S.04-77
0 ?
FOR INFORMATION
?
(Formerly S.04-67)
SIMON FRASER UNIVERSITY
?
MEMORANDUM
TO: ?
Senate
FROM: ?
Alison Watt
Director, University Secretariat
DATE: ?
September 16, 2004
SUBJECT:
Annual Financial Statements
Section 32 of the University Act states: "The board must make an annual report of its
transactions to the minister, in which it must 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."
NOTE:
IF YOU DO NOT WISH TO KEEP THE ANNUAL FINANCIAL STATEMENT, PLEASE?
RETURN IT TO BOBBIE GRANT, OFFICE OF STUDENT SERVICES/REGISTRAR
9
S.
. .
SIMON FRASER UNIVERSITY
Back to top
FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2004
.
?
SIMON FRASER UNIVERSITY
FINANCIAL STATEMENTS
MARCH 31, 2004
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TABLE OF CONTENTS
Page
1.
Statement of Management Responsibility
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1
2.
Report of the Vice-President Finance & Administration
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2
3.
Report of the Auditor General of British Columbia
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6
S
?
4. Audited Statements
- Statement of Financial Position
?
7
-
Statement
of Operations and Changes in Operating Net Assets
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8
-
Statement
of Changes in Net Assets
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9
- Statement of Cash Flows
?
10
5. Notes to the Financial Statements
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0
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11
0 [1
STATEMENT OF MANAGEMENT RESPONSIBILITY
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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, 2004 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, 2004 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.
Michael Stevenson
?
Pat Hibbitts
President ?
Vice President
Finance & Administration
. .
Page 1
2003
(000)
$3.368
3,288?
80 ?
S3.368
$ (55)
126
S__181
5,962
5,174
3,838
250,056
- 169,041
7,356
11,768
5,517
c 74
250,056
160,296
85,622
5,174
3,910
34,411
289,413
181,519
7,320
12,662
5,531
82,381
289,413
7,092
4,206
34,411
30V'67
169,962
7,401
1 2,000
5,495
61,501
256,359
157,346
61,813
5,243
4,492
27,182
256,076
155,791
6,822
7,491
5,062
46,499
221,665
C.
..Related Entities that are not consolidated
SFU FOUNDATION
?
S.
The Simon Fraser University Foundation was established in 1987 under the provisions of the
University Foundations Act. Its main purpose is to receive, manage and invest funds to further the
purposes of the University. The Province of British Columbia through the Minister of Finance is the
single shareholder. Included in total assets in 2003 were certain residential lots held for investment
purposes. The Foundation sold all of the remaining residential lots during the current year.
REPORT OF THE VICE-PRESIDENT FINANCE AND ADMINISTRATION
The university prepares its annual financial statements according to generally accepted accounting
principles for not-for-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 financial information for the operating fund and additional information on the other
funds in the following pages.
Actual
Operating fund (000's)
?
2002103
SFU FOUNDATION
Financial Position
Total Assets
Total Liabilities
Fund Balance
Results of Operation
Total (Loss) Revenue
Total Disbursements
Deficiency of Revenue over Expenses
S
•
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
SFU Community Trust.
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.
SF UNIVENTURES 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
are not considered to be material and are not included in these financial statements.
d.
e.
SFU COMMUNITY CORPORATION
Revenue
Government Grants
Student fees
Investment income
Other income
Prior year appropriations
Total revenue
Expenses
Salaries & benefits
Library acquisitions
Student financial assistance
Utilities and janitorials
Other non-salary
Total
Cumulative appropriations
Summary
?
ns
Carryovers: Departmental
AuxilIaries and Special projects
Research and other contracts
Specific Provisions
Non-recurring expenditures
Total
?
18,2
?
11,679
?
1,3
?
2,246
?
122
?
9,600
2,319
34,411
45,31
?
34,411
17.
Comparatives
Certain comparative figures have been restated to conform with the current years presentation
including an adjustment of $4,554,000 from internally restricted reserves to employee future
benefits liability.
The
previously
effect
reported.
of this is to reduce the 2003 closing net asset balance by $4,554,000 for amounts
5
This statement reflects the format of the
2003/2004
operating budget, approved by the Board
of Governors in May
2003.
It groups expenses in a different format than the audited statements.
The summary of the appropriations of
$45,318
at March
31, 2004
has been extracted
from note
9
to the financial statements.
• ?
* includes prior year appropriations, transfers to operating and transfers within operating.
Page 21
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Page 2
Page 3
16. ?
Related Entities that are not consolidated
S0
a.
Simon Fraser University is a member along with the University of Alberta, the University of British
Columbia, the University
.
of Victoria and Carleton University in a joint venture called the Tr-
Universities Meson Facility (TRIUMF) located on the UBC campus. TRIUMF is Canada's
National Laboratory for research in Particle Physics. TRIUMF is not incorporated and each
University appoints three members to a Management Board. The facility and its operations are
funded by federal government grants and the University makes no direct financial contribution. The
land and buildings are owned by UBC.
TRIUMF
2004
2003
(000)
Financial Position
Total assets
U-9 3
$ 5.496
Total Liabilities
2,243
2,501
Fund Balances - restricted
2,701
1,890
-other
1,105
5.496
Results of Operation
Revenue
53..4:.8
62,530
5 ?
5 ?
Expenses
2.359t
61,110
Excess of Revenue
overExpenses
i
$1420
b. ?
WCUMBS
The University is one of five University members of the Western Canadian Universities Marine
Biological Society (WCUMBS) which operates a research station at Bamfield, British Columbia.
The Society is a not-for-profit organization incorporated under the Society Act of British
Columbia. The University's operating grant to the Society was $190,000 (2003 - $176,000) and
is recorded as an expenditure by the University. There is no expectation of monetary gain to the
University from this venture.
S
S
O
p eratin g
Fund
Government grants from the Province of British Columbia for 2003/04 were $9,000,000 higher
than the previous year due to the one time year-end infrastructure grant of $6,500,000. The
Government of Canada continued its contribution of $4,900,000 towards the infrastructure that
supports research activities. Tuition fees revenue increased by $23,400,000 as a result of the
30% increase in tuition rate and increase in enrollment. Non-credit revenue increased to
$6,800,000 from $5,300,000 the previous year. A 30% increase also applied to other student
fees and generated an additional $900,000 of revenue. Investment income was higher than
last year by $1,800,000 due to capital gains mainly in the bond market.
Salaries and benefits increased by 10.8% in total. Salary increases, merit increases, market
adjustments and a new retention initiative accounted for approximately 4% to 5% depending on
the group and the timing of the increase. An addition of staff and faculty for SFU Surrey and
the double the opportunity initiative accounted for the remainder. An additional $1,500,000 was
required to fund the non-pension retiree benefits. A portion of the tuition increase was allocated
to scholarships, bursaries and awards. As a result, student financial assistance increased by
$2,300,000. In the non-salary category the largest increases were in materials and supplies
$800,000 and operational expenses $2,300,000.
Ancillar
y
Enterprises
Included in Ancillary Enterprises are the Bookstore, Food Services, Residences, Parking
Operations and the Microcomputer Store. 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 $5,900,000.
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 was featured in the bookstore.
Food Services on the Burnaby campus, started a $1,000,000 renovation to the Mckenzie
Cafeteria to be completed in the Summer of 2004. A new dining hall will open in September
2004 with a mandatory meal plan for the. 500 students living in the new residences.
Residences spent over $4,000,000 in capital renovations in the last three years with an
expenditure of approximately $900,000 this year. The construction of a 300-seat dining hail
and two new residence towers with 464 student rooms and 14 hotel rooms are nearing
completion. This complex will open August 31, 2004. A third residence tower scheduled for
completion in February 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.
The parking rates increased by 5% in accordance with the recommendations outlined in the
Traffic Demand Management Study.
Page 20
.Administrative/Union Pension 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.
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 2004 were $6,829,000 (2003 - $6,402,000).
d. ?
The valuation is based on the 1983 Group Annuity Mortality Table using an investment rate
of return of 6.75% and an inflation rate of 2.5%.
Pension Plan for Certain Members
This plan covers seven members of the faculty and staff for whom contributions were paid to the
Teachers Insurance and Annuity Association and College Retirement Equities fund in 1971, and
that have chosen to remain in the defined contribution plan. University contributions were $95,900
in 2004 ($122,773 in 2003).
Financial Instruments
The University's financial instruments consist of cash and short '
term investments, accounts
40
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.
Pledges
Pledges made by donors to the University for donations to be received in future years are
estimated at $12,300,000 (2003 - $11,144,000). Pledges are not recorded in the financial
statements until the related donations are received by the University.
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.
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.I.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.
0
Ancillary Enterprises
The Microcomputer Store continues to offer an increased level of customer service to SFU by
offering on-site consultation, loaning equipment, and providing a more interactive environment
for the campus community. During the year the store negotiated significant savings for SFU for
anti-virus software and Microsoft Office. During the year the Microcomputer store continued to
manage Microsoft Office, and many other software applications used by the University. It
negotiated significant savings on Adobe, BenQ LCD & manages the Dell RPF for the campus.
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 $11 million comes from private sector corporations and
from non-profit organizations. There are over 1,500 active research accounts with total activity
of over $46 million compared to $43 million the previous year. The Canada Foundation for
Innovation awarded $5.4 million for infrastructure under several categories and $8.8 million was
received from the Province of BC's Knowledge Development Fund as matching funds. The
Federal government's Canada Research Chair program awarded $2.5 million for salaries and
research purposes.
Endowment
The University's endowment consists of restricted donations to the University and internal
•
allocations,
income generated
the principal
from
of
endowments
which is required
can be
to
spent
be maintained
only in accordance
in perpetuity.
with
The
the
investment
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 tong
term.
This fund received $2,665,000 in new donations during the year and $2,434,000 of interest
income and other transfers was capitalized in order to protect the economic value of the
endowments. The fund stands at $102,201,000 at the end of the fiscal year.
Sp
ecific 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; the Canadian International Development Agency funds
projects in China and Mexico. Field Schools funded by participants were held in Fiji, Prague,
France and Greece. The Faculty of Education also has a number of smaller international
initiatives in Jamaica and Japan.
Page 4
12.
13.
14.
15.
Page 19
.S
p ecific Purpose
10. ?
Endowment
S S
r;
:
2i1
2003
(000)1
(000)
The Canadian Institute of Health Research approved funding of $4,461,000 for hosting the
Institute of Nutrition, Metabolism and Diabetes.
?
At March 31, 2004 a total of $3,461,000 had
Balance, beginning of year
F•
?
97.1021
$93,873
been
received.
Donations
2,665
2,524
Capitalized income and other transfers
I
705
Capital
Balance, end of year
SiC2.201j
S97.102
In June 2003 the University issued a 5.613% senior unsecured debenture in the amount of
$150,000,000 which will mature in 2043. The capital raised with the debenture will be used to
fund a variety of capital projects, including the student residence expansion, The Segal
Graduate School of Business, refinancing existing debt, and other suitable capital
requirements.
Major capital activity funded by the Province included:
The purchase of 326,125 sq. ft. of space in the Surrey Central City building for $35,692,000 for
the SFU Surrey Campus. The authority to spend an additional $34,071,000 was approved by
the Province to develop the space.
$1,848,000 for the planning and design phase on the Technical and Applied Science Complex
(TASC 1).
$5,967,000 for maintenance and minor renovations.
Other capital expenditures funded from the bond fund and other resources included:
?
5
$17,504,000 for student residences and dining hall.
$4520,000 for the Interdisciplinary Research in the Mathematical and Computational Sciences
(IRMACS.
$2,380,000 for renovations to the Segal Graduate School of Business.
$1,374,000 for relamping parts of the campus, designed to make significant improvements in
energy efficiency.
$1,012,000 of leasehold improvements for an additional 27,000 sq. ft. of space leased on the
third floor of the Harbour Centre Campus.
In connection with the Chief Dan George Centre for Advanced Education, 8,799 sq. ft. of space
in Cathedral Place on Hornby Street was leased from the City of Vancouver at a nominal cost.
Endowment consists of restricted donations to the University. The investment income generated
from endowments must be used in accordance with the various purposes established by the donors
or the Board of Governors. Donors as well as University policy stipulate that the economic value of
the endowments must be protected by limiting the amount of income that may be expended, and
reinvesting unexpended income. Included in the $102,201,000 (2003 -.$97,102,000) is a
receivable of $2,777,000 (2003 - $3,149,000) from the SFU Foundation for proceeds from the last
lots sold during the year.
11. ?
Pension Plans
The assets and liabilities of both Plans are not reflected in the University's financial statements.
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 2004 were $6,911,000
(2003 - $6,309,000).
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, 2000 shows an
actuarial liability of $8,712,000 against the actuarial value of assets of $9,181,000 resulting in a
surplus of $469,000 in the fund, which is not being amortized. There were no contributions
required for 2003 nor 2002 due to the surplus.
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%.
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. Employees
do not contribute to the Plan.
Page 5 ?
is ?
is
Page 18
.
Report of the Auditor General
?
of British Columbia
f^&N
4 W
To the Members of the Board of Governors
of Simon Fraser University, and
To the Minister ofAdvanced Education,
Province of British Columbia:
2003
(000)
•
$11,679
2,246
9,600
2,694
8,192
34,411
4,523
9,280
9,187
16,612
533
$74.546
9. ?
Restricted for Specific Commitments
General Operating
Carryovers - faculties & departments
Auxiliaries and special projects
Research and other grants
Specific provisions
Non-recurring expenditures
Total General Operating
Ancillary enterprises
Capital
Specific purpose
Long-term commitments
Lease commitment
Self insurance
Total Restricted for Specific Commitments
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
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 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. The current year deficit reflectsS
?
S
financing to be recovered from future years' operations.
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.
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 increasing to $1,648,000 over the
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.
•5
I have audited the statement of financial position of
Simon Fraser University
as at
March 31, 2004 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 Canadian 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, 2004 and the results of its operations and its
cash flows for the year then ended in accordance with Canadian generally accepted accounting
principles.
"nit 4at#
Victoria, British Columbia
?
Wayne Strelioff, FCA
May 20, 2004
?
Auditor General
Page 17
Page 6
is
•8.
$ ?
18,118
12,882
31,000
24,614
12,198
34,462
190,571
292,845
(16,928)
74,546
127,241
97,102
281,961
$574,806
Statement
I
2003 ?
.
S
$ ?
18,595
12,532
1,787
1,269
34,183
199,666 ?
340,768
?
189
$ 798,222 ?
$ 574,806
SIMON FRASER UNIVERSITY
?
STATEMENT OF FINANCIAL POSITION
AS
AT MARCH
31, 2004
?
(thousands of dollars)
ASSETS
CURRENT ASSETS
Cash and short-term investments (Note 3)
Accounts receivable
Inventories
Prepaid expenses
Investments (Note
4)
Capital assets (Note 5)
Unamortized debt discount and issue costs
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES
Accounts payable and accrued liabilities
Current portion of long term debt (Note 6)
Employee future benefits (Note
7)
Long-term debt (Note 6)
Deferred contributions (Note 8)
Deferred contributions related to capital assets (Note 8)
NET ASSETS
Operating
Restricted for specific commitments (Note
9)
Invested in capital assets
Endowment (Note 10)
The accompanying notes are an integral part of these financial statements
Early Retirement
The early retirement amount represents current and future pension payments to employees that
took early retirement in the mid eighties and other employees that receive supplementary pensions.
The actuarial liability at December 31, 2003 is $4,678,000 and is fully funded.
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 $17,609,000 (2003 -$15,085,000). At March 31, 2004
an amount of $4,790,000 has been set aside internally 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,
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.
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.
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:
Capital
2004
2003
Total
Total
(000) ?
(000)
(000)
$190,571
$225,033
$215,740
127,200
74,464
40003
8,453
222,121.
84,103
£268.130
65,171
$225.033
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 $222,121,000 of deferred capital contribution represents the
unamortized portion of restrictecI capital advances relating to assets which were purchased with
restricted contributions.
Sponsored ?
Specific
Rearch
?
Purpose
(0,00)
my
(000)
Balance beginning of
?
II
the year
Add: Contributions
received during the year
?
34,362
?
Less: Transferred
to revenue
?
29.39 1
?
Balance end of year
E ? -
B. Louie
Chair
Board of Governors
P. Hibbitts
Vice President
Finance and Administration
.
S
Page 16
Page 7
Non-Pension?
Benefits
(000)
$15,085?
871 ?
1,572 ?
567
?
18,095 ?
486?
$17.609
Total
2003
(000)
$23,089
S
25,344?
730?
$24.6 14
Statement 2
...
Debentures,
Long Term
issued
Debt
?
to the Province of British Columbia pursuant to the Financial Administrative Act,
5
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)
2005
?
$11,487
2006
?
$11,768
2007
?
$11,077
2008
?
$11,077
2009
?
$13,487
7.
?
Employee Future Benefits
?
Group
?
Early?
Insurance Retirement
?
(000)
?
(000)
Opening Balance
?
$4,975?
Current Costs
Interest on benefit obligation
?
354
?
391
Amortization of Net?
Actuarial Loss
?
4,908
?
5,366
Disbursements
?
402
?
$4.908
?
$4.964?
GrouD Insurance
Group insurance is designated for potential requirements related to self-insured long-term disability
plans. Annual premiums are funded from the general operating funds on a cost of claim plus fee
for services basis.
a
The last actuarial valuation at March 31, 2003 for the self-insured long term disability plans shows a
liability of $5,073,000. There has been no material change in the number of employees on LTD
since that date.
The amount of $4,908,000 has been set aside internally to fund this liability.
SIMON FRASER
UNIVERSITY
STATEMENT OF OPERATIONS and
?
CHANGES IN OPERATING NET ASSETS
.
?
FOR
THE YEAR ENDED MARCH 31, 2004
(thousands of dollars)
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
Back to top
Total salaries
S
Employee benefits (Note 7)
Travel
and
personnel
costs
Materials and
supplies
Communications
Other operational expenses
Depreciation
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
EXCESS OF REVENUE OVER EXPENSE
CHANGES IN NET ASSETS
Increase
in specific commitments
Increase in investment
in capital assets
NET CHANGE IN OPERATING EQUITY
2003
$ 165,873
33,541
1,572
62,869
7,252
5,320
21,433
27,608
11,652
3,526
8,018
348,664
73,174
30,682
68,304
172,160
32,235
11,005
13,438
1,351
15,280
23,847
4,023
4,272
5,355
11,846
3,910
10,728
9,336
2,262
2,879
323,927
24,737
(4,232)
(21,055)
(550)?
(16,378)?
$(16,928)
.
?
S
OPERATING NET ASSETS, beginning of year,
OPERATING NET ASSETS, end of year
Page 15
Page 8
Statement 3
S
S
SIMON FRASER UNIVERSITY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 2004
(thousands of dollars)
Internally
General ?
Restricted for
?
Invested in ?
Restricted for
Operating ?
Specific ?
Capital Assets
?
Endowment
Commitments
?
Principal
2004!,
2003
NET ASSETS, beginning of year
$ ?
(16,928) $
?
74,546 ?
$ ?
127,241 ?
$ ?
97,102
$
?
281,961
$ 253,995
Net change in operating equity
(300)
?
- ?
-
(3
(600)
Endowment contributions
- ?
- ?
- ?
2,665
2,665
2,524
Capital preservation of endowment
?
- ?
-
2,434
2,434
705
5.
?
Capital Assets
tst
Accumulated ?
'. ?
2004
2003
Depreciation
Net
Net
(000)
(000)
(000)
(000)
74,814
$107140
$267,674
$201,977
21,316
9,247
12,069
12,788
23,754
8,337
15,417
15,440
11,666
' ?
4,964
6,702
7,193
24
1
527
•6;979
17,548
14,212
58,508
20,090
38,418
36,049
60,242
23,632
36, 19&
34,437
6.275
4,836
13,836
-
13.836
13.836
94.938
IL
$180.389
5414.549
$340.768
Space in the Central City complex for the Surrey campus, purchased in March 2004, is. included in
buildings. The 429 acres of land in Burnaby is recorded in the financial statements at its 1965
assessed value of $572,000. 78 acres of this land is set aside for development by the SFU
Community Trust. The Centre for Dialogue land is recorded at its 1998 asessed value of
$1,148,000 and the Segal Graduate School of Business land is recorded at its 2002 assessed
value of $3,669,000. Beneficial interest in land held under an educational joint venture agreement
is held by the Great Northern Way Campus Trust.
Buildings - concrete
- wood
Site services
Leasehold improvements
Computing equipment
Equipment & furnishings
Library books
Special collections
Land
Total Capital Assets
Change in investment in capital assets
Amortization of deferred capital
contribution ?
-
-
?
8,453 ?
-
8,453
801
Capital asset acquisitions
? -
-
?
100,219 ?
-
100,219
44
5
Debt ?
-
- ?
(16,844) ?
-
(1 6,8f4)
'
4,03
Deferred contributions
?
-
(41,966)
-
(41 966)
(11,651)
Depreciation ?
-
- ?
(26,438)
-
?
(26,438) (23,847)
Internally imposed restrictions
?
108
IN
NET ASSETS ?
(192)
1,100 ?
-
1,100 ?
23,424
- ?
1,208
5,099
?
29,431
4,282
27,966
CHANGENET
ASSETS, end of year
?
$
?
(17,120) $
75,646 $
?
150,665 $
102,201 ?
P
311,392$
281,961
6. ?
Long Term Debt
S ?
r
2004 ?
2003
I
i1 ?
(000)
Demand Loans
?
$ ?
$ 3,500
Term Loans
?
.
?
.
?
5,2761
?
5,591
Mortgages ?
4,9al ?
2,440
Debentures - Senior unsecured
?
150 0001
?
-
Debentures - Province of BC unsecured
?
16,828,
L
?
21,348
?
(less Sinking Funds) ?
(8_292) ?
(7_799)
?
168,7431
? 25,080
Current Portion ?
(6,176)
? (12,882)
Total Long Term Debt
$162.561 ?
$12.198
Term loans, secured by promissory notes, bear interest rates between 2.43% and 6.54%, and are
due for renewal in December 2004 and January 2005.
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.
The University issued $150,000,000 of 5.613% Senior Unsecured Debentures in June 2004. The
S
debentures have semi-annual interest payments and mature June 10, 2043. Net
proceeds of the
issue will be used primarily to finance capital projects. The debentures are neither obligations of,
nor guaranteed by, the Province of British Columbia.
.
Page 14
Page 9
Cost
(000)
$ (324)
18,335
584
$1 8.595
2003
Market
(000)
$ (324)
18,335
584
$1 8.595
Page 13
21,571
19.274
40,845
11.708
52,553
50,633
?
12,029
?
115,215
?
5.057 ?
$1 20.272
4.8
5.4
5.1
5.8
5.2
0
2003
$ ?
24,737
23,847
4,978
(3,328)
(8,018)
17,311
3,229
1,205
63,961
(13,901)
(44,501)
(58,402)
(2,688)
(2,688)
2,871
15,724
$ ?
18,595
OPERATING ACTIVITIES
Excess of revenue over expense
Add (deduct)
Depreciation
Net (increase) decrease in non-cash current assets
Net increase (decrease) in accounts payable and accrued liab
Amortization of deferred capital contributions
Increase in deferred contributions
Endowment contributions
Increase in employees future benefits
CASH PROVIDED BY OPERATING ACTIVITIES
INVESTING ACTIVITIES
Net increase in long term investments
5 ?
Capital asset acquisitions
CASH USED IN INVESTING ACTIVITIES
FINANCING ACTIVITIES
Net proceeds from bond issue
Net debt principal repaid
CASH PROVIDED USED IN FINANCING ACTIVITIES
NET INCREASE IN CASH AND
SHORT TERM INVESTMENTS
CASH AND SHORT TERM INVESTMENTS, beginning of year
CASH AND SHORT TERM INVESTMENTS, end of year
Statement 4
3.
4.
Cash and Short Term Investments
Cash
Short term notes
Bonds maturing under one year
Total Cash and Short Term
Long Term Investments
Long term investments at fiscal year end are comprised of the following:
2003
Cost
Market
Cost
Market
(000)
:000
(000)
(000)
111,286
$115886
$120,272
$120,815
42,072
56-268
34,246
37,476
31,931
25,503
18,621
9,381
11,730
t1,730
11,656
11,656
3,631
3,934
3,752
3,410
2,555-
: '
2,095
2,555
2,065
203,205
215,419
191,102
184,803
5,305
6,871
5,305
6,073
3,765
3,765
3,259
3,259
2i22Th
$226.055J
$199.666
$194.135
The Vancouver Foundation holds a number of endowment funds for the benefit of the University.
These funds totalled $7,338,000 at March 31, 2004 and the portion of $5,305,000 belonging to the
University is included in the University's financial statements. In the fiscal year 2003/04 these
funds generated $422,418 of income (2003 - $612,135) for the University to be used for specific
purposes.
Bonds and Debentures
2003
Cost Effective
Yield
(000) ?
(%)
Segregated Assets
Government bonds
Federal
Provincial
Corporate debentures
Sub-total segregated
Pooled Bond Funds
Indexed - TDQC
Active - CIFD
Sub-total externally held
Internally managed
Total Bonds and Debenti
Bonds and debentures
Canadian equities
Foreign equities
Long term annuity
Pooled balanced fund
Donated hedge fund
Sub Total
Vancouver Foundation
Loans to SFU related entities
Total Long Term
S
SIMON FRASER UNIVERSITY
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2004
?
(thousands of dollars)
.
Page 10
1.
b.
C.
SIMON FRASER UNIVERSITY
..
.Capital
Assets
NOTES TO THE FINANCIAL STATEMENTS
Library books
?
10 years
Equipment and furnishings
?
8 years
FOR THE YEAR ENDED MARCH 31, 2004
Computing equipment
?
3 years
Leasehold improvements ?
Term of Lease
Authority and
Purpose
No depreciation is taken on works of art and collections, which include that portion of library assets
considered to have permanent value.
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
d.
Debt Discount and Issue Costs
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
Debt discount and costs related to debt issues are capitalized and amortized over the life of the
provincial government of British Columbia. The academic governance of the University is vested in
debt.
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
e.
Investments
from the Province of British Columbia.
Short term investments are recorded at the lower of cost or market value.
Summary of Significant Accounting Policies and Reporting Practices
Long term investments, which consist of marketable securities and real estate, are carried at cost
Accounting Method
or, when donated, at their fair market value at the date of the ownership transfer of these assets to
the University. When there has been a decline in the value of an investment that is not considered
The financial statements are prepared following Canadian generally accepted accounting principles
temporary, the investment is written down to net realizable value.
on a non-fund basis as the operations for the entire University have been combined for reporting
purposes.
?
The University follows the accrual basis of accounting.
?
Unrestricted revenue is
Gains and losses on sales of these investments are recognized in the year of disposal and are
Revenue
recorded when
Recognition
receivable and expenditures are recorded when goods or services are received.
0
f.
included
Inventories
in investment income.
Externally restricted contributions for purposes other than endowment or the acquisition of capital
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
assets are deferred and recognized as revenue in the year in which the related expenses are
net realizable value.
incurred. ?
Externally restricted amounts can only be used for purposes designated by the
contributors.
g.
Use of Estimates
Externally restricted capital contributions are recorded as deferred contributions until the amount is
?
The preparation of financial statements in accordance with Canadian generally accepted
invested to acquire capital assets. Amounts invested representing externally funded capital assets
?
accounting principles requires management to make estimates and assumptions that affect the
are then transferred to unamortized deferred capital contributions. Capital contributions are
?
reported amounts of assets and liabilities at the date of the financial statements, and the reported
deferred and amortized to revenue over the life of the related asset. ?
amounts of revenue and expenses during the reporting period. Actual results could differ from
management's best estimates as additional information becomes available in the future. Areas that
Gifts-in-kind are recorded at fair market value on the date of their donation or at nominal value
?
require the greatest degree of estimation include provision for doubtful accounts, depreciation
when the fair market value cannot be reasonably determined, ?
period for capital assets, and actuarial assumptions for employee future benefits.
Capital Assets
?
- ?
h. ?
Related Entities
Capital asset acquisitions are recorded on the statement of financial position at cost, except
?
The University's 25% interest in the Great Northern Way Joint Venture is recorded on a
donated assets which are recorded at fair market value at the date of acquisition. Depreciation is ?
proportionate consolidation basis. Details of other corporations and consortiums, in which Simon
recorded on a straight line basis over the estimated life of the asset as per the schedule below.
?
Fraser University may have a significant interest, are contained in Note 16. These entities are not
consolidated in these financial statements.
Site services ?
50 years
Buildings ?
- concrete ?
50 years
- wood frame
?
30 years
3.
a.
Page 11
?
Page 12
