ML20237B410
| ML20237B410 | |
| Person / Time | |
|---|---|
| Site: | 05000157, 05000097 |
| Issue date: | 06/30/1997 |
| From: | Rogers F CORNELL UNIV., ITHACA, NY |
| To: | |
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| ML20237B402 | List: |
| References | |
| NUDOCS 9808180240 | |
| Download: ML20237B410 (33) | |
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l F i N A N C I A L R E P O R T 1996 - 97 i l l l l!
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CORNELL U N I V E R S I T Y
l a eONrFND Highlights 2 Message from the Senior Vice President and Chief Financial Officer 5 University Controller's Financial Review 9 Financial Statements 14 Independent Auditor's Report 14 Notes to the Financial Statements 19 Administration 30 Board of Trustees and Trustee Fellows 31 Emeritus Trustees and Med'eal College and Graduate School of Medical Sciences Board of Overseers 32 4
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_ CORNELL UNIVER$lTY_ HIGHLIGHTS _,_ ___. _. _ _ _ , _ _ . _ _ , _ _ ,_. _ , 1986-87 1991-92 1996-97 Fall enrollment (excluding in obsentlo) Undergraduate 12,622 12,915 13,512 Graduate 4,129 4,543 4,200 1,690 1,777 1,766 Professional , Total fall enrollment 181441 19,235 38 Degrees granted Boccoloureate degrees 3,109 3,442 3,527 Masters degrees 1,251 1,345 1,458 Ph.D. degrees 446 543 519 Other doctoral degrees (J.D., M.D., D.V14.) 356 384 372 Total degrees granted 5,162 _ 5,71_4 _5,876 Tuition rates Endowed $11,500 $16,170 $20,900 Statutory Resident $ 4,650 $ 6,450 $ 8,800 Nonresident $ 8,100 $11,"50 $17,060 Medical $15,570 $19,900 $24,000 Business $12,100 $17,300 $22,450 Low $11,760 $17,000 $22,100 Veterinary medicine $ 7,700 $10,100 $13,450 Volumes in library (in thousands) 4,948 5,469 6,113 Academic workforce
. Full-time employees Faculty 2,480 2,625 2,659 Nonfoculty 730 865 891 Port time employees Faculty 94 120 132
. Nonfoculty 170 172 185 Total ocodemic workforce _ 3,474 _3282 3,867 Nonocodemic workforce Full-time employees 6,947 7,644 7,274 Port-time employees $48 581 616 -
Total nonocodemic workforce 7,495 8,225 7,890 Personnel costs (in thovsonds) ' Solaries and wages $373,547 $550,608 $661,786 Employee benefits * $ 56,857 $ 92,520 $147,172
*Does not include benefsts for employees of Statutory Colleges, which are paid dorectly by New York State.
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1986-87 1991-92 1996-97 Selected financial capital-net assets Book value of total university endowment (in millions) $ 603.1 $ 970.3 $1,796.3 Market value of total university endowment (in millions) $ 725.1 $1,078.3 $2,155.1 Unit value of Long-Term Investment Pool $ 42.30 $ 50.71 $ 83.01 Gifts received, excluding pledges (in millions) $ 149.7 $ 177.8 $ 220.6 1 . New York State appropriations through S.U.N.Y. (in millions) $ 100.8 $ 118.2 $ 126.9 Medical Physician's Organization fees (in millions) $ 90.4 $ 163.2 $ 219.5 Sponsored research volume (in millions) Direct expenditures $ 136.6 $ 165.3 $ 193.6 Indirect-cost recovery $ 43.7 $ 57.7 $ 68.5 Additions to land, buildings, and equipment (in millions) $ 137.6 $ 99.2 $ 208.9 Cost of land, buildings, and equipment (in millions) $ 929.3 $1,545.5 $2,043.2 Ratio of physical capital net investment to debt 163% 167% 259% l Outstanding bonds, mortgages, and note x2yable (i:. millions) $ 284.1 $ 476.4 $ 444.6 l l l OENERALORRAIlONS_REYINUlllH43Z DENERALOfiRAT10N53XEINSESlHh3Z l Other Sources Enterprises and 3% Subsidiaries investment Payout 4% -{- 7% Tuition and Fees Safes a Services (Ne Medical Physician's Organization Aae up rt ! ' 29% 16%
) N:
Medical Physicians' Capital Investments Organization Fees . ond Withdrawals Federal Support 20%* institutional Support Interest and Dividend [ 9% j
/ Re
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ch Consibutions Student Services 10% New York State Support 6% Public 11%** Service Private Grants and 5% Contracts 1%
'Approprianons I% ** Appropriations 10%
Grants and Contracts 19% Grants and Contracts 1% 3
MESSAGE FROM THE SENIOR VICE PRESIDENT AND CHIEF FINANOAI. OFFICER 1 l "As the following pages of the Financial Report The Cornell Campaign raised over
. for fiscal year 1996-97 will make clear, Cornell $1.5 billion, but annual giving-high as it benefits from a large amount of financial sup- is-constitutes only 10 percent of the op-port and cumulative investment. For the univer- erating budget. Of the total $1.5 billion sity in total, net assets grew by $415 million in commitments during the campaign, in fiscal year 1996-97, as revenues exceeded $1.2 billion was for the Ithaca campus and expenses for the twentieth straight year. The $300 million for the Medical College. On endowment grew, we were able to invest signifi- the Ithaca camput, this total breaks down cent resources in maintaining the physical as 50 percent for current expenditures and plant, and gifts continued to rise in support of 50 percent for endowment, trusts, and uses the university's mission and programs. While to be determined later by donors. More-total revenues have risen, some revenues that over, spread over the seven and one-half support operations, especially research and years of the campaign, the $co million government support,are flat or declining in received for current uses represents an inflation-adjusted terms. In addition, the uni- increased annuallevel of giving, but not a versity does not prosper or experience decline large windfall.
uniformly. For example, as the Statutory Col-
. In both the Endowed and Statutory Col-leges have experienced diminished state sup-leges, Cornell charges a relatively high port, the Medical College has experienced a tuition, but Cornell also provides some significant increase in clinical-patient income.
form of financial assistance to 70 percent The Financial Statements presented here show of all undergraduates and almost all doc-the institution as a whole to be financially toral graduate students. Student support sound and growing.To understand the financial from outside sources has not kept up with pressures that are causing the changes underway inflation or Cornell tuition, putting more at Cornell and at other institutions across the pressure on university resources. country requires deeper understanding of the situation and direction. Investments in buildings and gifts received To begm, each success is balanced with signs to support future building projects added that we need to be thoughtful stewards if this $56 million to the net-asset value or fund good fortune is to continue. The followmg are a balances of the university this year. These few examples: new buildings and spaces will enhance The Long Term Investment Pool (the prin' programs and provide more modern and effective facilities to Cornell students and cipalinvestment ment) had an excellentvehicle year, endmg of the wit endow hfdy a M However, each square total return on managed funds of 17.6 foot of additional space carries with it percent and a three-year average return of ongoing operation and maintenance costs.
. 19.7 percent.Yet with an enrollment of a little more than 19,000 our endowment per student remains low compared to the institutions with which we compete.
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The university initiated a new joint venture identifiable" support functions"of administra- " with Columbia University to form the tion. (Cambridge distinguished among facili-Columbia-Cornell Care, Inc. physicians ties, revenue enhancement, and support.) At group (CCC). CCC was designed to enable Cornell we believe that duplicative, undocu-the two clinical faculties to engage in mented administrative effort is disguised and managd-care contracts in the greater New dispersed around the institution in the form of - York City aret. As ongoing discussions inefficient processes and work practices of with the two hospitals-the New York many people whose principal responsibility is Hospital and the Presbyterian Hospital- not administration. Eliminating unnecessary or make clear, their merger will have pro- unneeded work and improving service is the found effects on the two medical schools focus of Project 2000, Cornell's effort at broadly and their respective faculty practices. reforming administrative practices and infor-A key component of Cornell's expense mation systems. Enabling everyone to spend growth is salaries and benefits, which comprise less time on administrative activities and more about 60 percent of all operating expenses. time on the fundamentals will strengthen the Moreover, salaries of faculty and staff members ability of our faculty and staff members to serve remain an area in which we must continue to be their constituencies. more aggressive, both to compete for the best How does one interpret a financial" surplus" people and to ensure adequate and fair rewards of $415 million? The new Financial Accounting for the thousands who make Cornell possible Standards (FAS) introduced at Cornell in 1996 through dedicated careers and years of service. show our results in a rather different fashion To achieve and maintain competitive salaries at than the older fund-accounting statements.The Cornell requires either more revenue or a FAS Board sought to make it clearer how uni-smaller total workforce. In the coming years we versities and other not-for-profits were doing. will be seeking both-additional revenue from At Cornell we have chosen to retain the distinc-new sources or increased revenue from existing tions among activities primarily affecting the sources, and ways to enable the institution to physical plant of the university; activities affect-operate more efficiently. ing the long-term investe hts and trust assets Cornell is not overstuffed in most functions. of the university; and regular, day-to-day opera-An analysis of various administrative functions tions. Analysis of the change in net assets shows l carried out by Cambridge Associates,Inc. shows that the increase breaks down as shown in the Cornell to be below its peers in the scale of table below. CHANGE'IN NET ASSMS BY CATEGORY FOR FISCAL YEAR 1996-97 l thousands of dollars percentof total General operations-unrestricted l Education and general activities ($ 662) 0% , Medical Physician's Organization 16,168 4%
- l Enterprises and subsidiaries 15,717 4%
General operations-restricted 21,005 5% Physical capital (focilities and equipment) 56,125 13% i Financial capitol (endowment and similar funds) 306,763 74% ) Total $415,116 100% 1 l Y
l For the normal programs of the Ithaca cam- Time after time, Cornell faculty and staff mem- !
- pus, the year was nearly break-even in terms of bers demonstrate their ability to create innova-l unrestricted funds. Given the many pressures tive, relevant, and excellent science; learning l facing the institution, this is a significant ac- opportunities; performances; literature; nut-i-
) complishment, but it is not a circumstance of tional insights for families; medical care; and ( , excess wealth. Restricted or designated re- economic and public policy initiatives-all with
- sources did increase, as colleges, research cen- limited resources. Cornell faculty members and
- ters, enterprise functions, and others reserved students literally span the globe in their involve-funds for future capital expenditures or received ment and interactions, gifts or advance research funding that they in- As we go forward then, the critical question tend to spend in the coming years. Few to none is, how will we maintain this diversity and of these resources are available for general shar- strength in a era in which we must contract in ing among units by the administration. Physical scale? How do we engage the entire campus in end capital assets did increase as mentioned creating the university of the future? In the end, above and explained in the statements which j we will do what we can afford, and while we '
follow. However, these assets are not available have some control over what the resources are, for direct support of the operating budget. As we have more control over what we do with the endowment increases,it is able to provide a them. One crucial question that always faces greater income stream, but the principal itselfis private universities and colleges is the trade-off generally not available to be spent. between financial aid and tuition. Cornell's Thought of as a household, we are wealthier. commitments to a diverse student body and full Ilut just as an increase in one's personal net need-blind admissions are important and diffi-worth-such as a contribution to a 401(k) re- cult goals, requiring substantial financial com-tirement plan or putting a new roof on the mitments. How we maintain these objectives in house-does not pay the bills or buy groceries, uncertain times will determine much about the neither does much of the increase in assets of future of the university. the university provide immediate relief to the President Rawlings has suggested we focus financial situation we face-operating expenses on five main a cas, which will determine our growing more rapidly than operating revenues. success in the future: Ilut the increase in assets does enable the uni-
- 1. Academic collaboration and excellence, by versity to be stronger in the future. With better which we mean that the whole must be facilities and a greater security with respect to greater than the sum ofits parts. Cornellis certain programs, the competitive strength of unique because of the particular set of the university is enhanced.
strengths and disciplines that have flour-As the pressures continue for Cornell to ished here over the years. Learning to draw adapt and change, one might ask what the true these together in new ways, to build on our nature of Cornell's weahh is, and how the uni-strengths and shared resources, we believe . . versity can be positioned for success in the fu- ! will be a key to the strength of the univer-ture. Perhaps the best interpretation is where we sity in the future. started-Cornell is remarkable less for its abso. :
. lute wealth than for what it does extremely well 2. Enhancing the student-living and -learning with the resources available to it. In fact, the environment, a part of adding value to people of Cornell are its true weahh. As Cornell every student who enrolls or attends class faculty and staff members work to enhance the at Cornell. This is an important focus to university and its programs,and adapt to enhance the classroom experience, to ex-changing circumstances while resources con- pand collaboration between researchers tract, Cornell emerges as remarkable for the and other practitioners and apprenticing students, and to enhance the living envi-divers 5ty and excellence of the programs it of-fers with the limited resources it commands. ronment on and off campus.
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- 3. Cornell's role in society, whether at the One heartening corollary of the efforts in
- local, state, national, or global level, is a Project 2000 is the growing number of similar key aspect of our future planning. Because reexaminations on the acaciemic side. During Cornell is the land-grant institution of the this past year, faculty members and deans cre- '
State of New York, we are especially focus- ated a new university-wide Department of Sta-ing our efforts on our role in the state. tistical Sciences that includes faculty members - from four different colleges. To take another 4.Becoming a best-managed university is the theme of Project 2000.This compre. example, faculty members in the departments hensive administrative retooling is under- of Human Service Studies and Consumer Eco-nomics and Housing in the College of Human way across campus, involving people in every operating unit and administrative Ecology went through a strategic-planning process that led them to reorient their curricu-department in the university. New sys. tems, streamlined procedures, and inte. lum and merge to form a new Department of Policy Analysis and Management. A new uni- ! grated data structure and access will be the keys to accomplishing this goal. Most versity-wide Office of Distance Learning is another example of rethinking the ways we go importantly we seek an increased under. about our core businesses. standing and ownership of the purpose of Cornell's ultimate strength is the people who their work and how it can be best accom. make it up-who value and support it. With the plished by everyone who is engaged in constant help of alumni and friends and with administrative support. e c ntinuing commitment of faculty and staff
- 5. Enhancing faculty and staff compensation rnembers and students, we have every expecta-will be an essential goal of the coming ti n f be,ngi a great umversity for a long time years. We have begun to address this goal to come, whatever that will come to mean m the more aggressively and plan to do so as we ev lying s ciety f the twenty-first century. At go forward. Cornell, we are convinced that success m the coming decades will be determined not by whether we" survive"a period of financial strin-gency,but by how innovative and proactive we are in adding value to the education, research, and public-service programs we offer. Investing for success is not just a nice idea,it is an essen-tial strategymme which is well underway at Cornell.
L f" m Frederick A. Rogers Senior Vice President and Chief Financial Officer l l 1 1 1
.._.....m
UNIVERSIT( CONTROLLER'S FINANCIAL REVIEW NEW1FESENTATJON1QPMAT NEW_ACCOUNIINGl.RINCIMES The accounting and reporting changes begun While Cornell's consolidated financial state-by Statement of Financial Accounting Standard ments are prepared in accordance with stan-
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(SFAS) Nos. I16 and 117, which dealt respec- dards issued by the Financial Accounting tively with charitable contributions and Standards Board (FASB), the Gnancial activities financial-statement display issues, continue of the statutory colleges and some central ad-with the issuance of the AICPA Audit and Ac- ministrative functions paid for with statutory counting Guidefor Not-For-Profit Organizations, resources are included in the State University of effective for the financial statements presented New York consolidated financial statements, this year, which are under the jurisdiction of the Govern-One change directed by the audit guide re- ment Accounting Standards Board (GASB). quired that insMutionally provided student Therefore, our financial records must continue financial assistance (not given in exchange for to support the reporting requirements of both services), which offsets gross revenue, must be the FASB and the GASB. The current GASB shown as a discount against revenue and not as format presents 6nancialinformation using the an expense. Aid in excess of the institution's traditional fund-accounting designations of actual tuition and fees is shown as an expense. current, endowment, plant, and loan funds, and To incorporate this change, $78,146,000 and does not include recordable promises to give
$74,056,000 of scholarships and fellowships, for (pledges) or depreciation expense.
1997 and 1996 respectively, have been moved to Two GASB exposure drafts " Accounting the revenue section as a reduction of tuition and Reporting for Nonexchange Transactions," and fees, and a new line has been added, labeled and " Financial Statements for Public Colleges
" Net tuition and fees " The remaining student and Universities"-have been issued and the aid, primarily for living stipends, of $8,769,000 comment periods for both ended on August 29, and $9,567,000 for 1997 and 1996, respectively, 1997. These two standards are effective for the is included in instruction expense, fiscal year ending June 30,2001.
The second change to the financial state- The GASB standard for nonexchange ments implements the requirement that shared transactions would require different expenses (operations and maintenance, depre- accounting treatment for pledges and gifts to ciation, interest expense) must be allocated to permanent endowments than that required by functions (such as instruction and research) SFAS No.116. using reasonable allocation bases. Table i1 in The GASB exposure draft," Basic Financial the notes to the Financial Statements displays Statements-and Management's Discussion and the allocation of shared expenses to functional Analysis-for Public Colleges and Universities" categories. requires two sets of financial statements and a Also, now that two years of data are available management discussion and analysis. The man-in the SFAS No.117 format, comparative figures agement discussion and analysis would be an for fiscal year 1995-96 are included in the Fi- audited narrative and/or graphical analysis of nancial Statements to provide additional infor- the institution's financial performance for the mation. Certain prior-year balances have been year and its financial position at year-end. The reclassified to conform to the current year's first set of required statements has an entity-presentation. wide perspective,(i.e., not in fund-accounting terms),which uses the accrual basis of account-ing and focuses on measuring economic re-sourc(s,in which capital assets would be capitalized and depreciated. These entity-wide statements would be in a format similar but not 9
identical to the statements required by SFAS Th.e Taxpayer Relief Act of 1997 included an No.117. The GASB exposure draft requires a array of education incentives that will help I second set of statements that follow a fund- many Cornell students and their families defray l accounting format. In this format, purchases the cost of higher education through credits, of capital assets would be shown as expendi- deductions, and special mechanisms for saving tures, and depreciation expense would not be for education. We anticipate significant admin-included. istrative costs associated with these incentives For Cornell, issuance of the two GASB stan- because it appears that the Internal Revenue . dards as currently proposed would require com- Service will require colleges and universities , pilation of the university's financial data using to gather and report information to monitor three different methods: the SFAS No. I17 re- eligibility. . Cornell and the educational community quirements; and the two GASB presentation , formats. We will continue to work with our campaigned vigorously to reinstate employer-independent auditors and industry representa- provided graduate education as a tax-exempt tives to modify the GASB standards in ways that benefit, but unfortunately the provision failed will both decrease the administrative burden to be reenacted. Congress did respond favorably and improve the comparability of financial to the efforts of the educational community by statements for higher-education institutions. removing the $150 million cap on tax-exempt borrowing.
#' '"""nues to utilize the coordinated 00YERNMENLR50VMTl0NS exam approach, m. which their experts audit all As noted in last year's Financial Review, the aspects of a university. Audits of this magnitude revisions of Office of Management and Budget generally take well over two years and trigger (ON1B) Circular A-21 and A-133 required sub- substantial administrative costs in addition to mission of a cost-accounting disclosure state- any taxes, interest, and penalties that might ment (Cost Accounting Standards Board For otherwise be assessed.
DS-2), and the reassignment of Cornell Univer-sity from the Office of Naval Research (ONR) to the Department of Health and Human Services OlHELCHAN055 (DHHS) as the cognizant agency for indirect- KPMG Peat Marwick was engaged this year to cost negotiation and award administration. provide independent audit services and consul-The disclosure statement was audited during tation as needed.The KPMG Peat Marwick fiscal year 1996-97 by the Defense Contractors higher-education group is recognized as one of Audit Agency (DCAA), and a report has been the leaders in the field, and we are pleased to be received approving the adequacy of that disclo- working with them. sure. The transition to the DHHS, effective The conversion to the PeopleSoft financial July 1,1997, will mean a number of changes system has begun, with planning and design. It for Cornell.The DHHS has a unique cost- is scheduled for implementation by the year reimbursement philosophy and audit approach, 2000.The financial project is one of five core and favors multiyear predetermined rates, administrative systems scheduled for conver-which are encouraged by the federal govern- sion, the others being human rescurces and ment, and which Cornell has been attempting payroll, student administration and services, to achieve. The ONR will close out the final sponsored projects administration, and alumni incurred costs for fiscal year 1995-96, and the affairs and development.The financial project DHHS will negotiate final incurred costs for includes subsegments for general ledger and fiscal year 1996-97, and their projection to chart of accounts, accounts payable, accounts predetermined rates for subsequent years. receivable, purchasing and payables, budget, treasury management, asset management, l and others. In additSn to the new software, processes are being ied to take advan-tage of the new clien. ver technology and distributed access for input and information. G
IHLYEAMiRYlEW the table," Total university endowment" of Cornell ended the fiscal year at June 30,1997 $2.16 billion is the value of Cornell's endow-with total assets of $4.39 billion, totalliabilities ment and corresponds to the numbers in the of $884 mnlion,and net assets of $3.51 billion. net-assets section of the Statement of Financial Total assets increased by $439 million over the Position,in conformance with Generally Ac-prior fiscal year, primarily because of strong cepted Accounting Principles. Purists would investment performance, an increase in contri. probably remove the $30 million of contribu-butions receivable, and additions to land, build. tions receivable to obtain the value of the uni- - ings, and equipment. Total liabilities increased versity endowment net assets actively managed. by $24 million from fiscal year 1995-96,and net In fact, the figure reported to the National Asso-assets increased by $415 million. ciation of College and University Business Of- . The largest amount of increase in the ficers for its ongoing survey of endowment university's assets was in investments, which reports from all colleges and universities will increased by $349.8 million over the prior be $2.13 billion, which is net of the $30 million fiscal year, primarily the result of excellent of contributions receivable. Total endowment investment performance. Cornell's principal assets managed by the university are investment vehicle is the Long-Term Investment $2.35 billion (cash and investments), of which Pool (LTIP). The amount invested in the LTIP $213 million are held for other entities. increased this year by $286.4 million, or Other increases in assets include a 16.4 percent. The mxht value per unit at year $34 million increase in contributions end was $83.01, an 7 rease of 59.60 or receivable, from $88 million at June 30,1996 to 13.1 percent over the prior-year unit value. $122 million at June 30,1997. These represent The total return for the year was 17.6 percent, the present value of the unconditional written compared with 22.6 percent for the prior fiscal or oral promises to donate to the university in year.The table on pages 12 and 13 shows the the future. Table 5 in the notes to the Financial value of the LTIP over the last ten years.The Statements (page 24) shows the anticipated growth over that period, from $42.30 to $83.01 payment schedule of the contributions receiv-per share, represents an annual compound rate able at June 30,1997. of 6.97 percent.This return is net of the distri- Land, buildings, and equipment increased butions from the pool, which have averaged by $40.7 million from $1.158 billion to 3.28 percent per year over the same ten-year $1.199 billion, an increase of 3.5 percent. period. Projects completed during the fiscal year in-Cornell's policy on distributions from the clude the renovation of Baker Laboratory on LTIP is based on total return rather than annual the Ithaca campus, renovations to the"S" build-cash yield. Note 2 to the Financial Statements ing and the pathology facilities at the hiedical (pages 21-24) explains this policy. In fiscal years College in New York City, and the Joan N. 1996-97 and 1995-96, the payout rates were Sanford Weill Education Center, also at the
$2.44 and $2.31 per share, respectively.These Medical College. Cc nstruction projects in rates resulted in distributions of $58.8 million Progress at June 30,1997 included the renova-and $53.7 million, for fiscal years 1996-97 and tion of Sage Hall for the Johnson Graduate 1995-96, respectively.The sources of the payout School of Management,and the newlibrary for fiscal year 1996--97 were $43.4 million in net complex for the School of Industrial and Labor investment income and $15.4 million in capital Relations. . appreciation. Equivalent amounts for fiscal year The largest component of the university's 1995-96 were $40.3 million from investment liabilities is bonds, mortgages, and notes pay-income and $13.4 million in capital apprecia- able, which totaled $445 million at June 30, . tion.The payout rate for fiscal year 1997-98 is 1997, decreasing by $10 million from the June set at $2.75 per share. 30,1996 balance. Cornell's debt has been rated Table 2 on page 21 of the notes to the Finan- AA by both Moody's Investors Services and cial Statements summarizes Cornell's endow- Standard and Poors.This rating was reviewed ment based on Generally Accepted Accounting and confirmed by both agencies during fiscal Principles. As indicated on the subtotalline of year 1995-96.
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Liabilities for" Funds held in trust for others" 13.3 percent growth in revenue for the medical and " Obligations under living trust agreements" organization is matched by a 13A percent in-each increased by $10 million over the prior crease in expenses. Both were caused by the fiscal year. These liabilities represent funds that reorganization that added primary-care physi-are invested with the university but do not be- cians to the MPO. Enterprises and subsidiaries long to Cornell. Funds held in trust for others brought in revenue at approximately the same are primarily the investments of the Center levels as in the prior fiscal year. However, they Fund, detailed in note IE of the Financial State- reduced expenses by $5.7 million and generated . ments. Obligations under living trust agree- a positive bottom line in fiscal year 1996-97. Of , ments represent the present value of the future the $21 million increase in restricted net assets, payments to the beneficiaries over the life of the most of it is a result of new contributions re- - agreement.These are explained in note IC of ceivable recorded this fiscal year. The pie charts , the Financial Statements.The increase in both on page 3 show the composition of general of these liabilities is a result of the favorable operations revenue and expc... return on all of the university's investments, Cornell continued to add to plant and equip-which,in this case, are distributed to the owners ment during fiscal year 1996-97. The year's or beneficiaries of the assets. activity resulted in gross additions of $158 mil-Information detailing the increase in net lion and deductions for depreciation and dis-assets of $415 million for fiscal year 1996-97, posals of $102 million: the difference amounts and $419 mil. n for fiscal year 1995-96, is to an increase in net assets for physical capital shown in the Statement of Activities, and is of $56 million. The increase in net assets for also summarized in table 1 of the notes to the financial capital was $307 million, primarily the Financial Statements (page 20). As mentioned result of an excellent fund-raising year and above, the format of the Statement of Activities positive investment returns. has changed slightly, causing the revenue and The university experienced an increase in expense categories for fiscal year 1995-96 to be total revenue of $36 million or 2.2 percent over restated from those previously reported, to the prior fiscal year, from $1.673 billion in fiscal make them comparable in the new format. year 1995-96 to $1.709 billion in fiscal year The change in net assets for general opera- 1996-97. Revenue from federal grants and con-tions, which aggregates the activity for the pri- tracts held steady from the prior fiscal year. mary and supporting missions of the university, Specific types of revenue that increased include was $52 million,of which $31 million came the MPO fees ($25.7 million, or 13.3 percent), from unrestricted activities, and $21 rnillion and contributions,(15.7 million, or came from restricted support.The change in 7.2 percent). As mentioned above, fiscal year net assets from unrestricted activities was gen- 1996-97 is the first year that scholarship ex-erated by the Medical Physician's Organization penses are required to be reported as a discount (MPO, formerly the Medical Faculty Practice to tuition.With this treatment, financial aid Plan), and enterprises and subsidiaries. The represents a 23 percent discount from tuition. LONG}ERM INVESTMENT POOL Source and applications (in millions) Beginning market volve j
- I Gifts and other additions '
Withdrawals Realized and unrealized gains (losses) , Ending market value . Unit value at year end (in dollars) l TJ l - . - - - - - _ _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Net tuition revenue ($265 million in fiscal year ($3.9 million, or 4.2 percent) and student ser-1996-97) is no longer Cornell's largest source of vices ($3.7 million, or 4.1 percent). Reductions revenue. Revenue from grants and contracts were achieved in expenses of enterprises and from all sponsors was $290 million in fiscal year subsidiaries,($5.7 million, or 5.7 percent) and 1996-97. Gross tuition and fees increased by $1 million each in public service and institu-5.1 percent over the prior fiscal year, and the tional support (central administration). scholarship discount increased by 5.5 percent, Turning to the statement of cash flows, the
. resulting in the increase of net tuition and fees university's cash and cash equivalents increased , revenue by 4.9 percent as compared to the prior $3 million during the year. Net cash provided by fiscal year. operating activities was $124 million and net ;
There were decreases in state appropriations cash provided by financing activities was '
, ($13.7 million, er 9.0 percent), federal appro- $104 million. llecause the goal is to be as fully priations ($973 thousand, or 5.0 percent), and invested as our activities will allow, $225 million private grants and contracts ($2.5 million, or was used by investing activities. These figures 13.2 percent). The decrease in state appropria- indicate a pattern similar to that of the prior tions can be ascribed to the completion of the fiscal year,in which $153 million was generated College of Veterinary Medicine hospital facility from operating activities, $102 million was during the prior fiscal year. State appropriations added from financing activities, and for operations were actually 1.8 percent higher $260 million was used by investing activities.
than in the prior fiscal year.The total of the In summary, fiscal year 1996-97 was a solid components of investment yield, made up of one for Cornell, primarily as a result of the interest and dividends, and realized and unreal- strong investment market and continued high ized gains on investments, also decreased by levels of private contribuuons. Two segments of
$8.2 million,or 2.3 percent. operations generated a modest surplus, and, in Expense activity was fairly " steady-state" over the performance of the primary missions of the prior fiscal year, with total expenses at instruction and research, the university broke
$1.294 billion, an increase of $40 million,or even. Physical and financial capital continued to 3.2 percent. The largest increase was in the show significant increases. These results indi-MPO, which saw expenses grow by $24 million cate that the university is managing its financial because of the addition of primary-care physi- re,ources to achieve both short-term program cians, as noted above. Setting aside these ex- needs and the long-term economic strength of penses, the remaining $16 million increase is a the institution.
1.5 percent increase over the prior fiscal year. This is the composite ofincreases in some categories and decreases in others. Increases / i 1 were reported in the costs ofinstruction Yoke San L. Reynolds ($9.6 million, or 3.2 percent), research Associate Vice president and (36.4 million, or 2.2 percent), academic support University Controller 1986-87 1987-88 1988-89 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 l
$620.5 $687.0 $674.4 $773.9 $861.5 $ 878.5 $1,027.5 $ 1,178.5 $1,213.2 $1,424.2 $ 1,748.4 22.7 28 0 36.4 31.0 46.7 61.0 56.1 50.6 59.2 77.4 64.2 0.0 ( 1.8) ( 1.2) ( 0.6) ( 12.4) ( 2.5) ( 28.2) ( 2.6) ( 8.7) ( 23.2) ( 25.9) 43.8 ( 38.8) 64.3 57.2 ( 17.3) 90.5 123.1 ( 13.3) 160.5 270.0 248.1
, $687.0 $674.4 $773.9 $861.5 $878.5 $ 1,027.5 $1,178.5 $1,213.2 $ 1,424.2 $ 1,748,4 $2,034.8
$ 42.30
$ 39.95 5 43.59
$ 46.97
$ 46.28 $ 50.71 $ 56.02 $ 55.39 $ 62.56 5 73.41 $ 83.01 13 l
FINANCIAL . _ , _ . STATEMENTS l l l l Independent Auditor's Report To the lloard of Trustees Cornell University We have audited the accompanying statement of financial position of Cornell University as of June 30,1997, and the related statements of activities and cash flows for the year then ended.
- These financial statements are the responsibility of the university's management. Our responsi-bility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those standards requin that we plan and perform the audit to obtain reasonable assurance about 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. We believe that our audit provides a reasonable basis for our opinion. , In our opinion, the 1997 financial statements referred to above present fairly,in all material respects, the fimancial position of Cornell University as of June 30,1997, and its changes in net assets and cash flows for the year then ended in conformity with generally accepted account- ,- ing principles. September 10,1997 Rochester, New York
'.T2
_ STATEMENT _OF FINANCIAL PO51T 7N A5 OF JUNE 30,1997 AND 1996 (IN THO_ USA _NDS) 1997 1996 General Operations Physical Capital Financial Capital Total Total Assets Cash and cash equivalents (note 2) $ 36,555 $ 514 $ 27,736 $ 64,805 $ 61,420
, investments (note 2) 300,343 107,146 2,325,234 2,732,723 2,382,945 Accounts receivable (note 3, Governrnent 21,902 21,902 19,696 Patients, net 47,847 47,847 43,828 l , investment income 15,598 15,598 13,862 Contributions, net 77,257 15,058 f
30,043 122,358 88,318 Other 39,748 2,639 42,387 44,614 Inventories and deferred charges 34,474 6,458 40,932 44,566 Student loans receivable (note 3C) 55,494 16,751 72,245 67,095 Land, buildings, and equipment, net of accumulated depreciation (note 5) 1,198,926 1,198,926 1,158,161 Funds held in trust by others (note 1D) 32,385 32,385 28,820 Advancas for capital investment 12,663 ( 13,012) 349 Total assets $641,881 $1,317,729 $2,432,498 $4,392,108 $3,953,325 Liabilities Accounts payable and accrued expenses $104,063 $ 199 $ 104,262 $ 101,654 Deposits and deferred revenues 35,551 35,551 33,319 Deftrred benefits (note 7) 51,013 $ 48,101 99,114 92,519 I Funds hdd in trust for others (note IE) 90,477 90,477 79,919 l Obligations under living trust ogreements (note IC) 73,937 73,937 63,783 ; Bonds, mortgoges, and notes payable (note 6) 30,626 413,967 444,593 454,947 Rxfundable government grants 35,574 35,574 33,700 Totalliabilities 256,827 414,166 212,515 883,508 859,841 ' Net Assets (note 18) Unrestricted Avoiiable for operations 225,607 225,607 192,914 Designated for student loans 5,451 5,451 6,921 Designated for plant 211,048 211,01.8 193,351 Net investment in plant 669,773 669,773 648,985 Appreciation on true endowments 882,641 882,641 721,441 Funds functioning as endowments 598,957 598,957 528,203 Tanporarily restricted Available for operations 153,996 153,996 132,991 Designated for plant 22,742 22,742 5,102 Funds functioning os endowments 27,142 27,142 14,889 Funds subject to living trust agreements 26,206 26,206 22,597
. Funds held in trust 12,525 12,525 9,816 Permoruntly restricted Student loan funds 17,872 17,872 16,916 True endowments 598,503 598,503 544,216 Funds subject to living trust agreements 20,791 20,791 20,653 Funds held in trust 35,346 35,346 34,489 Total net assets 385,054 903,563 2,219,983 3,508,600 3,093.484 Total liabilities and net assets $641,881 $1,317,729 _$2,432,498 $4,39_2,1_08 $3_,95_3,325 The accompanying notes are an integralpart of the financh statements. 1$
, STATEMENT OF ACTIVITIES._FOR THE YEAR. ENDED . lune 30,1997 (IN THOUSANDS) _ _.
(WITH SUMMARIZED COMPARATIVE FINANCIAL INFORMATION FOR THE YEAR ENDED JUNE 30,1996) General Operations Physical Capitol Temporarily Temporarily Unrestricted Restricted Unrestricted Restricted Unrestricted Revenues and other odditions Tuition and fees $ 343,388 - Scholarship allowance ( 78,146) , Net tuition and fees 265,242 131,333 $ 7,473 State oppropriotions Federal appropriations 18,220 , 255,474 2,568 Federal Grants and contracts State and local grants and contracts 16,0/6 Private grants and contracts 16,401 62,517 $ 65,334 14,258 $18,319 $ 14,279 Contributions 35,036 4,907 9,146 334 20,722 Interest and dividends 176,310 Net realized gain (loss) on investments ( 350) 4,567 294 8 529 63,300 Net unreolized gain (loss) on investments New York Hospitol reimbursement of shared costs 2,734 Medical Physician's Organization fees 219,495 Enterprises and subsidiaries 105,843 Educational departments 40,853 59 37,724 2,453) 1,607 1,171 Other sources ( 1,211,137 68,082 35,119 19,182 275,782 Total revenues 24,866 24,949 ( 24,866) Investment payout Net assets released from restrictions 49,814 ( 49,814) 3 ( 3) Capitol investments (withdrawals) ( 62,969 ) ( 22,212) 105,687 ( 1,539 ) ( 18,962) 1,222,848 21,005 140,809 17,640 231,954 Total revenues and other additions Expenses (note 8) Instruction 288,966 23,102 270,012 26,619 Research 68,680 3,476 Public service Academic support 85,172 13,703 Student services 75,080 19,454 Medical Physician's Organization 203,327 1,620 Institutional support 110,262 11,680 Enterprises and subsidiaries _ 90,126 2,670 Total expenses 1,191,625 102,324 31,223 21,005 38,485 17,640 231,954 Change in not assets 199,835 132,991 842,336 5,102 1,249,644 Total not assets, beginning of year
$ 231,058 $153,996 $880.021 $22,742 $1,481,598 Tokil net assets, end of year The accompanying notes o,e an integral part al the hnancial statements.
Financial Capital Tsrnporarily Permanently 1997 1996 Restricted Restricted Total Total
. $ 343,388 $ 326,795
, ( 78,146) ( 74,056) 265,242 252,739 136,806 152,508 18,220 19,193 258,042 258,852 16,048 15,763 16,401 18,906
$15,311 $ 45,335 235,353 219,623 20,207 4,819 95,171 94,688 7,136 3,148 186,246 178,015 535 915 70,148 87,075 2,734 2,683 219,495 193,783 105,843 105,129 40,912 39,951
( 37) 2,392 40,404 34,021 43,154 56,609 1,709,065 1,672,929 ( 24,949) 366 ( 371) 18,571 56,238 1,709,065 1,672,929 312,068 302,443 296,631 290,218 72,156 73,169 98,875 94,929 94,534 90,836 204,947 180,767 121,942 122,966 92,796 98,461 1,293,949 1,253,789 18,571 56,238 415,116 419,140 47,302 616,274 3,093,484 2,674,344 . $65,873 $672,512 $3,508,600 $3,093,484 17_
1 i l 1 l STATEMENT OF CASH FLOWS FOR THE YEARS ENDED JUNE 30,1997 AND 1996 (fN THOUSANDS) Cash flows from operating activities 1997 1996 Increase in net assets $ 415,116 $ 419,140 Adjustments to reconcile change in net assets to net cash provided by operating activities , Nonoperating items Contributions for physical and financial capital ( 107,320) ( 97,923) . Net realized gains on physical and financial capital investments ( 186,596) ( 178,015) , income restricted for financial capital investments ( 7,211 ) ( 7,158 ) Noncash items Depreciation 94,441 87,763 , Net unrealized gains ( 70,147) ( 87,075) Loss on equipment disposals 6,376 12,563 Provision for receivable allowances 15,737 6,190 Accretion of bond interest 1,790 304 Other noncash items 125 ( 13) Change in assets and liabilities Accounts and interest receivable ( 54,611 ) ( 36,158 ) Inventories and deferred charges 3,509 2,354 Accounts payable and accrued expenses 2,608 18,359 Deposits and deferred revenues 2,232 ( 947) Accrued employee benefits 6,595 12,750 Refundable government grants 1,874 1,028 Not cash provided by operating activities 124,518 153,162 Cash flows from investing activities Proceeds from the sale of investments 4,282,913 973,555 Purchase of investments ( 4,375,948) ( 1,093,927) Acquisition of land, buildings, and equipment (net) ( 126,272) ( 141,228) Student loans granted ( 12,142) ( 12,180) Student loans repaid 6,092 5,805 Change in funds held in trust for others 10,558 8,030 Net cash used by investing activities ( 224,799) ( 259,945) Cash flow from financing octivities Resources for loryterm purposes Contributions restricted to investment in true endowment 41,378 44,688 investment in physical capital 27,268 6,070 Investment subject to living trust ogreements 4,442 13,373 Income restricted for long-term investments 7,211 7,158 Contributions designated for funds functioning as endowments 25,357 28,637 j
- l Other financing activities Principal payments of bonds, mortgages, and notes payable ( 14,295) ( 146,929)
Proceeds from issuance of bonds, mortgages, and note; payable 2,151 149,903 , Change in obligations under living trust agreements 10,154 ( 628 ) , Net cash provided by Rnancing activities 103,666 102,272 Net change in cash and cash equivalents 3,385 ( 4,511 ) Cash and cash equivalents, beginning of year 61,420 65,931 Cash and cash equivalents, end of year $ 64,805 $ 61,420 1 The accompanying notes are an integral part of the isnancial statements.
NOTES TO THE FINANCIAL _ __ STATEMENTS. 1Jt0N!fKANLACCQUNIlN010LKIES or absence of donor-imposed restrictions.The categories are permanently restricted, tempo-A. Principles of Consolidation rarily restricted, and unrestricted assets. From a fiscal viewpoint, Cornell University Permanently restricted net assets include the consists of three major organizational units- historical dollar amount of gifts, including Endowed Ithaca, which includes the endowed pledges and trusts, as well as gains, all of which colleges, the central university administration, are explicitly required by donors to be perma-and the enterprise and service operations for nently retained. Pledges and trusts are reported the Ithaca campus Statutory Colleges at Ithaca; at their estimated fair values. and the Medical College at New York City. Temporarily restricted net assets include While those units operate as self-supporting gifts, pledges, trusts, income, and gains that can entities (net assets relating to one of the units be expended, but for which the use and purpose are generally not available to the other units), restrictions have not yet been met. Such restric-the only legallimitations pertain to certain tions include purpose restrictions where donors donor-restricted funds and funds of the Statu- have snecified the purpose for which the net
~
tory Colleges. Specifically, the laws establishing assets are to be spent, or time restrictions im-the Statutory Colleges at Ithaca prohibit other posed by donors or implied by the nature of the segments of the university from using funds gift (e.g., capital projects, pledges to be paid in attributab'e to those colleges. In addition to the the future, and life income funds). three major organizational units, six subsidiary Unrestricted net assets are all the remaining corporations are included in the consolidated net assets of the university, including apprecia-statements. All significant intercompany trans- tion on true endowments where the donor actions and balances are eliminated in the con- restrictions have been deemed to have been met solidated financial statements. in applying provisions of SFAS No. I16. Temporarily restricted net assets are reported B. Bcsis of Presentation as reclassifications from temporarily restricted The accompanying financial statements have t unrestricted when the donor purpose has been prepared on the accrual basis, and incor- been fulfilled or the stipulated time period has porate Statements of Financial Accounting elapsed. Standards (SFAS) No.116 ( Accounting for Con- Table I shows a summary of the balances and tributions Received and Contributions Made) changes m net assets by restriction class for the and SFAS No. I17 (Financial Statements of Not- ye rs ended June 30,1996 and 1997. For-Profit Organizations). SFAS No. I16 re. Classifymg and aggregating items with s,mi-i , ' quires that unconditional promises to give I r characteristics mto reasonably homogeneous (pledges) be recorded as receivables and rev. gr ups and separating items with differing enues within the appropriate net asset category. characteristics is a basic reporting practice that . SFAS No.117 establishes standards for general increases the usefulness of the mformation. purpose external financial statements of not- Cornell has chosen to separate financial for-profit organizations, including a statement statement activity into three primary groups; of financial position, a statement of activities, general operations, physical capital, and finan-and a statement of cash flows. SFAS No.117 c 1 c pital. requires a display based on the concept of" net General operations includes the financial assets."This standard requires presentation of ctivities and balances that are the result of net assets and its revenues, expenses, gains, and carrying on the primary and supporting mis-losses in three categories, based on the presence sions f the university. R_
Physical capital includes the activities and vested or included in the university's investment balances relatinf to the acquisition of, renewal pools in accordance with trust instruments. and replacement ef, or debt service related to Contribution revenue and the assets related to investment in the uaiversity's infrastructure, living trust agreements, net of related liabilities, Financial capital ivludes balances or activity are classified as increases in temporarily re- , related ta amounts set acide for the long-term stricted net assets or permanently restricted net economic stability of the eniversity. Table 2 assets. Liabilities associated with charitable gift shows the composition of f aancial capital net annuities and charitable remainder trusts repre- ., ' assets. sent the present value of the expected payments , The accompanying financial cratements to the beneficiaries over the term of the agree-incorporate changes as required by the AICPA ment. Pooled income funds are recognized at Audit and Accounting Guide for No*-for-Profit the net present value expected to be received at , Organizations. Specifically, institutioully pro- a future date. Gains or losses resulting from vided student financial assistance (not t,!ven in changes in actuarial assumptions and accretion exchange for services), which offsets gross rev- of the discount are recorded as increases or enue,is shown as a discount against revenui decreases in the respective net asset categories and not as an expense. Aid in excess of the in the Statement of Activities. I institution's actual tuition and fees,of approxi-mately $8,769,000 and $9,605,000 for 1997 and O. Funds Held in Trust by Others 1996, respectively,is shown as mstruction ex-1- mds held in trust by others represent re-pense. Also, shared expenses (operations and de maintenance, depreciation, mterest expense) n' s sh b ssio contml of the university,but paid and adminis-have been allocated to functional categories. . tered by outside trustees, with the university deriving ?ncome or residual interest from the C. Living Trust Agreements assets of th- funds. Funds held in trust by others The university's living trust agreements with are recognizei at the estimated fair value of the donors consist primarily of charitable gift an- assets or the pesent value of the future cash nuities, charitable remainder trusts, and pooled flows when the irrevocable trust is established income funds for which the university serves as or the university il notified ofits existence. trustee. Assets held in trust are separately in- Contribution revent es recognized for the fiscal years ended June 30,1997 and 1996,which are related to these trusts,ar $1,262,000 and TABLE 1.
SUMMARY
OF CHANGE IN NET ASSETS (IN THOUSANDS) E. Funds Held in Trust for Othtes Temporarily Perrnonently Financial capital includes funds hvested by the Unrestricted Restricted Restricted Total university as custodian for others. .'ndependent Net assets at July 1,1995 $ 1,992,085 $131,745 $550,514 $2,674,344 trustees are responsible for the fundt and for the designation ofincome distribution. .The 1996 change in net assets: Center Fund, which benefits the New York Hos-Gensral operations 12,120 35,782 0 47,902 pital-Cornell Medical Center, accounted tar Physical capital 34,983 955 0 35,938 $53,426,598 at June 30,1997. In addition, ap Financial capital 252,627 16,913 65,760 335,300 proximately $15,485,000, which represents thi , I Toto: change in net assets 299,730 53,650 65,760 419,140 present value of expected future income from The Center Fund, has been recorded in the net Net assets at June 30,1996 $2,291,815 $185,395 $616,274 $3,093,484 assets of financial capital. , 1997 change in net assets: F. Medical Physician's Organization
- Gensrol operations 31,223 21,005 0 52,228 The Medical Physician's Organization provides
' Physicalcapital 38,485 17,640 0 56,125 the . management structure for the practice of 306,763 Financial capitol 231,954 18,571 56,238 medicine in an academic medical center. Physi- j Total change in net assets 301,662 57,216 56,238 415,116 cian members generate clinical-practice income from their professional services to patients,in Nat assets at June 30,1997 $2,593.477
$242,611 gy,512 $3,508,600 addition to conducting instructional and re-7
search activities. Medical Physician's Organiza- TABLE 2. COMPOSITION OF FINANCIAL CAPITAL NET ASSETS AT JUNE 30,1997 tion fees are reflected as university revenues. (IN THOUSANDS) Expenses of the clinical practice, including phy-sician compensation, administrative operations, Restriction classification and provision for uncollectible accounts, are reflected as university expenses. Net assets re-Unrestricted e$ri t Re t7c Total sulting from the activities of the Medical
. Physician's Organization are designated for the True endowment, including respective clinical departments of the Medical contributions receivable College. of $30,043 $ 882,641 $598,503 $ 1,481,144 Functioning as endowment 598,957 $27,142 626,099 G. Collections Funds held in trust 12,525 35,346 47,871 The university's collections, which were ac- Total university endowment 1,481,598 39,667 633.849 2,155,114 quired through purchases and contributions Living trust funds 26,206 20,791 46,997 since the university's inception, are recognized toon funds 17,872 17,872 as assets on the statement of financial position.
Gifts of collection items are recorded as in. Total _$y83598 $65 873 $672 L512 $2,219,983 creases in unrestricted net assets in the year in which the items are acquired. fixed-income and equity securities is based upon quoted market prices and exchange rates, H. Use of Estimates if applicable. The fair value of significant real The preparation of financial statements in con- estate investments is determined from valua-formity with generally accepted accounting tions prepared by independent appraisers. Pri-principles requires that management make vate equities and certain other nonmarketable estimates and assumptions that affect the re- securities are valued using current information ported assets, liabilities, revenues, and expenses obtained from the general partner or invest-during the reporting period. Actual results ment manager for the respective funds. Fees could differ from those estimates, paid to managers in 1997 and 1996 for investing the university's portfolios amounted to approxi-
. mately $5,400,000 and $5,800,000, respectively.
- l. Comparat.ive Fm.oncial Informoh.on
. . Investment income is recorded on the ac-The financial statements include certain prior-crual basis, and purchases and sales ofinvest-year summarized information m total but not ment securities in the Long-Term and by net asset class. Such information does not Short-Term Investment Pools are reflected on a mclude sufficient detail to constitute a presenta-
, trade-date basis.
tion of prior-year data m conformity with gen-Itealized and unrealized gains and losses on erally accepted accounting principles. investments are accounted for in the group Accordingly, such informatmn should be (general operations, physical capital, or finan-read m conjunction with the university's finan-cial capital) holding the assets. Ilealized gains cial statements for the fiscal year ended June 30, 1996, from which the summarize i information and losses are calculated on the average-cost basis. Income earned from investments or from was derived. services rendered is accounted for in the same group as the assets or service provider. J. Reclassification The university considers all instruments that Certain prior-year balances have been reclassi- hear an original maturity date of ninety days or
, fled to conform to current-year presentation. less to be cash or a cash equivalent. The carry-
. ing amount of cash and cash equivalents ap-proximates fair value because of the short 2cCA$ti.AND_ INVESTMENTS maturity of those instruments. The fair values of cash and invested assets at June 30,1997, are A. General informat. ion
. shown in table 3.
Investment pohcy of the university is estab-lished by the Investment Committee of the Board of Trustees. University investments are stated at fair value.The value of publicly traded 21
1 { l TABLE 3. CASH AND INVESTED ASSETS AT MARKET (IN THOUSANDS) General Physical Operations Capital True Functioning Living Trust Funds Held Endowment as Endowment fur'ds in Trust
$1,415,017 - $513,393 $ 73,235 Long Tirm investment Pcnl 36,084 90,528 . $100,091 32,728 Separately invested Portfolios
$303,658 $ 67,462 21,829 Short Term investment Pool
- 20,843 Lifs income Fund Pools O:hsr means of investment 33,240 40,198
$336,898 $107,660 $1,451,101 $625,750 $120,934 $105,963 Tolo!
Cosh c nd cash equivalents $ 36,555 $ 514 $ 17,105 $ 7,376 $ 1,421 $ 1,249 300,343 107,146 1,433,996 618,374 119,513 104,714 invssiments
$336,898 $107,660 $1,451,101 $625,750 $120,934 $105,963 Total TABLE 4.
SUMMARY
INFORMATION-INVESTMENT POOLS Fair Value Cost Net Goin Fair Value Number (in thousands! (in thousands) Per Unit of Units (in thousands) Long-Term Investment Pool
$2,034,798 $1,711,842 $322,956 $83.01 24,512,322 End of year 1,748,420 1,486,187 262,233 73.41 23,816,238 Beginning of year Unrealized net gain for year 60,723 Rr,olized net gain for year 187,421 Net gain for year $24814_4 t
Life income Fund Pools End of year 5 20,843 $ 19,056 $ 1,787 Beginning of year 19,764 18,553 1,211 Unrealized net gain for year 576 442 Realized net gain for year ~ Net gain for year $___I,018 B. Investment Pools and Separately Invested tion rates of 5.90 percent and 6.12 percent, on Portfolios average monthly balances of $387,209,844 and The university maintains the following invest- $362,723,951, respectively. Any gains or losses ment pools, and invests the principal of certain realized on investments in the Short-Term In-funds separately: vestment Pool are treated as adjustments to . The Short-Terrn Investrnent Poolincludes cash income. balances invested for the production ofincome The Long-Terrn Investment Poolis a mutual and other funds that are expected to be ex- fund-like vehicle used for investing the , pended within three years.The objective of the university's true endowment funds, funds func- - pool is to produce a high level ofincome while tioning as endowment,and other funds that are j protecting principal value. Normally the pool is not expected to be expended for at least three invested in marketable prime-quality debt secu- years. rities, at least 50 percent of which mature The Long-Term Investment Pool was in-within three years. Income distributed vested, as of June 30,1997, as a balanced fund amounted to $22,845,381 and $22,198,706 in consisting of 66 percent marketable-equity 1997 and 1996, respectively, based on distribu- securities,10 percent real estate and private-equity investments, and 24 percent bonds and 1 3
l l Financial Capitol Pensions and Student Loon %ferred Benafits Funds Total Total
$33,153 $2,034,798 $2,034,798 14,948 274,379 274,379
$ 982 22,811 393,931 20,843 20,843 139 139 73,577
$48,101 $1,121 $2,352,970 $2,797,528
$ 567 $ 18 5 27,736 $ 64,805 47,534 1,103 2,325,234 2,732.723
$48,101 $1,121 $2,352,970 $2,797,528
== -- -
fixed-income investments. The objective is to $15,369,846 in capital appreciation. The distri-achieve a total return, net of expenses, of at least bution for 1996 comprised $40,346,828 in net 5 percent in excess of inflation, as measured by investment income and $13,351,568 in capital the Consumer Price Index, over rolling five-year appreciation. At June 30,1997 and 1996, the periods. market prices per unit were $83.01 and $73.41, The universy nas a total return policy. Un- respectively. der this policy,c distribution ' rom the pool is The Life Income Famd Pools consist of do-provided for program support that is indepen- nated funds, the income of which is payable to dent of the cash yield and of appreciation of one or more beneficiaries during their lifetime. l investments in that year This insulates invest- On the termination oflife interests, the princi-ment policy from budgetary pressures, and pal becomes available for university purposes, insulates the distribution from fluctuations in which may or may not have been restricted by capital markets. The total return of the long- the donor. term investmero ; 001 was $301,318,782 (17.6 Table 4 summarizes certain information ; percent) for fiscal year 1996-97. The total re- about the Long-Term Investment and Life In-turn consisted of $53,175,396 (3.2 percent) of come Fund pools. , income and $248,143,386 (14.4 percent) of The Separately Im ested Portfolios consist of I appreciation. several types of funds that-for legal or other l Distributions from the pool are approved by reasons, or by request of the donor-could not l the Board of Trustees as part of the financial participate in any of the investment pools. At planr.ing process.The annual distribution is set June 30,1997, the portfolios consisted of 28 so that a sufficient portion of the return is rein- percent marketable-equity securities,20 percent vested to maintain the purchasing power of the real estate and private-equity securities, and 52 endowment, and to provide reasonable growth percent cash and fixed-income investments. l in the support of program budgets, as measured
, by the long-term average of the Higher Educa-C. Other investments Under the terms of certain limited partnership For the ca ended June 30,1997,distribu- ,
agreements, the umversity is obligated to peri-
. tions for investment payout were $58,812,401 dically advance additional funding for private-
- ($2.44 per unit), of which $49,815,000 sup-equity and real estate investments. At June 30, ported general operations. Substantially all of 1997, the university had commitments of ap-the remaini g distribution of $8,997,000 went to funds held in trust for others, shown ir* ;he pmxunately $93,615,000 for which capital calls had not been exercised. Such commitments accompanying Statement cf Financial Position. ,
For the fiscal year ended June 30,1996, tlx in- generally have fixed expiration dates or othgr termination clauses. The university maintams vestment payout was $53,698,396 ($2.3) per sufficient hquidity m its investment portfolio to unit).The distribution for 1997 comprised 543,442,555 in net investment income and c ver such calls. 23
TABLE 5. CONTRIBUTIONS RECEIVABLE (lN THOUSANDS) Contributions expected to be realized In one year or less $ 52,227 Between one year and five years 91,910 More than five years 4,633 148,770 , Less discount of $19,972 and allowance of $6,440 ( 26,412) Total contributions $122,358 The university engages in limited use of fu- the future, are recognized when received. Con-tures, options, and other similar vehicles to tributions in the amount of $122,358,343, rep-manage market exposure and to enhaac._ the resenting the present value of future cash flows, total return of the investment portfolio.These are recorded as receivables at June 30,1997.The financialinstruments and certain other invest- corresponding revenue was assigned to the ments necessarily involve market risk and appropriate net asset category in the year the
. counterparts credit exposure. promise was received. The face value, discount, and allowance for contributions receivable are shown in table 5. Conditional promises are D. Collateral Held for Investments Lent to recorded when donor stipulations are substan-0 * 8' b,'* * . tially met. At June 30,1997, conditional prom-Internally managed m. vestment securities hav-ises and donor intentions not reflected in the ing a fair value of $25,085,938 at June 30,1997, financial statements were $119,852,15f..
and $100,039,063 at June 30,1996, were lent t ud to baisipivitis various brokerage firms. The securities are re- amounted to approximately $16,561,000 and turnable on demand and were collateralized by
$17,555,000 for 1997 and 1996, respectively.
cash deposits of $25,7!8,750 in 1997 and
$102,843,750 in 1996.The collateral is invested in short-term securities, and income earned is C. Student Loans credited as additional income to the investment Student loans receivable at June 30,1997 and pool owning the securities. For financial state- 1996,are reported net of allowances for doubt-ment purposes, the investment assets are re- fulloans of $6,479,721 and $5,579,543, respec-duced by the liability to the brokerage firms for tively.The allowancc is intended to provide for the collateral. loans, both in repayment status and not yet in repayment status (borrowers are still in school r in the grace period following graduation),
LACCQUNI53ND30AN53ECElYABLE that may not be collected. Determination of the fair value of student A. Patients and Other Patient accounts receivable at June 30,1997 and I ns receivable could not be made without incurring excessive costs. These loans mclude - 1996, are net of provisions for allowances and donor-restricted and federally sponsored stu-doubtful accounts of $48,892,551 and dent loans that bear mandated interest rates and
$36,061,517, respectively. Other accounts re-
- j rep yment terms, and are subject to significant ceivable, including student accounts, at June 30, ,
1997 and 1996,are net of allowances for doubt- restrictions on their transfer and disposition. ful accounts of $929,880 and $715,950, respectively. 4JLEDGEDASSETS AND fUNDSDN DEPOSIT B. Contributions The New York State Dormitory Authority and Contributions,induding unconditional written others hold investments in lieu of various re-or oral promises to donate to the university in quired reserves as follows: $3,508,385 and Ti
TABLE 6. LAND, BUILDINGS, AND EQUIPMENT (IN lt10USANDS) Cost at Disposals and Cost at Accumulated Book Value at June 30,1996 Additions Closed Projects June 30,1997 Depreciation June 30,1997 Land, buildings, and improvements $1,135,707 $ 73,431 $ 265 $1,208,873 $380,758 $ 828,115
. Furniture, equipment, and books 678,480 65,701 35,025 709,156 463,535 245,621 Construction in progress 122,740 69,753 67,303 125,190 125,190 Total $ _1,936,927 $208,885 $102,593 $2,043,219 $844,293 $1,198,926 j
$4,409,021 at June 30,1997 and 1996, of finan- in progress until the projects are completed.
cial capital; and $15,306,535 and $15,215,865, Land, buildings, and equipment are detailed in respectively, of general operations. In addition, table 6. investment securities of financial capital include During the year ended June 30,1997, the United States government obligations of university's net investment in physical capital
$16,152,160 and $16,115,297 at June 30,1997 was increased $139,132,278 by capitalized ex-and 1996, respectively, which are held in escrow penditures, and $14,295,174 by debt-reduction by the Workers' Compensation lloard of New payments. Net assets designated for plant at York State. June 30,1997 are $233,790,107, and include Physical capital assets include cash and construction in progress, and reserves held United States government obligations of for future expansion and relating to debt
$35,823,584 at June 30,1997, held by the New retirement.
York State Dormitory Authority, which will be Certain properties to which the university used primarily for the retirement of debt at a does not have title are included in physical capi-future time. In addition, at June 30,1997, tal at cost as follows: (1) land and buildings in
$1,793,348 of bond proceeds was on deposit the amount of $8,489,354 at June 30,1997, and available for future project expenditures. which are leased from the New York State Dor-Student-loan assets in general operations mitory Authority, the titles to which will pass to include $5,219,560 of bond proceeds on deposit the university upon retirement of related in-with the New York State Dormitory Authority debtedness (see note 6); and (2) land, buildings, that is available for future loan disbursements. and equipment of the Statutory Colleges aggre-gating $445,031,649 at June 30,1997, the acqui-on o a rne pdmar@y Sifl115!CALCAPlIAL New York State.
Physical plant and equipment are generally stated principally at cost at date of acquisition WOND$,)dORIGAGES, .ANDEOTES PAYASLE or at fair value on the date of donation, net of accumulated depreciation. Depreciation is com- The balance outstanding, interest rates,and puted on a straight-line basis over the useful final maturity dates of the bonds and other debt lives of the buildings (30--100 years) and equip- as of June 30,1997, are summarized in table 7.
, ment (4-15 years). A full year of depreciation is The total annual debt service requirements , taken in the year of acquisition, and no depre- for the next five fiscal years and thereafter are ciation is taken in the year of disposal. Depre- shown in table 8. Interest expense paid in fiscal ciation expense is reflected as a cost of physical year 1996-97 was approximately $28,150,000.
capital. Debt and debt service relating to borrowings by Capital investments and withdrawals consist New York State for the construction and reno-of net transfers to physical capital for debt ser- vation of plant of the Statutory Colleges are not vice and the acquisition of capital assets. included in the financial statements, as they are Expenditures associated with the construc- not liabilities of the university. tion of new facilities are shown as construction 25
TABLE 7. BONDS, MORTGAGES, AND NOTES PAYABLE (lN THOUSANDS) Bolonce Maturity June 30,1997 Interest Rates Date Physical Capital New York State Dormitory Authority (NYSDA) Revenue Bond Series E $ 1,970 5.00 to 5.75 2002 + 1986 18,335 5.00 2015 , 1985 Pocied Capitol 15,366 7.80 1999 1990A 88,950 6.50 to 7.38 2030 1990B 60,000 variable 2025 , 1993 37,595 4.20 to 5.10 2005
' 1993 Pooled Loan Program 2,360 variable 2012 1996 132,005 4.30 to 5.40 2014 Bond Series 1987B 18,940 11.11 2012 Student Loon Marketing Association 30,771 various 2001 Urban Development Corporation 4,000 none 2029 Capitalized leases 1,746 various 2000 GE Capital' 1,823 9.78 2001 Other 106 various 2004
. Total Physical Capital 413,967 General Opershons-Student toons NYSDA Bond 1992 Capital Appreciation 3,668 6.60 to 6.80 2009 NYSDA Bond 1992 Serial 5,805 5.80 to 6.30 2002 l NYSDA Bond 1993 Capitol Appreciation 2,255 5.25 to 5.50 2007 {
NYSDA Bond 1993 Serial 4,065 4.30 to 4.90 2003 NYSDA Bond 1995 Capitol Appreciation 5,763 5.70 to 6.15 2011 . NYSDA Bond 1995 Serial . 9,070 4.75 to 5.45 2005 Total General Operations-Student Loons 30,626 Total Bonds, Mortgages, and Notes Poyable $444,593 . TABLE 8. ANNUAL DEBT SERVICE REQUIREMENTS (IN THOUSANDS) Under agreement with the New York State Dormitory Authority, certain revenues, princi-Annual Installment pally rental income from facilities financed by bond proceeds plus a portion of tuition, are Year Principal Inte.est Total pledged by the university to mact debt service 1998 $ 13,381 $ 26,784 $ 40,165 requirements (see note 4). Also, certain revenue ' 1999 29,296 28,140 - 57,436 bonds require maintenance of an asset-to-2000 40,263 23,123 63,386 liability ratio. 2001 21,525 21,200 42,725 The fair value of the university's bonds, , 2002 23,679 20,006 43,685 mortgages, and notes payable is approximately . Thereafter 316,449 261,824 578,273 $459,374,000.The estimated fair value of bonds Total $444,593 - $381,077 $825,670 is based on quoted market prices for the same
~- ~ ~ -
or smular issues. The market prices utilized reflect the rate that the university would have to pay to a creditworthy third party to assume the university's obligations they do not reflect an additional liability to the university.The esti-mated fair value of mortgages and notes payable 7 4
_ _ __ ~ is based upon the university's long-term bor- costs over a forty-year period that began on July rowing rate for similar debt. 1,1976. In November 1996, the university redeemed The defined-benefi i lan's funded raatus and Revenue Bond Series A using reserves already amounts recognized in the university's balance held at the New York State Dormitory sheet at June 30,1997, are shown in table 9. The Authority. discount rate used in determining the actuarial in 1993, the university issued $58,275,000 of present value of the projected benefit obligation Series 1993 tax-exempt bonds and irrevocably was 8.0 percent. The average rate of increase in
, placed $11,731,100 of bond proceeds in a future corrpensation used was 4.0 percent for trustee-administered escrow fund. The escrow Endowed hhaca and 6.1 percent for the Medical fund will pay the interest on $13,479,200 of College. The expected loag-term rate of return , bond Series 1985 Pooled Capital Program until on assets was 9.0 percent.
December 1998. At that time the escrow fund Total pension costs of the Endowed Ithaca will be combined with the Series 1985 Pooled and Medical College plans for the year ended Capital Program debt service reserve fund, and June 30,1997, amounted to $33,697,548. the remaining $13,479,200 principal will be Employees of the Statutory Colleges are cov-redeemed. Until the December 1998 redemp- cred under the New York State pension plan. tion, the escrow fund and the principal to be Contributions to the state retirement system paid will remain on the university's financial and other fringe benefit costs are paid directly statements. by the state.The amount of the direct payments applicable to the university as revenue and ex-NUE penditures is not currently determinable and is nr.t included in the financial statements. The A. Pension Plans university reimburses the state for fringe-benefit The university's employee pension plan cover. costs on certain salaries, prmcipally tho<e assy age for Endowed Ithaca and the Medical College ciated with externally sponsored programs. 'I he is provided by two basic types of plans: those am unt reimbursed to the state during the year based on a predetermined level of funding (de- ynded June 30,1997, was $6,936,530, which is fined contribution) and those based on a level included in the expenses of general operations, of benefit to be provided (defined benefit). The primary plans for Endowed Ithaca and for ex-B. Postretirement Benefits Other Than Pensions empt employees (those not subject to the over- The university provides health and life insur-time provisions of the Fair Labor Standards ance benefits for eligible retired employees and Act) at the Medical College are carried by the their dependents. SFAS No.106 (Employers' Teachers Insurance and Annuity Association Accounting for postretirement Benefits Other and the College Retirement Equities Fund, Than Pensions) requires that,even though there which also permit employee contributions. In is no legal obligation of future benefits, the cost addition, certain accrued benefits and an appro- of postretirement benefits be accrued during the priate amount of the university's pension re- service lives of employees. The university elected serves were frozen in connection with plan the prospective-transition approach and is am-reorganizations. ortizing the transition obligation over twenty The pension liabilities recognized by the years. university in connection with the frozen plans For 1997,8.0 and 7.0 percent rates ofincrease were established by charges to expenses in prior in the per-capita costs of covered health-care years, to meet future retirement costs for cur-benefits were assumed for Endowed liaca and rent employees. Although the liabilities are the Medical College, respectively, each gradually
- considered internally funded, they are not in- decreasing to a 5.5 percent rate of increase by
- tended to create a trust or fund in which any the year 2000. Increasing the assumed health-employee or former employee has any right or care cost trend by one percentage point per year interest of any kind. would increase the accumulated postretirement In accordance with ERISA requirements for benefit obligation by $13,792,747 for Endowed the defined benefit plans, the university must Ithaca and $2,318,862 for the Medical College;it annually fund with an independent trustee an would also increase the aggregate of the service-actuarially determined amount that represents cost and interest-cost components of the net normal costs plus amortization of prior service periodic postretirement benefit cost for 1997 by 27
~
TX'TEB ~, ACCUMULATED P5sSIUN~ PLAN BERsiiT5 $$TXS$TSWD CD5T (IN THOUSANDS) Endowed Ithaca Medical College Combined Accumulated benefit obligation, including vested beafits
$.21,382 $20,283 $.41,665 of $21,382 and $19,943, respectively -_
Prepaid pension cost components
$30,896 $32,874 $63,770 ,
Plan assets at fair value 21,397 24,347 45,744 Projected benefit obligation for services rendered to date , 9,499 8,527 18,026 Excess (deficiency) of plan assets over projected benefit obligation 1,494 ( 458) 1,036 Unrecognized net obligation (assei) at July 1,1987, recognized over fifteen years 655 655 , Unrecognized prior service costs Unrecognized net loss (goin) from past experience different than assumed ( 4,058 ) ( 8,687) ( 12,745)
$ 6,935 $ 37 $ 6,972 Prepaid pension cost Net periodic pension cost components Service cost (benefits earned during the period) $ 7 $ 898 $ 905 1,670 1,797 3,467 Interrst cost on projected benefit obligation Actual return on plan assets ( 5,650 ) ( 5,531 ) ( 11,181 )
3,703 2,851 6,554 N1t amortization and deferral Net periodic pension cost (income) ($_270 ) $__ 15 ($ 255) fdBLE 10. Pd5tifEfifisMEATB5R5 fits ifi$R THAN PENSIONS-NETTS5$fS AND COST (IN THOUSANd5) Endowed Ithaca Medical College Combined Prepaid (accrued) postretirement benefit cost components Accumulated postretirement benefit obligation R:tirees $34,553 $ 8,431 $42,984 Active employees eligible to mtire 16,724 4,341 21,065 Active employees not eligible to retire 31,058 5,266 36,324 Total accumulated postretirement benefit obligation 82,335 18,038 100,373 Plan assets at fair value 14,336 11,121 25,457 Excess (deficiency) of plan assets over accumulated benefit obligation ( 67,999 ) ( 6,917 ) ( 74,916 ) Unrecognized portion of net obligotion at trunsition 42,686 15,622 58,308 Unrecognized net (goin) loss from past experience different than assumed 6,468 ( 8,705) ( 2,237 ) Prepaid (accrued) postretirement benefit cost ($18,845 ) ($18,8p ) Net periodic postretirement benefit cost components Service cost (benefits earned during the period) $ 2,777 $ 770 $ 3,547 Interest cost on accumulated benefit obligation 6,217 1,371 7,588 Actual return on plan assets ( 1,974 ) ( 2,038 ) ( 4,012 ) Defared asset gain (loss) 1,115 1,303 2,418
- Net amortization of transition obligation over twenty years 2,668 976 3,644 Amortization of unrecognized (goin) loss ( 535) ( 535)
Net periodic postretirement benefit cost $10,803 $ 1,847 $12,650
i TABLE 11. ALLOCATION OF SHARED EXPENSES (IN THOUSANDS) ! l General Operations Physical Capital Operations and Interest Unfunded Post- Other Maintenance - on Debt Retirement Costs Depreciation Deductions 1997 1996 instruction $20,254 $ 4,162 $1,786 $21,399 $1,690 $ 49,291 5 46,882 Research 27,342 5,382 884 24,532 2,087 60,227 59,677
, Public service 3,346 360 49 3,191 285 7,231 7,642 Academic support 14,375 2,931 444 12,532 1,171 31,453 30,087 Student services 18,799 5,442 391 17,857 1,597 44,086 43,534
, Medical Physician's Organization 853 228 0 1,574 46 2,701 2,416 Institutional support 11,385 2,283 610 10,818 862 25,958 29,355 Enterprises and subsidiaries 1,098 9,152 683 2,538 145 13,616 15,233 Total $97,452 $29,940 $4,847 $94,441 $7,883 $234,563 $234,826 I
$1,790,846 for Endowed Ithaca and $338,637 have been allocated to functional categories.
for the Medical College, Table 11 shows the allocation as presented in A discount rate of 8.0 percent has been used the Statement of Activities. Comparative totals to determine the accumulated postretirement for fiscal year 1995--96 are also presented. obligation, and the expected long-term rate of return on assets is assumed to be 9.0 percent. L CONI 1NGENUIM!LIIlES.AND_SUBSEQUENLEYINIS The plan assets for Endowed Ithaca consist primarily of cash equivalents and are invested The university is a defendant in various legal with an outside trustee.The plan assets of the actions, some of which are for substantial Medical College are invested in one of the amounts, arising out of the normal course ofits university's Separately Invested Portfolios, operations. Although the final outcome of the i Table 10 sets forth the funded status of the actions cannot currently be determined, the Pl ans as of June 30,1997, and the components university's administration is of the opinion of net periodic postretirement costs for 1997. that eventualliability,if any,will not have a The accrued postretirement benefit cost material effect on the university's financhl shown in table 10 is $4,848,000 of current-year position. l unfunded cost plus $13,997,000 of accumulated The university retains self insurance for prior-year unfunded cost. Property, general liability, and certain health benefits, and has an equity interest in a multiprovider captive insurance company. C. Psstemployment Benefits The indirect-cost rates applicable to The university provides various benefits to government-sponsored research are subject to former or inactive employees after employment, audit. The university has completed negotia-
, but before retirement. The expected costs of tions with the federal government and reached these benefits are recognized when they are agreement with respect to the determination of earned, even though there may not be any legal final audited rates through fiscal year 1995.
. requirement to continue the programs. Cur- Negotiations to determine final indirect-cost
( + rent-year estimated costs are allocated among rates for fiscal year 1995-96 have not been com-the expenses of general operations. pleted. The result of these negotiations may also impact indirect-cost recovery in the future. RJLLOCAIlGR0L5HMER EMEM5f5 These agreements and negotiations are not expected to have a material effect on the In accordance with the AICPA Audit and Ac-umvers ty's financial position. counting Guide for Not-for-Profit Organiza-tions, shared expenses (operations and l maintenance, depreciation, interest expense), 29__
1 I l ADMINISTRATION _ JULYJ ,1997_ _ _ __ EXECUIlYLQfflCERS College of Human Ecology llunter R. Rawlings IF, President Francille M. Firebaugh, Dean Don M. Randel, Provost School ofIndustrial and Labor Relations Antonio M. Gotto Jr., Provostfor Aiedical Affairs Edward J. Lawler, Dean Frederick A. Rogers, Senior Vice President and Law School Russell K. Osgood, Allan R. Tessler Dean Chief Financial Officer , S. C. Johnson Graduate School of Management liarold D. Craft Ir., Vice Presidentfor Facilities Robert 1. Swieringa, Anne and Elmer Lindseth and Campus Services Dean 11enrik N. Dullea, Vice Presidentfor University Medical College *
! Relations Antonio M. Gotto Ir., Stephen and Suzanne Ronald G. Ehrenberg, Vice Presidentfor Weiss Dean Academic Programs, Planning, and BudgetinS Graduate School of Medical Sciences H. David Lambert, Vice Presidentfor David P. Hajjar, Dean Information Technologies (effective September 11,1997)
James J. Mingle, University Counsel and College of Veterinary Medicine Secretary of the Corporation Donald E Smith, Dean Susan H. Murphy, Vice Presidentfor Division ofIliological Sciences Student and Academic Services Peter J. Bruns, Director Inge T. Reichenbach, Vice Presidentfor Division of Nutritional Sciences Alumni Affairs and Development Cutberto Garia, Director Norman R. Scott, Vice Presidentfor School of Continuing Education and Research and Advanced Studies Summer Sessions Winnie F. Taylor, Associate Provost Glenn C. Altschuler, Dean Cornell University Library ggy Sarah E. Thomas, Carl A. Kroch University 9 Librartan Iack W. Lowe, Associate Vice Presidentfor Research Mary George Opperman, Associate EINANCIALADMINtSIRAll0N Vice Presidentfor Human Resources Carolyn N. Ainslie, Yoke San L. Reynolds, Associate Vice President Director ofBudget hianagement and University Controller Cralg Carmichel, Afedical College Controller Steven P. Rosalie, Associate Provost lames 5. Clarke, Associate Treasurer for hiedical Affairs loanne DeStefano, Associate Controller John L. Ford, Robert W and Elizabeth C. Staley Michael B. Dickinson, University Auditor Dean ofStudents Nathan Fawcett, Director, Donald A. Saleh, Dean ofAdmissions and Statutory College Affairs Financial Aid Philip V. Giuca, Senior A ssociate Dean for Petet C. Stein, Dean of the University Faculty Finance, hiedical College Randy L. Greene, Associate Controller Patricia A. Johnson, Assistant Treasurer ACADEMIC 3NIIS John E. Majeroni, Director ofReal Estate College of Agriculture and Life Sciences Yoke San L. Reynolds, Associate Vice President . Daryl lL Lund, Ronald P. Lynch Dean and University Controller College of Architecture, Art, and Planning Frederick A. Rogers, Senior Vice President and
.\nthony Vidler. Dean ChiefFinancialOfficer College of Arts and Sciences Michael L. Whalen,
- Philip E. Lewis, Harold Tanner Dean Director ofFimncial Planning l College of En,ineering lohn E. Hoperoft, Joseph Silbert Dean Graduate School Walter L Cohen, Dean School of Hotel Ministration David A. Dittman, Dean T
BOARD OF__ TRUSTEES AND TRUSTEE FELLOWS _ JULY 1,1997 Harold Tanner, Chairman ROM #dMES_Qf_HILDQARD_Qf_IRUSTES Ronay A. h1enschel, Vice Chairman Edwin H. hforgens, Vice Chairman Executive Committee Peter C. hieinig, Chairman Ex Officio Members James L. Broadhead, Vice Chairman Hunter R. Rawlings Ill, President of t Cornell University investment Comms,ttee George E. Pataki, Governor ofNew lbrk State Robert A. Paul, Chairman Joseph L. Bruno, Temporary President of the Robert J. Appel, Vice Chairman New lbrk State Senate Roger J. Weiss, Vice Chairman Sheldon Silver, Speaker of the New York State Assembly Audit Committee Richard A. Aubrecht, Chairman Other Members H. Fisk Johnson
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Ellen Gussman Thomas W. Jones Finance Committee Adelson Robert D. Kennedy Thomas W. Jones, Chairman Robert J. Appel Harvey Kinzelberg Robert T. Blakely, Vice Chairman Judith C. Areen Jules B. Kroll Carol C. Tatkon, Vice Chairman Elizabeth G. Charles R. Lee Armstrong Jon A. Lindseth Committee on Land Grant and Pichard A. Aubrecht Carol B. hiacCorkle Statutory College Affairs Jessica Bibliowicz Peter C. hieinig Paul E Cole, Cochairman Robert T. Blakely Robert W. hiiller t'eter G. Ten Eyck II, Cochairman Ann Schmeltz Bowers Howard P. hiilstein Richard C. Call, Vice Chairman Judith Berman John P. Neafsey Brandenburg S. Kay Obendorf Buildings and Properties Committee James L. Broadhead James A. Ortenzio Anne Evans Estabrook, Chairman Richard C. Call Jeffrey P. Parker Harvey Kinzelberg, Vice Chairman hiichael W. N. Chiu Robert A. Paul Howard P. hiilstein, Vice Chairman Julie Y. Chon Bruce S. Raynor J. Thomas Clark Stephen P. Rockwell Committee on Board Membership Laura J. Clark John P. Neafsey, Chairman Jerold R. Ruderman Abby Joseph Cohen John S. Dyson, Vice Chairman Richard E. Schuler Paul E Cole Richard J. Schwartz Committee on Alumni Affairs and Development Ezra Cornell Robert W. Staley J. Thomas Clark, Cochairman Diana h1. Daniels h1artin Y. Tang Jeffrey P. Parker, Cochairman John S. Dyson Carol C. Tatkon Laura 1. Clark, Vice Chairman Robert R. Dyson Peter G. Ten Eyck 11 Carol B. hiacCorkle, Vice Chairman Anne Evans Estabrook Allan R.Tessler M ary C. Falvey Samuel O. Thier Committee on Academic Affairs Samuel C. Fleming Cynthia hi. Tkachuck and Compus Life Barbara B. Friedman Roger J. Weiss Ronay A. hienschel, Chairman H. Laurance Fuller hiary C. Falvey, Vice Chairman George G. Gellert Barbara B. Friedman, Vice Chairman Joseph H. liolland Robert D. Kennedy, Vice Chairman Trustee-Community Communications Committee Ezra Cornell, Chairman Richare E. Schuler, Vice Chairman W
EMERITMS_IRUSTIES MEDICAL COLLEGE AND GRADUATE SCHOOL OF MEDICAL SCIENCES Robert H. Abrams BOARD _Of_OYEA5fER5rML1EZ Lilyan H. Affmito Sanford 1. Weill, Chairman Albert E. Arent Arthur J. Mahon, Vice chairman Donald P. Berens Elizabeth G. Armstrong
- Robert W. Bitz Brooke Astor+
Kenneth H. Blanchard Robert A. Belfer Hays Clark Kevin R. Brine , James M. Clark Abby Joseph Cohen Barber B. Conable Jr. Daniel P. Davison+ Robert A. Cowie Raul Deo Kenneth T. Derr Anne Elizabeth Dyson Fred J. Eydt Sanford Ehrenkranz Joan H. Ferreira Eleanor T. Elliott Stephen W. Fillo Barbara B. Friedman Earl R. Flansburgh Antonio M. Gotto Jr.* James Lowell Gibbs Jr. Raymond Herrmann Jr.+ Robert S. Hatfield Thomas W. Jones Samuel C. Johnson Hamish Maxwell Albert J. Kaneb John McGillicuddy Austin H. Kiplinger Howard P. Milstein Charles W. Lake Jr. Edwin H. Morgens Benson P. Lee Carl Nathaa Sol M. Linowitz Frank N. Newman Eli Manchester Jr. Jansen Noyes Jr.+ Dale Rogers Marshall Margaret Osmer-McQuade Robert J. Mcdonald Joel D. Paidee* Jansen Noyes Jr. Hunter R. Rawlings III* , Margaret Osmer-McQuade Frank H. T. Rhodes j George Peter Jack Richard William E. Phillips Isadore Fosenfeld Samuel R. Pierce Jr. Peter M. Sacerdote David Pollak Harvey L. Sampson+ Bernard W. Potter Richard Shinn+ Curtis S. Reis Daisy Margaret Soros William R. Robertson Saul P. 5 teinberg+ Aubrey E. Robinson Jr. Charles T. Stewart + Adele Langston Rogers Patricia Carry Stewart + Harvey E. Sampson Harold Tanner
- Nelson Schaenen Jr. Samuel O. Thier Jack Sheinkman Stanley S. Tollman Daniel G. Sisler Richard F. Tucker +
Charles T. Stewart Roger J. Weiss , Patricia Carry Stewart Stephen H. Weiss + . j Paul R.Tregurtha Frederick D. Wilkinson Jr.+ i Charles E.Treman Jr. " Richard F. Tucker *$((]. ,. , , , Sanford 1.Weill Stephen H. Weiss (*""a un-- . on w we %
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- l Don J. Wickham I Bruce Widger e n,,,,.y,,,,,p,,n,.aon, w r w on,<. of eusi conon. s.,vu, g 1097 1,200 AP}}