Southeast Missouri State University gets good marks on annual audit

With the exception of a few minor findings, Southeast Missouri State University has passed its annual audit.

The university's board of regents last week approved the annual financial report and accompanying audits after external auditor RubinBrown LLP offered unqualified opinions, saying Southeast followed all accounting rules appropriately and that the financial reports are an accurate representation of the institution's financial condition.

"No material weaknesses or internal deficiencies needed to be reported," said RubinBrown's Jeff Winter of the audits for fiscal year 2010, which ended June 30.

"That speaks to the integrity of our controller and accounting offices," said Kathy Mangels, vice president for finance and administration.

Total assets topped $411.62 million, up about $8.1 million from fiscal year 2009, with total net assets of more than $281.97 million, an increase of more than $13 million from the previous year. Current assets, at $32.82 million, were down by more than $16.39 million, due in large part to a decline in investments, with cash reinvested into loans with a maturity of more than one year, according to the audit.

Revenue rose by more than $10 million in fiscal year 2010, to $172.47 million. Student tuition and fees made up 32 percent of Southeast's revenue, with 28 percent coming from state appropriations, 17 percent from grants and contracts, another 14 derived from auxiliary enterprises such as residence halls, and 8 percent from investment income and other revenue.

Student tuition and fees surpassed state appropriations as the largest source of revenue for Southeast Missouri State in fiscal year 2007, declining from 37 percent of revenue in 2002. Tougher fiscal times have made for steeper state cuts.

"The fiscal year 2011 state appropriation was reduced $2.46 million, net of the 3 percent governor's reserve from the fiscal year 2010 level," the audit said.

"Tough times are ahead in regard to all state colleges, but these still are positive results from a fiscal standpoint," Winter said of Southeast's books.

The university's operating expenses totaled $153.9 million in fiscal year 2010, up about $3.7 million from the previous year. Personal service costs -- including the bill for faculty, staff and student labor -- made up nearly 55 percent of total operating expenses.

Southeast had $129.65 million in total liabilities.

The audit does note an instance in which the university was not in compliance. Universities are required to notify the National Student Loan Data System within 45 days of a student's graduation. The audit found the university failed to properly alert the system upon the graduation of two graduate students, and did not do so for an undergraduate with a "hold" placed on her status. Another finding involved the proper reporting of flexible spending accounts, according to the external auditor.

"Just because there's a finding doesn't mean we issue an adverse opinion," Winter said. "It's still a clean opinion in regard to compliance" of the university's financial statements.

mkittle@semissourian.com

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