12/11/2014
Public Cash Flow
Statements
2014-2015
NACUBO Intermediate Accounting
Learning Objectives
• Identify the GAAP guidance for the
preparation of the cash flow
statement
• List the components of the statement
• Describe the items included in each
component of the statement
• Assemble the information necessary
to prepare the cash flow statement
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12/11/2014
GAAP Basis
• GASB No. 9 required SCF for gov’t
proprietary funds
• GASB No. 34 modified GASB No. 9
to require direct method and
reconciliation (more on this later)
Cash Flow Information
• Identifies the ability to meet
obligations when they are due
• Used to determine if the institution
needs external financing
• Can be used to project future cash
flows
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12/11/2014
Information Should Help Users
• determine the reasons for differences
between operating income and associated
cash receipts and disbursements
• assess the effects of the financial position
of both cash and noncash investing,
financing and capital transactions during
the fiscal year
Public C & U Concerns
• Four categories per GASB # 9
–
–
–
–
Operating activities
Noncapital financing activities
Capital financing activities
Investing activities
• Operating activities must be presented using
direct method
– Required reconciliation presents the indirect operating
activities
• Gross data no netting of ins and outs
• Significant differences from FASB model
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12/11/2014
Definition of Cash
• Cash on hand and in banks
• “Near cash” – investments with
maturities of 90 days or less
• Can exclude deposits with debt service
trustee
• Can exclude cash on hand in
investment portfolio
• Include definition in Significant
Accounting Policies note disclosures
Required Presentation Format
• Cash flows from ‘various’ activities
•
•
•
•
Operating
Noncapital financing
Capital financing
Investing
• Net increase (decrease) in cash
• + Cash and equivalents Beg of Year
• = Cash and equivalents End of Year
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12/11/2014
Statement of Cash Flows
Clemson University
CLEMSON UNIVERSITY
ST ATEMENT OF CASH FLOWS
For the year ended June 30, 2013
CASH FLOWS FROM OPERATI NG ACTI VI TI ES
Payments from custom ers
Grants and contracts
Payments to suppliers
Payments to employees
Payments for benefits
Payments to students
Inflow s from Stafford loans
Ou tflow s from Stafford loans
Loans to students
Collection of loans
Net cash used by operating activities
$369,484,462
118,731,747
‐269,707,608
‐307,858,154
‐87,096,964
‐87,096,964
65,611,886
‐6,935,064
‐18,812
986,037
‐157,670,632
CASH FLOW FROM NONCAPI TAL FI NANCI NG ACTI VI TI ES
State appropriations
Federal appropriations
Gifts and grants
Net cash flow provided by noncapital financing activities
92,784,135
9,975,718
93,040,943
195,800,796
CASH FLOW FROM CAPI TAL AND RELATED FI NANCI NG ACTI VI TI ES
Proceeds from capital debt
State capital appropriations
Capital grants and gifts received
Proceeds from sale of property
Pu rchases of capital assets
Principal payments and redem ption premiu ms on long term debt
Interest and fees
Net cash used by capital activities
16,323,216
1,960,426
20,967,752
458,216
‐84,921,048
‐12,113,075
‐6,569,199
‐63,893,712
CASH FLOWS FROM I NVESTI NG ACTI VI TI ES
Interest on investments
Proceeds from stock sales
Net cash flow s provided by investing activities
Net change in cash
Cash beginning of year
Cash end of year
3,140,262
‐138,751
3,001,511
‐22,762,037
436,749,772
$413,987,735
Reconciliation of net operating loss to net cash u sed by operating activities.
Operating income (loss)
$ (137,813,556)
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation expense
32,715,339
Change in asset and liabiliites:
Receivables net
Grants and contracts receivable
Student loans receivable
Prepaid items
Inventories
Accounts and retainages payable
Accru ed payroll and related liabilities
Accru ed compensated absences and related liabilities
Unearned revenue
Fu nds held for others
Net cash used by operating activities
‐22,820,822
‐1,055,119
‐219,419
‐706,167
‐15,471
‐23,395,421
‐2,508,688
1,906,000
2,003,260
‐5,760,568
$ (157,670,632)
NON-CASH TRANSACTIONS
Increase in fair value of investments
Capital assets acqu ired through gifts
Capital grants receivable
$6,247,496
488,429
$ 7,540,024
RECONCILIATION OF CASH AND CASH EQUIVALENT BALANCES
Current assets:
Cash and cash equ ivalents
Restricted cash and cash equivalents
Noncurrent assets
Total cash and cash equ ivalent balances
$201,781,150
179,353,660
32,852,925
$413,987,735
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Cash Flows from Operations – The
Direct Method
• Shows cash inflows by major source
(tuition, research activities, auxiliaries,
etc.
• Cash outflows by natural object
(salaries, payments to vendors, etc.)
• Required reconciliation of net income
to net cash flows from operating
activities is also required (indirect
method)
Cash Flows from Operations – The
Direct Method
• Required by GASB No. 34
• Provides more complete information to
statement reader
• Enables projections based on assumptions
• Generally rather difficult to compile because
institutional systems don’t contain required
attributes in readily extractable format
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12/11/2014
Cash Flows from Operations –
Reconciliation (Indirect Method)
• Starts with excess operating expense over
revenues
• Adjustments required to convert to the
cash basis and eliminate effect of
changes reported in the financial and
investing categories
• Also adjusts for noncash items such as
depreciation
Cash Flows from Operations –
Reconciliation (Indirect Method)
• Required by GASB No. 34
• Much easier to prepare, but obscures
information about operating cash inflow and
outflow
• Less useful to statement readers
• Cannot be used to project future cash flows
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12/11/2014
Cash Flows from Noncapital
Financing Activities
• Transactions that are neither operating, capital
financing nor investing activities
• Includes the following:
–
–
–
–
–
–
State appropriations [GASB considering change]
New endowment gifts
Annuity gift transactions inflow and outflows
Transfers to & from others
Agency transactions inflows and outflows
Noncapital debt proceeds and payments [including
interest expense]
– Direct student loan transactions
Cash Flow from Capital Financing
• Inflows include new debt proceeds,
contributions restricted to capital
acquisitions and state appropriations for
capital acquisitions
• Outflows include capital bond, mortgage
and note principal payments, capitalized
lease payment, capital debt interest
payments, capital acquisitions and capital
item sale proceeds
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12/11/2014
Cash Flows from Investing
• Includes transaction related to
traditional financial investments
• Investment portfolio transactions
must be displayed gross – purchases
should not be offset against
sales/maturities
• Interest income part of this activity
rather than operating
Cash Flows from Investing
• For purposes of this statement, short-term
investments that are not cash equivalents
are considered investments
• Institutions may wish to make the same
distinction in the Statement of Position
classification to facilitate articulation
between the statements.
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12/11/2014
Retrieve Public Worksheet Exhibits
in Handouts
ABC State University
Preparing the Cash Flow Statement
• Start with BOY and EOY comparative balance
sheet Exhibit 1
• Gather additional information as needed
Exhibits 2, 3 and 4
–
–
–
–
Gross investment purchases and sales
Gross loan activity
Increase in restricted contributions
Separate unrealized and realized investment gains
into restricted and unrestricted
– Gross plant additions and deletions
– Distribution of cash disbursements by natural class
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12/11/2014
Pr im ary
Prim ary
Year to Year
Ins titution
Ins titution
Change
FY 20X3 versus 20X4
ASSETS
Current Assets
Cas h and cas h equivalents
$
2,562,112
Short-term inves tm ents
4,571,218
15,278,981
6,026,998
6,412,520
578,060
585,874
3,333,406
4,254,341
355,882
359,175
Inventories
Depos it with bond trus tee
Notes and m ortgages receivable, net
Other as s ets
Total current as s ets
$
14,265,989
Accounts receivable, net
426,499
432,263
27,548,946
31,894,372
2,009,106
1,012,992
385,522
7,814
920,935
3,293
5,764
4,345,426
A
24,200
997,358
89,650
H
85,709
1,572,870
2,769,787
7,115,213
K
B
C
D
E
F
G
Noncurrent Assets
Res tricted cas h and cas h equivalents
Endowm ent inves tm ents
-
24,200
20,551,365
21,548,723
Notes and m ortgages receivable, net
1,945,673
2,035,323
Other long-term inves tm ents
—
—
Inves tm ents in real es tate
6,340,846
6,426,555
157,404,459
158,977,329
186,242,343
189,012,130
213,791,289
220,906,502
Capital as s ets , net (Note 1)
Total noncurrent as s ets
Total as s ets
DEFERRED OUTFLOW OF RESOURCES
TOTAL ASSETS AND DEFERRED OUTFLOW
0
0
213,791,289
220,906,502
7,115,213
65,316
287,769
83,820
436,905
I
J
L
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities
4,832,154
4,897,470
Prepaid revenue
2,782,444
3,070,213
Long-term liabilities -current portion (Note 2)
3,998,666
4,082,486
11,613,264
12,050,169
1,109,136
1,124,128
Total current liabilities
M
N
O
Noncurrent Liabilities
Depos its
Prepaid revenue
1,726,817
1,500,000
Long-term liabilities (Note 2)
30,696,346
31,611,427
Total noncurrent liabilities
33,532,299
34,235,555
45,145,563
46,285,724
Total liabilities
DEFERRED INFLOW OF RESOURCES
TOTAL LIABIITIES AND DEFERRED INFLOW
14,992 P
(226,817) Q
915,081 R
703,256
1,140,161
0
0
45,145,563
46,285,724
1,140,161
126,149,025
126,861,400
712,375
S
10,799,270
10,839,473
40,203
45,000
T
NET POSITION
Inves ted in capital as s ets , net of related debt
Res tricted for
Nonexpendable
Scholars hips and fellows hips
3,722,564
3,767,564
Scholars hips and fellows hips
Res earch
3,208,627
2,803,756
Res earch
3,117,090
5,202,732
100,109
938,571
Loans
2,323,858
2,417,101
Capital projects
3,209,425
4,952,101
Debt s ervice
2,250,046
4,254,341
239,172
403,632
13,526,540
12,180,107
U
Expendable
Ins tructional departm ent us es
Other
Unres tricted
Total net pos ition
$
168,645,726
$
174,620,778
(404,871)
2,085,642
838,462
93,243
1,742,676
2,004,295
164,460
(1,346,433)
5,975,052
V
W
X
Y
Z
AA
AB
AC
REVENUES
Operating Revenues
Student tuition and fees (net of s cholars hip allowances
of $3,214,454)
$
Patient s ervices (net of cha
36,913,194
CA
$
—
Federal grants and contrac
—
46,296,957
10,614,660
CB
—
State and local grants and
3,036,953
CC
Nongovernmental grants a
873,740
CD
Sales and s ervices of educ
19,802
CE
7,475,987
—
Res idential life (net of sch
28,079,274
CF
—
Books tore (net of s cholars
9,092,363
CG
—
143,357
CH
—
Auxiliary enterpris es :
Other operating revenues
Total operating reven
421,571
88,773,343
54,194,515
EXPENSES
Operating Expenses
Salaries :
Faculty (phys icians for th
34,829,499
Exem pt s taff
29,597,676
CJ
5,913,762
CK
Nonexem pt wages
Benefits
18,486,559
Scholars hips and fellowsh
3,809,374
CI
16,703,805
8,209,882
2,065,267
CL
7,752,067
CM
—
Utilities
16,463,492
CN
9,121,352
Supplies and other s ervice
12,451,064
CO
7,342,009
6,847,377
BB
Depreciation
Total operating expen
2,976,212
128,398,803
Operating incom e
54,170,594
(39,625,460) BA
23,921
NONOPERATING REVENUES (EXPENSES)
State appropriations
39,760,508
Gifts
1,822,442
BC
—
BD
—
Inves tment incom e (net of inves tment expens e of $87,316 for
the primary institution and
2,182,921
Interes t on capital as s et–re
BE
495,594
(1,330,126) BF
Other nonoperating revenu
313,001
Net nonoperating rev
42,748,746
Income before othe
(34,538)
BG
321,449
782,505
3,123,286
Capital appropriations
2,075,750
Capital grants and gifts
Additions to perm anent end
Total other revenue
806,426
BH
690,813
BI
85,203
BJ
—
711,619
—
2,851,766
Increase in net a
711,619
5,975,052
1,518,045
168,645,726
45,900,375
NET POSITION
Net position—beginning of
Net position—end of year
$
174,620,778
$
47,418,420
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ABC State University
Footnote 2
Long-term Liabilities
EXHIBIT 3
Primary Institution
Beginning
Ending
Balance
Additions
Reductions
Balance
Leases and bonds
Lease obligations
$3,005,108
$523,597
$770,908
$2,757,797
General obligations
18,518,268
1,519,740
1,147,100
18,890,908
9,732,058
2,605,260
1,870,094
10,467,224
4,648,597 FN3
3,788,102 FN4
32,115,929
Revenue bonds
Total loase and bond
obligations
31,255,434
Other liabilities
Compensated absences
Total other liab.
Total long-term oblig.
3,439,578
516,712
378,306
3,439,578
516,712 FN1
378,306 FN2
$34,695,012
$5,165,309
$4,166,408
3,577,984
3,577,984
$35,693,913
Footnote 1 Capital Assets Disclosure
Land
$0
$0
6,050,831
319,969
100,423
6,270,377
108,329,014
$13,308,014
2,955,506
0
111,284,520
Furniture, etc.
47,908,549
2,787,103
2,449,486
48,246,166
Library materials
39,209,554
1,857,669
448,471
40,618,752
2,350,000
500,000
0
Infrastructure
Buildings
Capitalized collections
Total
217,155,962
8,420,247 FN5
2,998,380 FN6
$13,308,014
2,850,000
222,577,829
Less accumulated depreciation
Infrastructure
1,742,352
90,200
100,423
1,732,129
Buildings
25,950,833
2,238,429
0
28,189,262
Furniture, etc.
17,299,215
2,501,483
2,449,486
17,351,212
Library materials
13,584,103
1,874,765
448,471
15,010,397
1,175,000
142,500
0
Capitalized collections
Total
Capital Assets, net
59,751,503
$157,404,459
6,847,377 BB
2,998,380 FN7
$1,572,870
$0
1,317,500
63,600,500
$158,977,329
ABC State University
Analysis of Receivables, Payables and Other Items
Prior Year
EXHIBIT 4
Current Year
Accounts Receivable
Tuition and fees
$1,540,670 DA
Auxiliary services - RH
1,702,662 DB1
Auxiliary services - BS
216,750 DB2
$1,639,220 EA
(98,550)
1,614,347 EB
88,315
169,020 EB2
47,730
Contracts and grants
2,535,825 DC
2,973,487 EC
Unrestricted pledges
20,610 DD
15,465 ED
5,145
Sales and service
10,481 DE
981 EE
9,500
Total
$6,026,998
$6,412,520
$1,846,170 DF
$1,978,758 EF
(437,662)
1
2
3
4
5
6
Accounts Payable
Salaries and wages
Benefits
Utilities
Supplies
788,118 EG
1,279,220 EH
(53,061)
851,374 EI
55,616
906,990 DI
Total
(132,588)
852,835 DG
1,226,159 DH
$4,832,154
64,717
7
8
9
10
$4,897,470
Prepaid Revenue
Current
Tuition and fees
Auxiliary - RH
Grants and Contracts
639,321 DJ
793,273 EJ
1,618,123 DK
1,526,940 EK
525,000 DL
Total
750,000 EL
$2,782,444
11
12
(225,000) 13
(153,952)
91,183
$3,070,213
Noncurrent
Auxiliary - RH
926,817 DM
700,000 EM
226,817
Gifts
800,000 DN
800,000 EN
0
Total
Investments
Purchases
Sales and maturities
Notes and Mortgages
New loans
$1,726,817
Short-term
$1,500,000
Endowment
$54,580,170 DO
$9,375,450 EO
$53,567,178 DP
Short-term
$8,378,092 EP
Long-term
34,750 DQ
Interest revenue
Payments received
14
15
375,480 EQ
245,710 ER
31,457 DS
40,120 ES
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12/11/2014
Preparing the Cash Flow Statement
• Categorize each of the above amounts
into the appropriate Cash Flow categories
• Complete the Statement of Cash Flows
• Exhibit 5
– Note this exhibit adds to the left
Cash Flow s f rom Operating Activities
Tuition and f ees
Research grants and contracts
$36,968,596
14,312,691
36,913,194
CA
10,614,660
CB
(98,550)
3,036,953
Payments to suppliers
(12,514,494)
(12,451,064) CO
Payments f or utilities
(16,410,431)
(16,463,492)
Payments to employees
(70,208,349)
(34,829,499)
CI
(29,597,676)
Payments f or benef its
(18,412,870)
(18,486,559)
CL
(64,717)
(34,750) DQ
(375,480)
Payments f or scholarships and f ellow ships
Loans issued to students and employees
Collection of loans to students and employees
CN
1
153,952
11
CC
873,740
CD
(55,616)
10
53,061
9
CJ
8
(7,814)
(5,913,762)
516,712
(437,662)
4
132,588
7
225,000
13
14,992
P
D
CK
FN1 (378,306) FN2
(3,809,374) CM
(410,230)
317,287
31,457
27,864,581
9,140,093
29,302
142,738
EQ
DS
40,120
ES
245,710
28,079,274
CF
88,315
9,092,363
CG
47,730
3
19,802
CE
9,500
6
143,357
CH
5,145
5
1,822,442
BD
313,001
4,648,597
FN3
ER
2
(91,183) 12
Auxiliary enterprise charges
Resident halls
Bookstore
Sales and service of educational
Other receipts (payments)
Net cash provided (used) by operating activities
0
15
(226,817) 14
(5,764)
G
(32,990,460)
Cash Flow s f rom Noncapital Financing Activities
State appropriations
Gif ts and grants f or other than capital purposes;
Private gif ts f or endow ment purposes
Net cash provided by noncapital f inancing activities
39,760,508 BC
2,135,443
BG
85,203 BJ
41,981,154
Cash Flow s f rom Financing Activities
Proceeds f rom capital debt
4,125,000
Capital appropriations
2,075,750 BH
Capital grants and gif ts received
Proceeds f rom sale of capital assets
0
Purchases of capital assets
(7,896,650)
Principal paid on capital debt and leases
(3,788,102) FN4
Interest paid on capital debt and leases
(1,330,126) BF
Deposit w ith trustee
Net cash used by f inancing activities
(523,597) lease
690,813 BI
(8,420,247) FN5
523,597
lease
(920,935) E
(7,044,250)
Cash Flow s f rom Investing Activities
Proceeds f rom sales and maturities of investments
Interest on investments
Purchase of investments
Net cash provided by investing activities
Net increase in cash
Cash - beginning of the year
Cash - end of year
61,945,270
53,567,178
DP
8,378,092
EP
(9,375,450)
EO
2,182,921 BE
(64,041,329)
(54,580,170) DO
(85,709)
K
86,862
2,033,306
2,009,106
A
24,200
H
8,483,514
$10,516,820
4,571,218
24,200
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12/11/2014
Exercise for your use
• Using the information in the Exhibits
– Trace the preparation of the Cash Flow
from Operations to the statement
– Trace the preparation of the Cash Flow
from Noncapital Financing section of
the statement
– Trace the preparation of the Cash Flow
from Financing section of the statement
– Trace the preparation of the Cash Flow
from Investing section of the statement
• Review statement details
Learning Assessment
• What are the categories in the Statement
of Cash Flow?
• What information is reported as operating
activity?
• Nonoperating activities include what cash
receipts and disbursements?
• Where are student Perkins Loan activities
reported in the Statement of Cash Flow?
• What GAAP guidance directs the
preparation of the Statement of Cash
Flow?
14
12/11/2014
Questions?
Thank you !
15