FY06 Washburn University Audit Results

Statement of Revenues, Expenses and Changes in Net Assets

Operating revenues at Washburn University are not keeping pace with the operating expenditures. The increase in net nonoperating revenues falls short of keeping up with the operating revenue shortfall. WU's combined FY06 net operating results - "Income Before Other Revenues" - decreased more than $700,000 from FY05, although it was still $500,000 higher than in FY04. The increase in investment income more than offset the decline in sales tax revenues.

Net Assets

Washburn University administrators sing their own praises about how well they manage university funds. When asked if the university is better off this year than last, the response is affirmative, based upon the increase in net assets.

However, further analysis of the increase in net assets indicates that Board members should seek further explanation for some of the specific changes in net assets over the past two years.

Unrestricted net assets, the university's savings account for operations, has decreased $9.7 million, a 46.4% decline in just two years. At this rate, the university can only afford two more years of Jerry Farley's aggressive spending.

The largest increase in net assets is from the $14 million investment in capital projects. While some of this investment is long past due, the extent of the Farley's building project campaign is adversely impacting the university's ability to withstand future economic downturns.

Last, but not least, is the significant increase of $1.7 million in reserves due to the high insurance premiums charged to the faculty and staff for health care coverage. Each year the administration assures Board members that the reserve funds are at the appropriate level, while this "appropriate level" continues to skyrocket.

General Fund - Comparison of Actual to Budget

The audit includes a report that compares actual results to the general fund budget. This provides a clear picture of operating results.

For example, this report shows the following:

  • $   456,165 - Sales tax revenues were under collected in the current year.
  • $   544,645 - Sales tax revenues from previous years were transferred to the operating fund to make up for the FY06 shortfall.
  • $5,510,150 - Monies transferred to other funds to reduce the net operating results.
  • $2,257,989 - Transfer amount in excess of budgeted amount.