

2004

$1,596

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

-

Research

Purpose

Capital

1999

1998

(000)

(000)

(000)

(000)

(000)

Balance beginning of

the year

$9,182

$6,568

$39,217

$ 54,9671

$50,018

Add: Contributions

received during the year

22,191

13,960

8,608

44,759;

75,683

Debt assumed by the

Province of B.C.

152,506,

152,5061

Less: Transferred

to revenue

22.928

16.522

8,083,

47,5331

70.734

Balance end of year

$_

8,445

$_4.006

$192,248 $204,699 i

$54,967

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 $192,248,000 of deferred capital

contribution represents the "unamortized" portion of restricted capital advances relating to

assets which were purchased with restricted contributions, but which still have an

undepreciated book value.

is

New Ventures

The Burnaby Mountain Community Corporation has been incorporated, and a

Board of Directors constituted, setting the stage for the development of a resi-

dential community on Burnaby Mountain.

Simon Fraser University is expanding its presence in the downtown Harbour

Centre Campus. The new TIME Centre (Technology, Innovation, Management

and Entrepreneurship) will house several new programs, including the Manage-

ment of Technology MBA degree and the Object Oriented Software Technology

program.

The Centre for Dialogue is being constructed in a heritage bank building donated

by Allied Holdings Ltd. Located across Hastings Street from the Harbour Centre

Campus, the Centre will house world-class conference facilities. A fundraising

campaign has been underway for some time to complete the funding of the $17

million project. The federal government contributed $4 million to the project to

mark the Year of the Asia Pacific in 1997. The Centre will be opened in the fall

of 2000..

.

.

is

Page 6

Page 17

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9A\.

q

W

Report of the Auditor General

?

of British Columbia

To the Members of the Board of Governors

of Simon Fraser University:

5.

Capital Assets

1999

Cost

(000)1999

?

??

AccumulatedDepreciation

(000)

???

1999

(000)

Net

???

1998

(000)

Net

Total

Computing

Buildings

Site

Special

Equipment

Leasehold

LandLibrary

services

?

capital

bookscollections

-

-

improvements

wood

concrete&

equipmentassets

?

furnishings

????????

$437.557$1

$274,431

53,73022,92239,09821,75612,517

10,3021.720

1,081

?????????

$79,614

42.330

27,451

14,295

4,3953,0377,4106,128

--

?

?

????????

$295.227

$194,81726,27924,803

15,628y,

15,512

8,122

7,265,

1,720,

1,081

?????

?

?

??

?

$293.423

$191,078

29,436

22,698

16,267

16,441

7,626

8,480

825

572

The 429 acres of land in Burnaby is recorded in the financial statements at its 1965

assessed value of $572,000. Up to 100 acres of this land has been earmarked for

development by the Burnaby Mountain Community Corporation. The building donated for

the Centre for Dialogue was valued at $1,102,000 and the land was valued at $1,148,000.

6.

Long-Term Debt

In the current year, the Province of British Columbia enacted legislation that released

.

educational and other institutions from debt obligations where principal and interest

payments were funded by the Province. As such $152,506,000 of debt formerly recorded

as a liability of the university is now the responsibility of the Province. The assumption of

debt is treated as a deferred contribution and is amortized to income over the remaining

useful life of the related capital assets.

The university continues to be responsible for certain debt for which it did not previously

receive debt servicing grants.

1999

?

1998

(000)

?

(000)

CMHC

Less:

Demand

Debentures

Sinking

MortgagesLoans

?

Funds

???

: $

27,348

(4.413)

2,741

1,722

?

?

??

$

229,962

(55.727)

2,807

6,040

27,398

?

183,082

Total

Current

Long-term

Portion

?

Debt

?

$24.593

(2,805)

??

$168..892

(14.190)

Long-term debt annual

principal

and interest payments are funded through a charge to

Ancillary Enterprises operations and from contributions from the Simon Fraser Students

Society for a portion of the Maggie Benston Student Services Building.

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. Annual payments including principal

and interest until maturity amount to $248,000.

I have audited the statement of financial position of

Simon Fraser University

as at

March 31, 1999 and the statements of operations and changes in operating net assets, changes in

net assets and cash flows. These financial statements are the responsibility of the University's

management. My responsibility is to express an opinion on these financial statements based on

my audit.

I conducted my audit in accordance with generally accepted auditing standards. Those

standards require that I 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 my opinion, these financial statements present fairly, in all material respects, the financial

position of

Simon Fraser University

as at March 31, 1999 and the results of its operations and its

cash flows for the year then ended in accordance with generally accepted accounting principles.

.-

/

4^^

,

Victoria, British Columbia

May 28, 1999

Page 7

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Page 16

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Deferred contributions (Notes 7 and 16)

12,451

15,750

Deferred contributions related to capital assets (Note 7)

?

-

192,248

39,217

248,464

259,710

NET ASSETS

Operating

(2,850)

(2,750)

Restricted for specific commitments (Note 8)

63,585

57,070

Invested in capital assets

78,440

78,475

Endowment (Note 9)

81,288

74,884

220,463

207,679

$ ?

468,927

$467,389

The accompanying notes are an integral part of these finan

Approved:

•

? __

E.JaagerR y

Chair

Board of Governors

.

R.W. Ward, Ph.D.

Vice President

Finance and Administration

SIMON FRASER UNIVERSITY

Statement

STATEMENT OF FINANCIAL POSITION

3.

Cash and Short Term Investments (in 000's)

9

AS AT

(thousands

MARCH

of dollars)

31,

1999

1999

1998

1998

Cost

Market

Cost

Market

ASSETS

Cash

Short term notes

$

(165)

4,866

$

(165)

4,866

$ 1,124

10,954

$ 1,124

10,954

CURRENT ASSETS

Cash and short-term investments (Note 3)

?

$

13,434

$ ?

18,018

Effective yield -

4.94%

Bonds maturing under one year

8,733

8,719

5,940

5,975

Accounts receivable

lnventones

18,285

26,138

Effective yield - 5.98%

Prepaid expenses

2,980

849

2,320

726

Total

$13434

$13,420

$18,018

$18,053

35,548

47,202

4. ?

Long-Term Investments (in 000's)

Investments (Note 4)

137,843

124,755

Long-term investments at fiscal year end are comprised

of the following:

Capital assets (Note 5)

295,227

293,423

1999

Cost

Market

Cost

1998

Market

Unamortized debt discount

309

2,009

Canadian

Bonds

Foreign

and

equitiesequitiesDebentures

$83,61022,739

12,183

$90,79823,768

14,821

$77,915

11,17718,658

$86,531

23,404

12,738

LIABILITIES AND NET ASSETS

$

468,927

$467,389

Sun

Not publicly

Life Term

tradedCertain

Annuity

11,439

2,567

11,439

2,567

11,404296

11,404

314

CURRENT LIABILITIES

TotalVancouver

Sub Total

Foundation

$137,843132

5:305538

$151,681

143

8:288393

$124.755

119

5:305

:

450

$142.748

134

8

391

357

•

Accounts

Cu

rrent portion

payable

of

and

long

accrued

term debt

liabilities(Note

6)

?

$

19,172

16,3672,805

$ ?

21,661

14,190

Long-term debt (Note 6)

24,593

168,892

1999

1998

Bonds and Debentures ?

Term to Maturity (in years)

?

No Fixed

Term Analysis ?

1 t 5 ?

5 to 10

?

Over 10

?

Maturity ?

Total

Total

effective

Government

yieldbonds

??

$11,704

5.73% ?

?

$18,5276.84% ??

$7,8368.11%

??

$38,067

6.78%

$41,053

N/A

Total

effective

Variable

Corporate

Bonds

yielddebenturesand

?

Debentures

?

rate

?

$27,73416,0306.80%

bonds

???

$3

14,7056.69%

3, 232 ?

??

$094

13,1098.13%

???

?

$199

$1,699 ?

?

$83,61043,8447.16%1,699

$77,915

36,112

N/A

750

The Vancouver Foundation holds a number of endowment funds for the benefit

of the

university. These funds total $7,338,000 at March 31, 1999 and the portion of $5,305,000

belonging to the university is included in the university's financial statements.

In the fiscal year 1998/99 these funds generated $575,000 of income for Simon Fraser

University (1998 - $406,000) to be used for specific purposes.

Page 15

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---

SIMON FRASER UNIVERSITY

Statement

STATEMENT OF OPERATIONS and

CHANGES

FOR THE

IN

YEAR

OPERATING

ENDED MARCH

NET

31 , 1

ASSETS

999

•

•

•

Mountain

University

Community

Interests in

Corporation

WCUMBS, TRIUMF, SFUV. SFU Foundation and Burnaby

(thousands of dollars)

I

1999

1998

i.

?

The university is one of five university members of the Western Canadian

REVENUE

Universities Marine Biological Society (WCUMBS) which operates a research

Government grants and contracts

I

station at Bamfield, British Columbia. The university's operating grant to the

128,406

$ ?

148,849

Society was $160,000 (1998 - $158,000) and is recorded as an expenditure by

Government of Canada

24,394

21,265

,

the university. There is no expectation of monetary gain to the university from

Other governments

I ?

1,210

918

this venture.

Student fees - credit courses

( ?

40,938

40,222

-

-

other

non-credit courses

5,520

4,754

ii. ?

The university is one of four parties to a joint venture agreement under which

Gifts, grants and contracts

3,782

9,913

3,937

10,589

research is conducted by university faculty members at the Tr-Universities

Sale of goods and services

22,388

21,237

Meson Facility (TRIUMF) on the University of British Columbia campus and

Investment income

7,271

9,489

elsewhere. The facility and its operations are funded by federal government

Miscellaneous income

2,690

2,887

.

grants and the university makes no direct financial contribution. The accounts of

Amortization of deferred capital contributions

8,083

8,343

TRIUMF are not included in these statements. There is no expectation of

254,595

272,490

monetary gain to the university from this venture

EXPENSE

Salaries -

academic

iii. ?

The university owns 100% of the shares of SF Univentures Corporation (SFUV),

- other instruction and research

58,074

25,020

56,367

24,896

which was established to promote technology transfer to the private sector. The

support staff

8

consolidated assets of SFUV are not considered to be material and are not

Total salaries

135,982

133,618

W •

included in these financial statements

Employee benefits

22,444

22,464

iv.

?

The Simon Fraser University Foundation was established in 1987 under the

Travel

Supplies

and

and

personnel

expenses

costs

8,092

8,596

provisions of the University Foundations Act. Its main purpose is to receive,

Depreciation

18,782

18,599

manage and invest funds to further the purposes of the university. The Province

Grants to other agencies

22,185

3,028

21,963

3,279

of British Columbia through the Minister of Finance and Corporate Relations is

Equipment and facility rentals

4,243

4,405

the single shareholder. At March 31, 1999 the Foundation is holding residential

lots valued at $6,986,000 (1998 - $7,268,000) and the proceeds from the sale of

Scholarships, fellowships and bursaries

8:513

8:194

those lots will be transferred to the University. Assets and liabilities of the Simon

Contract services

3,248

3,133

Fraser University Foundation amounting to $7,581,000 (1998 - $8,485,000) and

Professional fees

5,097

4,924

$7,268,000 (1998 - $8,172,000) respectively are not included in the financial

Debt

Renovations

servicing

and

- interest

alterations

2,861

2,635

22,693

4,180

statements of the university.

Cost of goods sold

7,654

248,215

7,987

267,293

V.

?

On February 10, 1999 the Burnaby Mountain Community Corporation was

incorporated under the Company Act of the Province of British Columbia. It is a

EXCESS OF REVENUE OVER EXPENSE

6,380

5,197

'

taxable Canadian corporation and is wholly owned by Simon Fraser University.

The purpose of the Corporation is to convert up to 100 acres of university land

CHANGES IN NET ASSETS

into a village of up to 10,000 residents. Since 1995 the university has paid

Increase in specific commitments

(6,515)

(3,025)

$714,000 for surveying, rezoning, permits, engineering and environmental

Decrease (increase) in investment in capital assets

35

(2,322)

studies as well as preliminary architectural drawings on behalf of the

NET CHANGE IN OPERATING EQUITY

(100)

(150)

Corporation. These expenses are not included in the expenses of the university

but are disclosed as a receivable from the Corporation to be repaid when the

OPERATING NET ASSETS, beginning of year

(2,750)

(2,600)

Corporation becomes profitable.

OPERATING NET ASSETS, end of year

$(2,850)

$(2,750)

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---

Capital Assets

General

?

Restricted for ?

Invested in

?

Restricted for

Capital asset acquisitions are recorded on the balance sheet at cost, except donated

Operating

?

Specific

?

Capital Assets

?

Endowment

•

assets which are recorded at fair market value at the date of acquisition. Depreciation is

_________

?

Commitments

?

Principal

recorded on a straight line basis over the estimated life of the asset as per the schedule

below.

NET ASSETS,

beginning of year,

as previously stated

?

$

(2,750) $

?

48,429 $

?

78,475 $

?

74,884

Site services ?

50 years

Buildings

?

- concrete ?

50 years

Prior period adjustment (Note 16)

-

?

8,641 ?

-

?

-

-

wood frame

?

30 years

NET ASSETS,

beginning of year,

Library books

?

10 years

adjusted

(2,750) ?

57,070 ?

78,475 ?

74,884

Equipment and furnishings

?

8 years

Computing equipment

?

3 years

Leasehold improvements

?

Term of Lease

Net change in operating equity

(100) ?

- ?

-

?

-

dowment contributions

0

-

?

-

?

- ?

3,766

Works of art and collections are not amortized and include that portion of library assets

considered to have permanent value.

Capital preservation of endowment

- ?

- ?

-

2,638

Investments

Change in investment in capital assets

-

Amortization of deferred capital

Short term investments are recorded at the lower of cost or market value.

contribution

- ?

-

?

8,083 ?

-

Capital asset acquisitions

- ?

-

?

23,989

Long term investments, which consist of marketable securities and real estate, are carried

Debt repayment

Deferred contributions

-

?

- ?

1,478

- ?

-

?

(11,400) ?

-

these

at cost

assets

or, where

to the

donated,

university.

at their

Where

fair

there

market

has

value

been

at

a

the

decline

date

in

of

the

the

value

ownership

of an

transfer of

Depreciation

- ?

(22,185)

?

-

investment

realizable value.that

is not considered temporary, the investment is written down to net

Internally imposed restrictions

- ?

6,515 ?

- ?

-

CHANGE IN NET ASSETS

(100) ?

6,515 ?

(35) ?

6,404

Gains and losses on sales of these investments are recognized in the year of disposal and

are included in investment income.

NET ASSETS,

end

of

year

(2,850) $63,585 $

?

78,440 $

?

81,288

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 cost and net realizable value.

..

C.

d.

e.

1998

190,594

8,855

199,449

(150)

1,643

1,390

8,343

17,383

7,498

(8,939)

(21,963)

3,025

8,230

207,679

Statement 3

Endowment donations are recognized as a direct increase in endowment principal. The

0 ?

0

university has a policy to protect the economic value of the endowments whereby a portion

?

S

I

M

ON FRA

SER

U

NI

VERS

ITY

of

principal.

the income

?

earned on endowments is recorded as a direct increase in endowment

?

STATEMENT

FOR THE

OF

YEAR

CHANGES

ENDED MARCH

IN

31,

NET

1999

ASSETS

Gifts-in-kind are recorded at fair market value on the date of their donation or at nominal

?

(thousands of dollars)

value when the fair market value cannot be reasonably determined.

Page 13

Page 10

---

1999 ?

1998

$ ?

6,380 ?

$ ?

5,197

22,185

21,963

7,070

5,979

(5,294)

(2,810)

(8,083)

(8,343)

5,309

13,292

6,404

3,033

33,971

38,311

OPERATING ACTIVITIES

Excess of revenue over expense

Add (deduct)

Depreciation

Net decrease in non-cash current assets

Net decrease in accounts payable and accrued liabilities

Amortization of deferred capital contributions

Increase in deferred contributions

Endowment contributions

CASH PROVIDED BY OPERATING ACTIVITIES

INVESTING ACTIVITIES

Net increase in long term investments

Capital asset acquisitions

CASH USED IN INVESTING ACTIVITIES

FINANCING ACTIVITIES

Debt principal repayments

CASH PROVIDED USED IN FINANCING ACTIVITIES

NET DECREASE IN CASH AND SHORT TERM INVESTMENTS

CASH AND SHORT TERM INVESTMENTS, beginning of year

CASH AND SHORT TERM INVESTMENTS, end of year

(13,088)

(23,989)

(37,077)

(1,478)

(1,478)

(4,584)

18,018

$

?

13,434

Statement 4

SIMON FRASER UNIVERSITY

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED MARCH 31, 1999

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.

2.

Summary of Significant Accounting Policies and Reporting Practices

a. ?

Accounting Method

..

SIMON FRASER UNIVERSITY

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED MARCH 31, 1999

?

(thousands of dollars)

?

(29,238) ?

The financial statements are prepared on a non-fund basis as the operations for the entire

?

(17,383) ?

university have been combined for reporting purposes. The university follows the accrual

?

(46 621) ?

basis of accounting. Unrestricted revenue is recorded when receivable and expenditures

are recorded when goods or services are received.

b.

?

Revenue Recognition

?

(7,498)

?

Operating grants are recognized n

i

the period when receivable. Operating grants received

?

?

(7,498) ?

for a future period are deferred until that future period and are reflected as deferred

contributions.

(15,808)

Amounts received for tuition fees and sales of goods and services are recognized as

?

33,826 ?

revenue at the time the goods are delivered or the services are provided. Otherwise, these

$ ?

18,018 ?

amounts are classified as unearned revenue in accounts payable.

Externally restricted contributions for 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. Externally restricted amounts can only be used for purposes

designated by the contributors.

Externally restricted capital contributions are recorded as deferred contributions until the

amount is invested to acquire capital assets. Amounts invested representing externally

funded capital assets are then transferred to unamortized deferred capital contributions.

Capital contributions are deferred and amortized to revenue over the life of the related

asset.

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