ML25073A182
| ML25073A182 | |
| Person / Time | |
|---|---|
| Site: | North Carolina State University |
| Issue date: | 03/14/2025 |
| From: | Hawari A North Carolina State University |
| To: | Office of Nuclear Reactor Regulation, Document Control Desk |
| References | |
| Download: ML25073A182 (1) | |
Text
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Submittal Response to Request for Additional Information
Nuclear Reactor Program Page 1 of 4 RESPONSE TO REQUEST FOR ADDITIONAL INFORMATION FOR 297-NC STATE LICENSE RENEWAL AND POWER UPRATE RAI-10478-R1 NORTH CAROLINA STATE UNIVERSITY AT RALEIGH LICENSE NO. R-120; DOCKET NO. 50-297 MARCH 14, 2025
- 1. By letter dated February 24, 2017 (ML17088A819) and supplements dated March 29, 2017 (ML17201Q129, ML17088A828), August 9, 2019 (ML19221B600) and November 1, 2018 (ML18312A305), May 26, 2020 (ML20149K877), NCSU submitted its projected operating cost for the NCSU PULSTAR reactor for each of the fiscal years (FY) 2018 through FY2022. The regulations in 10 CFR 50.33(f) requires an applicant for a license to provide information on its financial qualifications. Therefore, NCSU must provide information that demonstrates that it possesses or has reasonable assurance of obtaining the funds necessary to cover estimated operating costs for the period of the license. The NCSU must also submit estimates for the total annual operating costs for each of the first five years of facility operations from the expected license renewal date and indicate the source(s) of funds to cover those costs. Provide the projected operating costs for the NCSU PULSTAR reactor for year 2026, 2027, 2028, 2029, and 2030 looking into the five years forward.
RESPONSE
Information demonstrating NCSUs reasonable assurance of obtaining the funds necessary to cover estimated annual operating costs is present in Section 2 of the attached PULSTAR Reactor Financial Qualifications Report Updated. In this section, estimates for the years 2026 through 2030 projected operating costs and sources of funding are given in Tables 1 and 2.
Nuclear Reactor Program Page 2 of 4
- 2. The regulations in 10 CFR 50.75, Reporting and recordkeeping for decommissioning planning", (d)(1), states, in part, that each non-power reactor applicant for or holder of an operating license for a production or utilization facility shall submit a decommissioning report.
Pursuant to 10 CFR 50.75(d)(2), NCSU provided a decommissioning cost estimate of $16.4M in 2017 dollars. Provide an updated decommissioning cost estimate for the NCSU PULSTAR reactor in 2025 dollars that includes inflation considerations.
RESPONSE
An updated decommissioning cost estimated for the NCSU PULSTAR reactor in 2025 dollars has been included in the attached PULSTAR Reactor Financial Qualifications Report Updated in Section 3.1.2. The updated cost estimate is projected to be $21.25 million in 2025 dollars.
Nuclear Reactor Program Page 3 of 4
- 3. NCSU has elected to use a statement of intent (SOI) to provide financial assurance, as allowed by 10 CFR 50.75(e)(1)(iv) for a Federal, State or local government licensee. The SOI must contain or reference a cost estimate for decommissioning and indicate that funds for decommissioning will be obtained when necessary. NCSU provided an updated SOI, titled "PULSTAR REACTOR FINANCIAL QUALIFICATIONS REPORT", dated March 29, 2017 (ML17088A828), stating that it is a state government organization and that decommissioning funding obligations are fully backed by the state government of North Carolina. Provide an updated SOI for year 2025.
RESPONSE
An updated SOI dated March 13, 2025 has been included in the attached PULSTAR Reactor Financial Qualifications Report Updated stating that the governing body is a state government organization and that decommissioning funding obligations are fully backed by the state government of North Carolina.
Nuclear Reactor Program Page 4 of 4
- 4. Consistent with section 104c of the Atomic Energy Act of 1954, as amended (AEA), in the case of a utilization facility that is useful in the conduct of research and development activities of the types specified in section 31 of the Act, no more than 75 percent of the annual cost to the licensee of owning and operating the facility can be devoted to the sale of nonenergy services, energy, or a combination of nonenergy services and energy, other than for research and development or education and training, and no more than 50 percent of the annual costs to the licensee of owning and operating the facility are devoted to the sale of energy.
Additionally, 10 CFR 50.22, Class 103 licenses; for commercial and industrial facilities, states, in part, that, in the case of a utilization facility which is useful in the conduct of research and development activities of the types specified in section 31 of the Act, such facility is deemed to be for industrial or commercial purposes if the facility is to be used so that more than 50 percent of the annual cost of owning and operating the facility is devoted to the production of materials, products, or energy for sale or commercial distribution, or to the sale of services, other than research and development or education or training.
By letter dated March 29, 2017 (ML17088A828), NCSU submitted a financial qualification report discussing the commercial activities in relation to the annual cost of owning and operating the NCSU PULSTAR reactor facility. Provide an updated financial qualification report showing the status as of year 2025 that provides a statement that the NCSU PULSTAR reactor facility complies with these requirements and 10 CFR 50.22 to renew licensing as a Class 104 research reactor.
RESPONSE
As described in Section 2 (following Tables 1 and 2) of the attached PULSTAR Reactor Financial Qualifications Report Updated, the current and projected status of the NCSU PULSTAR reactor facility complies with the requirements and 10 CFR 50.22 to renew licensing as a Class 104 research reactor.
Attachment PULSTAR Reactor Financial Qualifications Report Updated
PULSTAR REACTOR FINANCIAL QUALIFICATIONS REPORT UPDATED NORTH CAROLINA STATE UNIVERSITY RALEIGH, NORTH CAROLINA 27695 LICENSE NO. R-120 DOCKET NO. 50-297 14-March-2025
2 Contents
- 1.
Introduction................................................................................................................................... 3
- 2.
Annual Funding and Operating Expenditures................................................................................ 3
- 3.
Decommissioning Report............................................................................................................... 4 3.1.
Decommissioning Cost Estimate...................................................................................................... 4 3.1.1.
2017 NC State PULSTAR Decommissioning Estimate......................................................... 4 3.1.2.
2025 NC State PULSTAR Decommissioning Estimate......................................................... 5 3.2.
Funding Method.............................................................................................................................. 5
- 4.
References...................................................................................................................................... 6 NCSU Annual Financial Report 2024 Statement of Intent (SOI) Regarding Decommissioning Funding for the PULSTAR Reactor Facility at NC State University
3
- 1. INTRODUCTION This Financial Qualifications Report is submitted pursuant to the requirements of 10 CFR 50.33 and 10 CFR 50.75. Pursuant to 10 CFR 50.33(f)(2), none of the provisions of 10 CFR 50.33(d) apply. The applicant is a government institution of the State of North Carolina.
- 2. ANNUAL FUNDING AND OPERATING EXPENDITURES North Carolina State University is a government institution of the State of North Carolina. Pursuant to 10 CFR Part 50.33(f)(2), none of the provisions of 10 CFR Part 50.33(d) apply. The University of North Carolina is incorporated under North Carolina General Statute (NCGS) Chapter 116 Article 1 Section 3. NCGS 116-4 provides that North Carolina State University at Raleigh is a constituent institution of the University of North Carolina. NCGS 116-11 (9)(a) provides that the university Board of Governors shall develop, prepare and present to the Governor and the General Assembly a single, unified recommended budget for all of the constituent institutions of The University of North Carolina.
The State Budget Allocation line projecting estimated state funding of the NCSU PULSTAR reactor facility (as detailed in Table 1).
Pursuant to 10 CFR 50.33(f)(2), the estimated annual funding for the first 5 year period after the projected license renewal are given in Table 1. The annual operating expenditures for the first 5 year period after the projected license renewal are given in Table 2. As indicated below, the projected annual funding levels of the reactor facility are equal to the projected annual operating expenditures.
A recent annual financial statement for North Carolina State University detailing the financial solvency of the institution is appended as Attachment 1.
Table 1 - PULSTAR Reactor Facility Annual Funding Fiscal Year 2025 2026 2027 2028 2029 2030 State Budget Allocation 2
$560,000
$565,600
$571,300
$577,000
$582,800
$588,600 Services Cost Recovery 3
$550,000
$562,700
$575,600
$588,900
$602,400
$616,300 Federal Contracts and Grants 4
$1,450,000
$1,483,400
$1,517,500
$1,552,400
$1,588,100
$1,624,600 Total Funding
$2,560,000
$2,611,700
$2,664,400
$2,718,300
$2,773,300
$2,829,500 Table 2 - PULSTAR Reactor Facility Annual Operating Expenditures Fiscal Year 2025 2026 2027 2028 2029 2030 Total Personnel 5
$1,460,000
$1,493,600
$1,527,900
$1,563,000
$1,599,000
$1,635,800 Total Operating and F&A6
$1,100,000
$1,118,100
$1,136,500
$1,155,300
$1,174,300
$1,193,700 Total Expenditures
$2,560,000
$2,611,700
$2,664,400
$2,718,300
$2,773,300
$2,829,500 Bases and Assumptions:
- 1. The budgeted figures detailed in the tables above represent likely funding and expenditures for the specified fiscal years (which run from July 1 of the preceding year through June 30 of the year indicated). Expenses are projected to increase at an estimated 2.3% annual rate of inflation.
4
- 2. The state allocation is provided via NC State Universitys 2-15461 account and is estimated for future years based on a 1% rate of growth.
- 3. Operating funds required over-and-above the annual state allocation are provided by reactor services revenue and are budgeted for reactor operating expenditures via the university trust account 3-76676.
- 4. Federal funding for the development of experimental capabilities has been included in these budget estimates. The development of experimental capabilities is funded through sponsored research programs.
- 5. The budget estimate for Personnel includes salaries and wages for all facility administrative, operating and research staff, graduate students, and student reactor operators.
- 6. The estimates for total Operating and Facilities and Administrative (F&A) costs include all direct and in-direct (non-personnel) costs of operating and supporting the reactor facility.
Funding for internal NC State academic research and development is included under the Federal Contracts and Grants line in Table 1. The NCSU PULSTAR reactor is also a user facility and as such is utilized by external academic, governmental, and commercial entities for research and development and other irradiation and testing activities. The total projected revenue from all service user activities is estimated under the Services Cost Recovery line of Table 1. While the facility does perform some service work for commercial users (about two thirds of the annual Services Cost Recovery totals given in Table 1), the revenue generated from these activities represents significantly less than 50% of the total annual cost of operating the facility as detailed in Table 2.
Therefore, pursuant to the requirements of 10 CFR 50.21(c) and 10 CFR 50.22 concerning a Class 104(c) research facility, no more than 50 percent of the annual cost of owning and operating the PULSTAR facility is devoted to the production of materials, products, or energy for sale or commercial distribution, or to the sale of services, other than research and development or education or training, and as such, the NCSU PULSTAR Reactor should be licensed as a Class 104 facility.
- 3. DECOMMISSIONING REPORT Pursuant to 10 CFR 50.33(k) and 10 CFR 50.75(d), the following is a decommissioning report containing the following:
- 1) Updated cost estimate for decommissioning the facility.
- 2) Indication of the funding method to be used to provide funding assurance for decommissioning.
3.1. Decommissioning Cost Estimate 3.1.1. 2017 NC State PULSTAR Decommissioning Estimate As previously described in the 2018 PULSTAR Reactor Financial Qualifications Report[1], the decommissioning cost for the NC State PULSTAR are conservatively bounded by the $14.1M cost of the Buffalo PULSTAR decommissioning effort. Using the Buffalo PULSTAR decommissioning effort as a baseline, the corresponding estimated 2014 decommissioning cost for the NC State PULSTAR facility would be $12.6M (see Ref [1] for more details).
5 Applying the methodology of NUREG 1307[2] (see Table 3), the estimate for decommissioning the NC State PULSTAR is $12.8 million in 2016 dollars as corrected from 2014. Applying an Organization for Economic Cooperation and Development (OECD) projected 2017 U.S. inflation estimate of 1.9%[3] to correct from 2016 to 2017 dollars yields an estimated PULSTAR facility decommissioning cost of $13.1 million in 2017 dollars. This total may be subdivided into labor, materials, and services (65%) at $8.5 million, energy and transportation (13%) at $1.7 million, and waste burial (22%) at $2.9 million.
Table 3 - Estimated 2017 Decommissioning Costs for the NC State PULSTAR Reactor Facility Primary Year of Deconstruction Total 2014 Cost Labor Adj.
Lx Energy Adj.
Ex Waste Burial Adj. Rx Estimated 2016 Decom.
Cost Corrected 2017 Decom.
Cost Buffalo PULSTAR 2014 (actual)
$14.1M 1.047 0.892 1.011
$14,400,000
$14,600,000 NC State PULSTAR 2014 (basis)
$12.6M est.
1.047 0.892 1.011
$12,800,000
$13,100,000 3.1.2. 2025 NC State PULSTAR Decommissioning Estimate Updating the 2017 estimated cost to current 2025, the same methodology of NUREG 1307 was applied. Using the equations in Section 3.3 of Ref. [1], the estimated decommissioning costs for 2025 are given in Table 4.
Table 4 - Estimated 2025 Decommissioning Costs for the NC State PULSTAR Reactor Facility Primary Year of Deconstruction Estimated 2016 Decom.
Cost Labor Adj.
Lx Energy Adj.
Ex Waste Burial Adj.
Rx Estimated 2024 Decom. Cost Corrected 2025 Decom. Cost NC State PULSTAR 2014 (basis)
$12.8M 1.299 1.789 0.995
$16.6M
$17.0M Applying the methodology of NUREG 1307[4] (see Table 4), the estimate for decommissioning the NC State PULSTAR is $16.6 million in 2024 dollars as corrected from 2016 estimates. Applying an Organization for Economic Cooperation and Development (OECD) projected 2025 U.S. inflation estimate of 2.2%[5] to correct from 2024 to 2025 dollars yields an estimated PULSTAR facility decommissioning cost of $17.0 million in 2025 dollars.
Adding a 25% contingency factor per NRC requirements would increase the total estimated cost to
$21.25 million. This estimate assumes that NC State will utilize the DECON method of decommissioning, removing and disposing of all radioactive waste offsite. The estimate does not include salaries of PULSTAR reactor personnel contributing to the decommissioning effort.
3.2. Funding Method Pursuant to 10 CFR 50.75(e)(1)(iv), North Carolina State University intends to use a Statement of Intent (SOI) as the method to provide decommissioning funding assurance. Please reference
6
- Statement of Intent (SOI) regarding Decommissioning Funding for the PULSTAR Reactor Facility at NC State University, dated March 13, 2025.[6-7].
- 4. REFERENCES 1
PULSTAR Reactor Financial Qualifications Report, November 1, 2018, North Carolina State University, ML18312A305.
2 Report on Waste Burial Charges; Changes in Decommissioning Waste Disposal Costs at Low-Level Waste Burial Facilities, NUREG-1307, REV. 15, U.S. Nuclear Regulatory Commission, January 2013; https://www.nrc.gov/docs/ML1302/ML13023A030.pdf 3
Organization for Economic Cooperation and Development (OECD) 2017 U.S. Inflation Forecast; https://data.oecd.org/price/inflation-forecast.htm 4
Report on Waste Burial Charges; Changes in Decommissioning Waste Disposal Costs at Low-Level Waste Burial Facilities, NUREG-1307, REV. 20, U.S. Nuclear Regulatory Commission, February 2025; https://www.nrc.gov/docs/ML2503/ML25037A226.pdf 5
Organization for Economic Cooperation and Development (OECD) 2025 U.S. Inflation Forecast; https://data.oecd.org/price/inflation-forecast.htm 6
North Carolina General Statutes - Chapter 116, Higher Education, Article 1, University of North Carolina; http://www.ncga.state.nc.us/enactedlegislation/statutes/html/bychapter/chapter_116.html 7
North Carolina State University Regulation 01.20.02, Delegation of Authority to Sign Contracts, REV. November 26, 2024; https://policies.ncsu.edu/regulation/reg-01-20-02/
NCSU Annual Financial Report 2024
NORTH CAROLINA STATE UNIVERSITY Annual Financial Report 2024
2
1 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT TABLE OF CONTENTS Prepared by the University Controllers Of"ce For the Fiscal Year Ended June 30, 2024 A constituent institution of the University of North Carolina and a component unit of the State of North Carolina 03 04 05 06 09 10 11 Mission Statement Message from the Chancellor Letter of Transmittal NC State Pride Points Financial Highlights NC State University Board of Trustees Executive and Administrative Of"cers INTRODUCTORY SECTION Report of the Independent Auditor Managements Discussion and Analysis Statement of Net Position Proprietary Fund Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund Statement of Cash Flows Proprietary Fund Statement of Fiduciary Net Position Statement of Changes in Fiduciary Net Position Component Foundations Statement of Financial Position Component Foundations Statement of Activities Index to the Notes to the Financial Statements Notes to the Financial Statements Required Supplementary Information FINANCIAL SECTION Ratio of Net Gain in Endowment Investments Available Funds Admissions, Enrollment and Degree Statistics Faculty Statistics Campus Maps 14 19 30 32 33 35 36 40 41 43 44 85 92 93 94 99 100 SUPPLEMENTARY INFORMATION SECTION
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 2
3 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT MISSION STATEMENT As a research-extensive land-grant university, North Carolina State University is dedicated to excellent teaching, the creation and application of knowledge, and engagement with public and private partners. By uniting our strength in science and technology with a commitment to excellence in a comprehensive range of disciplines, NC State promotes an integrated approach to problem solving that transforms lives and provides leadership for social, economic, and technological development across North Carolina and around the world.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 4
W. Randolph Woodson, Chancellor NC State University LET TER FROM THE CHANCELLOR NC States global reputation for excellence continues to reach new heights - and the past year was no exception. Through the work of our dedicated community of faculty, staff, students, alumni and support-ers, 2024 was a year of record-breaking achievements across NC States many units and departments.
The universitys strong "nancial management practices support all that we do on campus and across the state, and led to solid "nancial outcomes for "scal 2024.
Our success in academics, research, growth, and more would not be possible without the State of North Carolinas strong support, and we are deeply grateful for the universitys inclusion in the state budget. State investment signals a belief in the transformative impact of our work today as well as in the years to come, and entrusts to us the future of North Carolinas students, research, outreach and so much more. Among other areas, the state budget provides the university with funds for expanding our engineering and veterinary medicine programs, renovating existing buildings and constructing new ones to better support our research, teaching and extension missions.
Alongside state support, philanthropy has allowed us to offer affordable education options to a growing number of students - nearly 40,000. NC States commitment to affordability and quality education has brought national recognition for value. In the U.S. News and World Reports annual list, NC State ranked highly in best value among national public universities. We continue to see a steady increase in demand for an NC State education, with almost 45,000 applicants for admission in fall 2024.
The past year also brought recognition for NC States exceptional research efforts. Our preeminence in innovation and discovery have strengthened our reputation to prospective students and partners, and have enhanced Raleighs standing as a tech-hub and economic driver for the state of North Carolina. In "scal 2024, our faculty submitted more than $2.0 billion in proposals and NC State was awarded $517 million in sponsored research awards - a new record high. Whats more, our "ndings have an impact:
in "scal 2024, NC State inventors negotiated 155 commercialization agreements, launched 15 startups and 21 new products from NC State intellectual property. Among universities without a medical school, NC State ranks second in total commercialization agreements, executive licenses and new products released.
The year 2023-24 was another successful one for our partnerships and support as NC State works to foster a culture of philanthropy. Our sixth annual day of giving raised more than $46 million through nearly 22,000 gifts, and our $2.2 billion as of June 30, 2024 is one of the fastest growing among the largest U.S. endowments.
NC State continues to be a model of "nancial stability, strengthened by the talented and dedicated employees who manage our business operations, maintain our campus, steward our endowment and much more - supporting NC States success every day.
5 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT LET TER OF TRANSMIT TAL Charles A. Maimone Executive Vice Chancellor for Finance and Administration NC State University To:
Chancellor W. Randolph Woodson and the Board of Trustees North Carolina State University I am pleased to present North Carolina State Universitys 2024 Annual Financial Report.
Prepared by Finance and Administration staff in accordance with generally accepted account-ing principles for public colleges and universities as de"ned by the Governmental Account-ing Standards Board, the report contains detailed information about the universitys "nancial activities. This report includes key "nancial data for the past "ve years, complete "nancial statements with management analysis, the Of"ce of the State Auditors report, and recent achievements. Supplemental information includes trend data relating to admissions, enroll-ment, degrees awarded, faculty, endowment, and debt coverage. The information enclosed is accurate in all material respects and reported in a manner fairly representing the universitys "nancial position to the best of our knowledge. NC State maintains an effective system of internal controls to ensure that "nancial assets are safeguarded and transactions are properly executed and recorded.
Financial Report Highlights for Fiscal Year 2024 The universitys "nancial assets including deferred out"ows of resources were $4.68 billion.
Net position grew by $237.1 million or 15.0% during the reporting period. Beginning net position was $1.58 billion as restated and ending net position was $1.82 billion.
Revenues and expenses (operating, nonoperating and other) were $2.22 billion and
$1.98 billion, respectively.
Revenues exceeded expenses by $136.7 million (net income) before capital contribu tions of $82.0 million and additions to endowments of $18.4 million.
Revenues (operating, nonoperating and other) increased by $221.1 million or 11.1%,
primarily due to increases in federal grants and contracts, sales and services, state appropriations, investment income, and capital contributions. This was offset by a de crease in coronavirus federal aid.
Expenses increased by $256.3 million or 14.8%, with salaries and bene"ts showing the largest increase, offset by a decrease in scholarships and fellowships.
NC State upholds its commitment to "nancial stewardship and its overarching goal of solving the grand challenges of an increasingly complex world. In this way the university preserves its land grant mission to create economic, societal and intellectual prosperity for the people of North Carolina and the United States.
Sincerely,
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 6
NC STATE PRIDE POINTS Essential Facts and Figures x
38,400+ students, 2,400+ faculty and 7,100+ staff x
Educating more North Carolinians than any other university x
Student-faculty ratio 16:1 x
12 colleges representing all major academic "elds x
More than 300 undergraduate and graduate degree programs offered through 68 departments x
NC State Extension serves citizens in all 100 counties and the Eastern Band of Cherokee Indians Ranked Among the Best x
Top 1% of universities worldwide (Center for World University Rankings) x
- 2 best public college in North Carolina for value (Money) x
- 2 for research commercialization among public universities nationally (Heartland Forward) x
- 2 military-friendly school among Tier 1 research institutions (Military Friendly) x
- 2 military spouse-friendly school among Tier 1 research institutions (Miliary Friendly) x
- 3 graduate nuclear engineering program nationally (U.S. News & World Report) x
- 3 graduate biological/agricultural engineering program nationally (U.S. News & World Report) x
- 4 online bachelors programs nationally (U.S. News & World Report) x
- 5 veterinary medicine program nationally (U.S. News & World Report) x
- 8 undergraduate biological/agricultural engineering program nationally (U.S. News & World Report) x
- 8 in MBA programs with the best return on investment (Poets & Quants) x
- 8 best for "nancial aid among public universities nationally (Prnceton Review) x
- 9 best value among public universities nationally (Princeton Review) x
- 18 graduate applied mathematics program nationally (U.S. News & World Report) x
- 19 online graduate engineering program nationally (U.S. News & World Report)
Academic Excellence: Brightest Students, Best Faculty x
More than 100 of our students were national scholars and fellows over the past "ve years x
Graduate and undergraduate students from across NC State were recognized with 17 Graduate Research Fellowships from the National Science Foundation during the 2023-2024 academic year.
x
Five students from NC State received grants from the Fulbright U.S. Student Program in 2024. The program provides students with opportunities to study, teach and conduct research internationally as they deepen NC States relationships with the global community.
x
In 2023, two NC State students were awarded funds to pursue a summer travel-work experience as part of the inaugural cohort for the Obama-Chesky Scholarship for Public Service, also known as the Voyager Scholarship.
x
The Chancellors Faculty Excellence Program groups world-leading educators and researchers into 20 interdisciplinary clusters, including bioinformatics, precision medicine and public science.
x
Twenty-"ve of our faculty are members of the National Academies.
7 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NC STATE PRIDE POINTS Driving Economic Prosperity x
200+ startups and spinoffs based on NC State research, attracting a total of $1.7 billion in venture capital x
- 2 nationwide in active licenses and options; #3 nationwide for startups launched among universities without a medical school (AUTM Licens-ing Activity Survey, 2021) x
1,500+ patents issued in the U.S., yielding 600+ consumer products x
The Wolfpack Investor Network (WIN) matches NC State alumni investors with promising university-af"liated startups to facilitate mentoring, support and angel investments for entrepreneurial businesses. WIN members have invested more than $13 million in 23 NC State startups.
x
The Milken Institute, an economic think tank, cited the collaboration and innovation fostered by NC State - and particularly by Centennial Cam-pus - as key reasons why Raleigh is the one of the best-performing large cities in the United States.
x
NC State and its students, alumni and associated startups generate $6.5 billion of North Carolina income annually.
A National Leader in Attracting Sponsored Research and Interdisciplinary Partnerships That Make a Difference x
$517 million in new sponsored research awards for "scal year 2024 - the highest in university history x
- 3 in the nation for the share of our research sponsored by private industry (for universities without a medical school), according to the Association of University Techology Managers x
Leading university for two National Science Foundation Engineering Research Centers:
x
The FREEDM Systems Center, researching smart-grid technology x
The ASSIST Center, developing wearable, self-powered health monitors x
The "rst North American location for an IBM Q Hub, a collaborative effort to advance quantum computing x
Future home to the Integrative Sciences Building, a $180 million investment that will house the Intergrative Sciences Initiative to drive interdisciplinary synergy in the sciences x
Future home to the Bezos Center for Sustainable Protein, a biomanufacturing hub that will develop dietary proteins that are healthy, delicious, affordable and sustainable x
Home to two major interdisciplinary National Science Foundation-funded centers launched in 2021:
x
The NSF AI Institute for Engaged Learning, a $20 million center that aims to create arti"cial intelligence tools to advance human learning and education x
The NSF Science and Techology Center - Science and Techologies for Phosphorus Sustainability (STEPS), a $25 million center that studies how to reduce dependence on mined phosphates and the amount of phosphorus that leaches into soil and water x
A partner in seven of the 16 public-private institutes that make up Manufacturing USA, a federal initiative to revitalize the U.S. manufacturing industry x
Home to the Southeast Climate Adaption Science Center, one of nine such centers in the United States NC States Centennial Campus A national model for partnership-driven research campuses x
A nationally acclaimed public-private reserach campus where 70+ corporate, government and nonpro"t partners work alongside 70+ research and academic units x
Home to the College of Engineering, the Wilson College of Textiles, the College of Veterinary Medicine, and the Institute of Emerging Issues, a think tank focused on tackling big issues that affect North Carolinas prosperity x
Supports lifelong learning through K-12, graduate and continuing education, distance and online learning, and executive education x
Houses the Of"ce of Research and Innovation, which supports the universitys research and commercialization mission x
Houses the James B. Hunt Jr. Library: Winner of the prestigious Stanford Prize for Innovation in Research Libraries, and one of the most tech-nologically advanced learning and collaboration spaces in the world x
Offers a wealth of dining options, housing and amenities, most of which are available to the public
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 8
9 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT FINANCIAL HIGHLIGHTS 2020 2021 2022 2023 2024 University Net Position Invested in Capital Assets, Net of Related Debt (2)
$1,585.2
$1,637.3
$1,672.2
$1,724.6
$1,790.9 Restricted Nonexpendable
$167.4
$175.8
$184.8
$188.5
$207.2 Restricted Expendable (1)
$347.1
$501.0
$500.5
$506.6
$555.6 Unrestricted
-$1,352.0
-$1,252.6
-$1,068.3
-$837.9
-$734.8 Total Net Position (2)
$747.7
$1,061.5
$1,289.2
$1,581.8
$1,818.9 Contributions Noncapital Contributions
$80.0
$100.4
$95.6
$104.7
$115.4 Capital Contributions
$86.0
$106.8
$39.4
$66.8
$82.0 Contracts & Grants Federal Contracts and Grants
$171.9
$180.4
$191.6
$207.9
$244.0 State and Local Contracts and Grants
$46.6
$53.5
$44.1
$48.5
$54.2 Nongovernmental Contracts and Grants
$91.1
$94.2
$102.4
$116.7
$121.1 Total Contracts and Grants
$309.6
$328.1
$338.1
$373.1
$419.3 Appropriations and Tuition and Fees Federal Appropriations
$25.2
$23.0
$23.7
$24.6
$23.5 State Appropriations for Operations
$522.9
$520.6
$578.0
$616.3
$658.9 State Appropriations for Capital Projects
$0.9
$7.7
$0.0
$0.4
$0.0 Tuition and Fees (Gross)
$461.2
$438.5
$463.2
$488.2
$510.1 Foundation Support
$106.1
$134.9
$90.5
$104.8
$118.5 Endowment Investments
$379.6
$522.7
$532.0
$526.9
$586.6 Investment Fund Return 2.1%
39.3%
3.2%
1.2%
11.8%
Capital Assets Total University Capital Assets (2)
$3,437.7
$3,561.6
$3,786.5
$3,947.1
$4,153.4 Total University Capital Assets, Net of Accumulated Depreciation (2)
$2,192.5
$2,221.7
$2,327.7
$2,354.0
$2,428.9 University Debt Short-term Debt
$50.0
$0.0
$0.0
$0.0
$0.0 Bonds Payable
$458.7
$532.4
$509.6
$486.5
$605.8 Notes Payable
$56.7
$51.7
$46.2
$40.1
$33.5 Estimated Expenses for Full-Time Students Living on Campus - N.C.
Residents (dollars are in whole numbers)
Tuition and Fees
$9,100
$9,100
$9,130
$9,128
$9,105 Books and Supplies
$1,082
$1,082
$1,094
$854
$869 Room Rent (Average)
$6,714
$6,768
$6,974
$7,432
$7,996 Meals (Average)
$4,645
$4,833
$4,983
$5,316
$5,723 Other Personal Expenses
$1,576
$1,608
$1,628
$1,795
$1,855 Transportation
$1,100
$1,122
$1,135
$1,186
$1,224 Total
$24,217
$24,513
$24,944
$25,711
$26,772 FOR THE YEARS ENDED JUNE 30, 2020-2024 (DOLLARS ARE IN MILLIONS)
- 1.
Sources for funding Restricted Expendable Net Assets include gifts, contracts and grants, unexpended capital appropriations, endowment income, unexpended debt proceeds, required reserves, and loan funds.
- 2. 2023 Restated due to implementation of GASB Implementation Guide 2021-1 Question 5.1, Asset Capitalization policy for Individual assets below capitialization threshold but signi"cant in aggregate.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 10 BOARD OF TRUSTEES I
Edward I. Wesiger, Jr, Charlotte, NC Chair David Dee Herring, Lillington, NC Timothy L.
- Humphrey, Raleigh, NC Ven Poole, Raleigh, NC As of June 30, 2024 S f Perry Safran, Raleigh, NC David M. Powers, Raleigh, NC Derick Close, Fort Lawn, SC James A. Harrell III, Raleigh, NC Erik L. Dixon, Wake Forest, NC Wendell H. Murphy, Rose Hill, NC Marie F. Arcuri, Winston-Salem, NC James L. Holmes, Raleigh, NC Ghazale Johnston, Charlotte, NC S
III Edwin J. Stack III, Morehead City, NC Allison Markert, Student Body President
11 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT EXECUTIVE AND ADMINISTRATIVE OFFICERS EXECUTIVE OFFICERS W. Randolph Woodson Marc I. Hoit Alyson Wilson Chancellor Vice Chancellor for Information Technology Vice Chancellor for Research, Innovation and Economic Development Warwick Arden Brian C. Sischo Doneka Scott Provost and Executive Vice Chancellor Vice Chancellor for University Advancement Vice Chancellor and Dean for the Division of Academic and Student Affairs Boo Corrigan Charles A. Maimone Lindsay Recchie Director of Athletics Executive Vice Chancellor for Interim Chief of Staff Finance and Administration Allison Newhart Vice Chancellor and General Counsel DEANS Garey Fox Peter Harries Lewis Owen Dean of College of Dean of Graduate School Dean of College of Sciences Agriculture and Life Sciences Mark Hoversten Deanna Dannels David Hinks Dean of College of Design Dean of College of Humanities Dean of Wilson College of Textiles and Social Sciences Paola Sztajn Frank Buckless Doneka Scott Dean of College of Education Dean of Poole College of Management Vice Chancellor and Dean for the Division of Academic and Student Affairs Jim Pfaendtner Myron Floyd Kate Meurs Dean of College of Dean of College of Dean of College of Engineering Natural Resources Veterinary Medicine As of June 30, 2024
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 12
13 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY 2024 ANNUAL FINANCIAL REPORT FINANCIAL SECTION
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 14 North Carolina Office of the State Auditor Dave Boliek, State Auditor 20601 Mail Service Center l Raleigh, NC 27699 l 919-807-7500 l www.auditor.nc.gov Independent Auditors Report Board of Trustees North Carolina State University Raleigh, North Carolina Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the business-type activities and fiduciary activities of North Carolina State University (University), a constituent institution of the multi-campus University of North Carolina System, which is a component unit of the State of North Carolina, and its discretely presented component units, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Universitys basic financial statements as listed in the table of contents.
In our opinion, based on our audit and the reports of the other auditors, the accompanying financial statements present fairly, in all material respects, the respective financial position of the business-type activities and fiduciary activities of North Carolina State University, and its discretely presented component units, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
We did not audit the financial statements of the NC State Investment Fund, Inc., which represent 20 percent and 3 percent, respectively, of the assets and revenues of the business-type activities, and 97 percent and 56 percent, respectively, of the assets and revenues of the fiduciary activities; nor the financial statements of the North Carolina State University Foundation, Inc. or the North Carolina Agricultural Foundation, Inc., the Universitys discretely presented component units.
Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinions, insofar as they relate to the amounts included for those entities, are based solely on the reports of the other auditors.
Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards (GAGAS), issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of North Carolina State University and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
15 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 2
Independent Auditors Report Responsibilities of Management for the Financial Statements The Universitys management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Universitys ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditors Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and GAGAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and GAGAS, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit.
x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Universitys internal control. Accordingly, no such opinion is expressed.
x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Universitys ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 16 Independent Auditors Report Re uired Supplementar nformation Accounting principles generally accepted in the United States of America require that the Managements iscussion and Analysis and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards oard who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
ther nformation Management is responsible for the other information included in the annual report. The other information comprises the introductory section and the statistical section but does not include the financial statements and our auditors report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with o ernment Auditing Standards, we have also issued our report dated ovember 2, 2 2, on our consideration of the Universitys internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with o ernment Auditing Standards in considering the Universitys internal control over financial reporting and compliance.
The report on internal control and compliance has been issued under a separate cover in the inancial Statement Audit Report of orth Carolina State University published by this office.
ave oliek, State Auditor Raleigh, orth Carolina ovember 2, 2 2
17 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT
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2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 18
19 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSIT Y MANAGEMENTS DISCUSSION AND ANALYSIS Introduction Managements Discussion and Analysis of the "nancial report provides an overview of the accompanying basic "nancial statements. It includes comparative "nancial analysis with discussion of signi"cant changes from the prior year. The over-view also includes information on currently known facts, decisions, or conditions affecting the "nancial affairs of the North Carolina State University (University).
As of July 1, 2024, a change in the accounting principle resulting from GASB Implementation Guide 2021-1, Section 5.1, affected the Universitys reporting treatment of assets below its capitalization thresholds. This change required a beginning balance restatement for the "scal year 2024. For further information on accounting policy changes see Note 1. Per GASB Statement No. 100, Accounting Changes and Error Corrections - an Amendment of GASB Statement No. 62, prior periods presented in the Managements Discussion and Analysis section should not be restated for a change in accounting prin-ciples or a change to or within the "nancial reporting entity. Therefore, "scal year 2023 balances were not restated in this section which may affect the comparability between "scal years. For further information on restated balances see Note 6, which provides a detailed breakout of Capital Assets, and Note 21, which provides information on the restatement.
Financial Highlights The Universitys net position increased by $257.4 million or 16.5% to $1.82 billion in "scal year 2024. Net position represents the Universitys equity. It is the residual of all the other elements of the statement of "nancial position, the assets and de-ferred out"ows of resources less liabilities and deferred in"ows of resources.
Revenues (Operating and Nonoperating) increased by $193.4 million or 10.0%, to $2.12 billion in "scal year 2024. Rev-enues represent amounts received or accrued that are either operating or nonoperating on the accompanying "nancial statements. Revenue growth is explained by signi"cant growth in state appropriations, research contract and grants, sales and services due to moderate enrollment growth, investment income and the Universitys strong research capabilities and ability to attract external funding.
Expenses increased 14.8% in 2024, up $256.3 million over "scal year 2023 expenses. Expenses represent amounts paid or accrued for operating or nonoperating purposes. The largest increases were in Instruction, Research and Auxiliaries re"ect-ing investments in faculty, highlighting the Universitys commitment to advancing knowledge and innovation.
Using the Financial Statements The Universitys "nancial statements are prepared in accordance with generally accepted accounting principles as pre-scribed by the Governmental Accounting Standards Board (GASB), which establishes standards for external "nancial report-ing for public colleges and universities. The University presents two sets of fund "nancial statements, 1) proprietary fund "nancial statements, which account for the Universitys primary activities and 2) "duciary fund "nancial statements, which account for the Universitys custodial funds. See Note 1J for additional information regarding the Universitys "duciary activities. Managements discussion and analysis concentrates on the Universitys Statement of Net Position and the State-ment of Revenues, Expenses, and Changes in Net Position as condensed comparative "nancial information is not required for "duciary activities.
The University is a constituent institution of the multi-campus University of North Carolina System, which is a component unit of the State of North Carolina and an integral part of the States Annual Comprehensive Financial Report. The University blends two component units as if they were part of the University, and two entities are reported as discretely presented component units based on the nature and signi"cance of their relationship to the University. Note 1A provides detailed information on the Universitys "nancial reporting entity.
The Universitys three "nancial statements are used to evaluate "nancial position as of June 30th and the results of opera-tions for the "scal year then ended. The Statement of Net Position provides information relative to the evaluation of "nancial position. The Statement of Revenues, Expenses, and Changes in Net Position provides information relative to the evaluation of the results of operations. Its ending net position agrees to the total net position on the Statement of Net Position.
The "nancial statements also include a Statement of Cash Flows. This statement is used to identify the Universitys sources and uses of cash. The ending cash on the Statement of Cash Flows agrees to the total cash reported on the Statement of Net Position. Also, this statement reconciles the net operating loss reported in the Statement of Revenues, Expenses, and Changes in Net Position to the net cash used by operating activities.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 20 In using the "nancial statements, the Notes to the Financial Statements accompanying the "nancial statements should be read in conjunction with the "nancial statements. The notes provide information regarding the signi"cant accounting principles applied in the "nancial statements, authority for and associated risk of deposits and investments, detailed in-formation on long-term liabilities, detailed information on accounts receivable, accounts payable, revenues and expenses, required information on pension plans and other postemployment bene"ts, insurance against losses, commitments and contingencies, and accounting changes. If necessary, the disclosures include a discussion of adjustments to prior periods and events subsequent to the Universitys "nancial statement period. Overall, these disclosures provide information to bet-ter understand details, risk, and uncertainty associated with amounts reported in the "nancial statements.
Comparative Condensed Financial Statement Information Statement of Net Position The Statement of Net Position provides information regarding the Universitys assets, deferred out"ows and in"ows of resources, liabilities, and net position as of June 30, 2024. Asset and liability balances are classi"ed as either current or noncurrent. Assets classi"ed as current are those that are available to pay current liabilities or current year expenditures.
Liabilities classi"ed as current are those that are due and payable in the next "scal year. The net position balances are classi"ed as either net investment in capital assets, restricted or unrestricted. In addition, net position balances classi"ed as restricted are classi"ed as either nonexpendable or expendable. Overall, the Statement of Net Position provides information to evaluate the "nancial strength of the University and its ability to meet current and long-term obligations.
The following is a comparative analysis on the condensed balances reported in the Statement of Net Position as of June 30, 2024 and as of June 30, 2023.
2024 2023 Changes Assets Current Assets 694,538,335 669,997,415 24,540,920 Capital Assets, Net 2,428,926,654 2,333,731,329 95,195,325 Other Noncurrent Assets 1,094,433,917 860,568,990 233,864,927 Total Assets 4,217,898,906 3,864,297,734 353,601,172 Deferred Out"ows of Resources Deferred Out"ows Related to Asset Retirement Obligations 14,190,857 13,981,484 209,373 Deferred Out"ows Related to Pensions 227,021,323 195,014,238 32,007,085 Deferred Out"ows Related to OPEB 219,933,558 174,304,939 45,628,619 Total Deferred Out"ows of Resources 461,145,738 383,300,661 77,845,077 Liabilities Current Liabilities 244,049,205 209,656,526 34,392,679 Noncurrent Liabilities Long-Term Liabilities 2,192,883,476 1,901,018,588 291,864,888 Other Noncurrent Liabilities 72,618,604 73,220,950 (602,346)
Total Liabilities 2,509,551,285 2,183,896,064 325,655,221 Deferred In"ows of Resources Deferred In"ows Related to Pensions 8,387,565 13,626,433 (5,238,868)
Deferred In"ows Related to OPEB 310,913,156 455,968,918 (145,055,762)
Deferred In"ows for Leases 31,328,105 32,628,909 (1,300,804)
Total Deferred In"ows of Resources 350,628,826 502,224,260 (151,595,434)
Net Position Net Investment in Capital Assets 1,790,870,115 1,704,341,577 86,528,538 Restricted Nonexpendable 207,186,510 188,508,808 18,677,702 Expendable 555,639,849 506,613,548 49,026,301 Unrestricted (734,831,941)
(837,985,862) 103,153,921 Total Net Position 1,818,864,533 1,561,478,071 257,386,462
21 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT The following graph illustrates the assets, deferred out"ows, liabilities, deferred in"ows and net position of the University as of June 30, 2024 as compared to June 30, 2023 balances.
Assets totaled $4.22 billion, an increase of $353.6 million over the prior year. Current assets increased by $24.5 million in "scal year 2024. Receivables increased $23.1 million due to increases in general accounts receivable and contracts and grants overhead receipts. Restricted cash and cash equivalents increased $19.6 million mainly due to increases in capital projects, contracts and grants overhead and gifts. Cash and cash equivalents decreased $12.8 million primarily due to reinvesting the previous years liquidation of investments back to the Investment Fund. This was offset by increases in contracts and grants, overhead receipts and auxiliaries having more cash on hand.
The increase in net capital assets of $95.2 million is due to increases in construction in progress (CIP), buildings and equipment offset by annual depreciation and amortization. See the capital assets section below for more details.
Other noncurrent assets increased $233.9 million in "scal year 2024. Noncurrent restricted cash increased $107.1 million primarily due to construction projects and unexpended bond proceeds related to 2024A and 2024B bond issuance.
Endowment investments increased $59.7 million due to unrealized and realized gains relating to market "uctuations. Other investments increased $68.7 million primarily due to the reinvestment of liquidated funds from the prior year as well as an increase in unrealized gains.
The deferred out"ows of resources for the Universitys asset retirement obligations, the deferred out"ows for pensions and deferred out"ows for other postemployment bene"ts (OPEB) are shown in a separate section of the "nancial statements.
The deferred out"ow for the asset retirement obligation is the Universitys obligation and cost to retire the nuclear reactor on campus. The deferred out"ows for pensions and OPEB accounts re"ect the Universitys allocated portion of deferred out"ows for the Teachers and State Employees Retirement System (TSERS) cost-sharing pension plan and the States OPEB plans. Amounts in these accounts are amortized over time as pension and OPEB expenses. Deferred out"ows of resources increased $77.8 million in the current year primarily relating to pension and OPEB. The $32.0 million increase in the deferred out"ows of pensions and the $45.6 million increase in deferred out"ows of OPEBs are due to changes in the pension and OPEB rate of return on investments in the plans as well as changes in assumptions and the Universitys proportionate share of contributions to the plans.
Liabilities totaled $2.51 billion, an increase of $325.7 million over the prior year. Current liabilities totaled $244.0 million and increased by $34.4 million. These liabilities include accounts payable and accrued liabilities, payables to other entities, unearned revenue, interest payable, leases payable, subscription payables, employee bene"ts payables and the current portion of University debt. Unearned revenue increased $13.8 million due to increases in football tickets sales and contract and grants. Accounts payable increased $9.9 million primarily due to increase in construction payables. The remaining $10.7 million increase is due primarily to increases in the current portion of bonds payable and subscription liabilities.
Noncurrent liabilities totaled $2.27 billion, and include deposits payable, funds held for other entities, unearned revenue, and long-term liabilities. The primary factor in the $291.3 million increase in noncurrent liabilities was due to the net OPEB liability increase of $131.4 million and the increase of $56.6 million in the net pension liability for the TSERS plan, which was the result of the difference between the projected, and actual investment earnings and assumption changes in both plans.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 22 Revenue bonds and bonds from direct placements increased $114.2 million primarily due to the 2024A and 2024B debt issuances for construction of the Integrated Sciences Building and purchase and renovation of University Towers.
Deferred in"ows for pensions, deferred in"ows for OPEB, and deferred in"ows for leases are shown in a separate section in the "nancial statements. The $151.6 million net decrease in deferred in"ows for pension, OPEB and leases is driven primarily by the change in pension and OPEB liabilities related to the difference between projected and actual investment earnings and assumption changes. These deferred in"ows for pensions and OPEB are amortized over time as pension expense and OPEB expense.
Net position totaled $1.82 billion, an increase of $257.4 million over the prior year. The negative unrestricted net position balance decreased by $103.2 million mainly due to "uctuations in Pension and OPEB reporting. Net investment in capital assets increased $86.5 million due to increases in capital projects. Restricted nonexpendable net position increased $18.7 million, driven mainly by the increase in gifts for professorships and the State matching for professorships. Restricted expendable net position increased $49.0 million, driven mainly by increases in investment returns and the completed funding of new professorships.
As reported in Note 11, the total impact from reporting the OPEB and pension plan obligations at June 30, 2024 was a negative $1.26 billion. The difference between the net effect amount reported in Note 11 and the unrestricted net position reported on the "nancial statements (a de"cit of $734.8 million) is a positive $521.3 million. This positive difference represents unrestricted funds held by the University in its institutional trust, special, debt, and investment funds, as well as any unrestricted funds held by the Universitys blended component units.
The Universitys current assets are more than suf"cient to cover current liabilities, with a ratio of 2.8 times compared to 3.2 times in the prior year. The Universitys total assets are more than the Universitys liabilities with a ratio 1.7 times as compared to 1.8 times in the prior year. These "nancial ratios are indicators of the Universitys "nancial strength and its ability to meet current and long-term obligations.
23 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Statement of Revenues, Expenses, and Changes in Net Position The Statement of Revenues, Expenses, and Changes in Net Position provides information regarding the Universitys activi-ties for the year ended June 30, 2024. The activity balances are classi"ed as operating, nonoperating, or other revenues, expense, gains or losses. Activities classi"ed as operating include all revenues of the University except those considered nonoperating, or those associated with funds received to enhance capital assets or permanent endowments. Operating ex-penses are all expenses except those related to interest expense on "nancing activities, loss on disposal of capital assets, and investment expenses (shown as net against investment income). Activities classi"ed as nonoperating include state ap-propriations, noncapital contributions, investment income (net of investment expenses), and gains or losses on disposal of capital assets. Activities classi"ed as other include capital appropriations, capital contributions and additions to permanent endowments. Overall, the Statement of Revenues, Expenses, and Changes in Net Position provides information to evaluate the Universitys management of operations and maintenance of "nancial strength.
The following is a comparative analysis on the condensed balances reported in the Statement of Revenues, Expenses, and Changes in Net Position for the "scal years ended June 30, 2024, and June 30, 2023.
2024 2023 Changes Operating Revenues Student Tuition and Fees, Net 382,028,940 366,610,051 15,418,889 Federal Appropriations 23,509,984 24,639,771 (1,129,787)
Grants and Contracts 419,213,467 373,021,010 46,192,457 Sales and Services, Net 345,722,620 316,646,728 29,075,892 Other, Net 25,780,207 18,820,026 6,960,181 Total Operating Revenues 1,196,255,218 1,099,737,586 96,517,632 Operating Expenses Salaries and Bene"ts 1,216,561,721 984,595,986 231,965,735 Supplies and Services 503,314,385 490,825,653 12,488,732 Scholarships and Fellowships 55,645,018 56,703,060 (1,058,042)
Utilities 37,160,030 36,365,574 794,456 Depreciation/Amortization 153,764,780 140,792,578 12,972,202 Total Operating Expenses 1,966,445,934 1,709,282,851 257,163,083 Operating Loss (770,190,716)
(609,545,265)
(160,645,451)
Nonoperating Revenues (Expenses)
State Appropriations 658,859,310 616,310,706 42,548,604 Student Financial Aid 51,058,268 56,973,498 (5,915,230)
Other Noncapital Aid and Contributions 116,975,831 129,162,020 (12,186,189)
Investment Income, Net 96,356,061 18,141,151 78,214,910 Interest and Fees on Debt (17,744,195)
(18,654,774) 910,579 Other 1,358,166 7,102,030 (5,743,864)
Net Nonoperating Revenues 906,863,441 809,034,631 97,828,810 Income Before Other Revenues 136,672,725 199,489,366 (62,816,641)
Capital Appropriations and Contributions 82,032,724 67,127,187 14,905,537 Additions to Endowments 18,376,294 5,601,709 12,774,585 Increase in Net Position 237,081,743 272,218,262 (35,136,519)
Prior Period Restatement 20,304,719 20,304,719 Beginning Net Position 1,561,478,071 1,289,259,809 272,218,262 Ending Net Position
$ 1,818,864,553
$ 1,561,478,071 257,386,462 Fiscal year 2023-2024 total revenues are $2,221,271,872 and total expenses are $1,984,190,129.
Fiscal year 2022-2023 total revenues are $2,000,155,887 and total expenses are $1,727,937,625.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 24 OPERATING AND NONOPERATING REVENUES OPERATING AND NONOPERATING EXPENSES Operating and Nonoperating Activities The following illustrates the relationships of operating and nonoperating revenue sources and expense functions to total revenues/expenses for the "scal year 2024 and 2023, and the consistency of relationships between the two years.
Title
% to Total 2024
% to Total 2023 Instruction 29%
28%
Research 19%
19%
Public Service 8%
7%
Auxiliary Enterprises 12%
12%
Operations & Maintenance of Plant 5%
5%
Academic Support 6%
6%
Institutional Support 7%
7%
Depreciation/Amortization 8%
9%
Student Financial Aid 3%
4%
Student Services 2%
2%
Other 1%
1%
Total 100%
100%
Title
% to Total 2024
% to Total 2023 State Appropriations 32%
32%
Research Contracts and Grants 20%
19%
Student Tuition and Fees, Net 18%
19%
Sales and Services, Net 16%
17%
Noncapital Aid and Contributions 8%
10%
Federal Appropriations 1%
1%
Other, Net 5%
2%
Total 100%
100%
25 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT The following graphs illustrate the Universitys operating and nonoperating revenues/expenses by source/function (in thou-sands).
OPERATING AND NONOPERATING REVENUES OPERATING AND NONOPERATING EXPENSES
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 26 Total revenues (operating, nonoperating, and other) increased $221.1 million or 11.1% compared to the prior year. Operat-ing revenue increased $96.5 million mainly due to increases in sales and services of $29.1 million and tuition and fees of
$15.4 million related to an enrollment increase. Research contracts and grants increased by $46.2 million, primarily due to increases in grants in College of Agriculture and Life Sciences, College of Sciences and College of Engineering from the Department of Defense, the Department of Health and Human Services and the National Science Foundation. Other oper-ating revenue increased $7.0 million due to increases in rental income and patent royalties. Nonoperating revenue increased
$96.9 million mainly due to increases in investment income of $78.2 million due to market gains, increases in state appro-priations of $42.5 million due to enrollment, and noncapital contributions increased by $10.7 million mainly due to increases in gifts from foundations. Other nonoperating revenue decreased $5.7 million mainly due to an insurance recovery received in 2023 and not applicable in 2024 and COVID-19 revenue decreased by $22.9 million due to the ending of related federal and state relief programs. Other revenue increased $27.7 million mainly due to increases in capital contributions of $15.3 million due to increases in gifts to Athletics and increases in additions to endowments of $12.8 million.
Total expenses (operating and nonoperating) increased $256.3 million or 14.8% compared to the prior year. Salaries and bene"ts increased $232.0 million due to increases in staf"ng levels, including the addition of 59 faculty members. Addi-tional salary and bene"ts expenses were attributable to raises, including a 4% legislative increase and increases in pension and OPEB expenses. Supplies and services increased $12.5 million primarily driven by a $30.6 million increase in services relating to travel and service contracts re"ecting continued investment in faculty and support programs offset by a $11.8 million decrease in supplies and materials due to additional capitalizations in the areas of instruction and auxiliaries. These capitalizations were the result of changing accounting policy as noted previously. Depreciation and amortization increased
$13.0 million primarily due to increases in depreciable capital assets by $167.8 million throughout the "scal year as noted in the table below.
Capital Assets As shown in the following table, the University increased its net capital assets by $95.2 million or 4.08% during "scal year 2024 compared to 2023.
2024 2023 Changes Land and Permanent Easements 91,143,279 $
78,434,278 $
12,709,001 Construction in Progress 143,163,318 79,515,722 63,647,596 Computer Software in Development 1,637,277 1,492,702 144,575 Buildings 2,834,903,442 2,767,366,435 67,537,007 Machinery and Equipment 564,119,001 492,072,585 72,046,416 General Infrastructure 318,599,977 311,852,068 6,747,909 Computer Software 51,901,249 44,384,539 7,516,710 Right-to-Use Leased Buildings 113,142,829 107,817,361 5,325,468 Right-to-Use Leased Machinery and Equipment 18,645,389 18,691,593 (46,204)
Right-to-Use Subscription Assets 16,155,637 7,484,409 8,671,228 Total Capital Assets 4,153,411,398 3,909,111,692 244,299,706 Accumulated Depreciation/Amortization (1,724,484,744)
(1,575,380,363))
(149,104,381)
Net Capital Assets 2,428,926,654 $
2,333,731,329 95,195,325 During "scal year 2024, the University continued construction on new facilities and work on renovations to modernize the campus. Funding for these improvements came from funds provided by University debt "nancing and other capital funding from the State of North Carolina. For details on outstanding commitments on construction contracts see Note 17.
Several large capital projects were completed during "scal year 2024. Among these projects is the addition of a new state-of-the-art dairy barn for the College of Veterinary Medicine. This new dairy facility is the peak of ef"ciency, with a waste-disposal system, hydraulic gates, data-collecting technology and room to double the milking capacity and triple the observa-tion space for students. Additionally, a new football videoboard was added. It is one of the largest collegiate videoboards (43 feet tall and 166 feet wide) and will allow for a new graphic layout, statistics and experience for fans. Also, in "scal year 2024 a renovation of Ricks Hall was completed which will address de"cient building systems including sprinkler system, lighting/power, plumbing, and HVAC, and will provide new areas for the Department of Agricultural & Human Sciences.
Additionally, during "scal year 2024, University Housing purchased University Towers and the adjacent parking deck for
$29.6 million. This purchase will help the University to achieve the goals of providing space for growing "rst year classes and provide more on-campus housing for other populations.
27 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Machinery and equipment increased primarily due to the University implementing GASB Implementation Guide 2021-1, as noted in the Introduction section, which changed the accounting policy for capitalizing group purchases that were sig-ni"cant in aggregate but individually were below the capitalization threshold. Additional information can be found in Note 6 and Note 21. Also, there was an increase in equipment purchases for research and academic programs, including computer servers and data storage.
Long-Term Debt Activities The University incurs long-term debt to "nance construction projects and to purchase or lease equipment. As shown in the following table, the University increased its long-term debt during "scal year 2024.
2024 2023 Changes Revenue Bonds and Bonds from Direct Placements 605,768,749 $
486,460,960 $
119,307,789 Notes from Direct Borrowings 33,533,006 40,133,591 (6,600,585)
Total Long-Term Debt 639,301,755 $
526,594,551 $
112,707,204 Long-term debt increased $112.7 million or 21.4%, due to new debt issuance for construction of Integrated Sciences Build-ing (ISB) and purchase and renovation of University Towers (UT) which was offset by regular principal payments.
Economic Factors That Will Affect the Future NC State University is the largest public university provider in the State of North Carolina and remains "nancially sound with a diversi"ed base of revenues, comprising "ve major sources: these include tuition and fees, state appropriations, grants and contracts, gifts and endowment income, and sales and services. Almost 2,300 jobs were created by the Universitys efforts in economic development during the last "scal year. The Universitys legacy of groundbreaking research and innova-tion is a cornerstone of its reputation. The Universitys ability to secure research grants, foster collaborations with industry partners, and drive technological advancements will continue to be a driving force for economic growth in the region.
The State budget for the current biennium ("scal years 2024 and 2025) was rati"ed by the NC General Assembly and be-came law in October 2023. The State of North Carolina provides signi"cant operational support in the form of annual state appropriations, and multi-year capital support to the University. State appropriations for operations increased in "scal year 2024 primarily for academic affairs. The enacted biennial budget also provided a 7% salary increase for State employees over the two-year budget and signi"cant capital support for major renovations and new buildings on campus. In "scal year 2022, the NC General Assembly initiated a multi-year funding plan for the Engineering NCs Future initiative. This initiative supports the Universitys growth in the engineering and computer science program by 4,000 students. In addition, the NC General Assembly funded the College of Veterinary Medicines class size expansion as part of the biennial budget.
The Universitys ability to attract and retain a student population, encompassing undergraduates, graduates, and non de-gree-seeking students, signi"cantly impacts its academic and "nancial health. For the fall semester, as of September 2024, the University enrolled more than 38,400 students. For the "fth consecutive year, the University welcomed a record-setting fall class, with 5,839 "rst-year students. The UNC System remains committed to affordability and access, and the Universitys low student tuition and fees continue to result in high demand and a consistent rating as one of the nations best values in higher education. The University implemented a Fixed Tuition Program as required by North Carolina General Statute § 116-143.9. Beginning with the fall semester 2016, tuition rates at UNC institutions were "xed for eight consecu-tive semesters for all resident bachelors degree-seeking freshmen. In addition, the University has not increased resident undergraduate tuition for eight consecutive years. Mandatory student fees are subject to a 3% annual cap on increases.
However, mandatory fees have decreased slightly over the past "ve years with the expiration of some debt service fees.
The Universitys total student charges make it one of the nations largest, most affordable land grant institutions.
Investments in infrastructure, including capital projects, are linchpins for academic excellence and research capabilities.
Modernized classrooms, state-of-the-art research facilities, and enhanced student amenities create an environment con-ducive to innovation and learning. The University closed "scal year 2024 with an endowment of approximately $2.2 billion.
With the growth of endowment, the annual endowment spending provided by the endowment grew by $6.1 million be-tween "scal years 2024 and 2025, from $71.3 million to $77.4 million of annual support.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 28 The University has capitalized on the momentum of the Think and Do The Extraordinary Campaign to post its second-best fundraising year in "scal year 2024, bucking industry trends to raise $241 million from an increasing number of donors.
Further evidence of our fundraising success can be found with our annual Day of Giving in March 2024 raising over $46 million and with a record-breaking 21,920 gifts. This is positioning the University as one of the top in the nation for Day of Giving initiatives. In addition, the University has made signi"cant progress on multiple capital projects across campus and successfully issued General Revenue Bond Series 2024A and 2024B in the spring of 2024 to support the Universitys Physical Master Plan.
The University is an engine for research and innovation, and the world continues to take notice. Highlights for "scal year 2024 include over $500 million in sponsored research awards and over $2 billion in research proposals submitted. The University is fueling the economy with over 90 startups and spin offs based on NC State research, more than $1.7 billion in "nancing raised by University startups, and over 75 partners on our Centennial Campus. Research at the University is poised for the future and will continue to be a source of pride and innovation. Fiscal year 2023-2024 is the third year of the Universitys new strategic plan, Wolfpack 2030: Powering the Extraordinary and information about the goals and initia-tives can be found here: https://strategicplan.ncsu.edu/current-plan/wolfpack-2030-powering-the-extraordinary/.
29 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT UNIVERSITY FINANCIAL STATEMENTS NORTH CAROLINA STATE UNIVERSITY 2024 ANNUAL FINANCIAL REPORT
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 30 NORTH CAROLINA STATE UNIVERSITY Statement of Net Position Proprietary Fund Exhibit A-1 June 30, 2024 Page 1 of 2 ASSETS Current Assets:
Cash and Cash Equivalents 332,592,722 Restricted Cash and Cash Equivalents 199,913,948 Receivables, Net (Note 5) 126,257,285 Due from Primary Government 19,479,095 Due from State of North Carolina Component Units 5,269,769 Inventories 7,806,160 Notes Receivable, Net (Note 5) 1,125,595 Leases Receivable 2,093,761 Total Current Assets 694,538,335 Noncurrent Assets:
Restricted Cash and Cash Equivalents 260,600,488 Endowment Investments 585,591,767 Other Investments 215,839,278 Notes Receivable, Net (Note 5) 1,120,390 Leases Receivable 30,281,994 Capital Assets - Nondepreciable (Note 6) 235,943,874 Capital Assets - Depreciable, Net (Note 6) 2,192,982,780 Total Noncurrent Assets 3,523,360,571 Total Assets 4,217,898,906 DEFERRED OUTFLOWS OF RESOURCES Deferred Out"ows Related to Asset Retirement Obligations 14,190,857 Deferred Out"ows Related to Pensions (Note 14) 227,021,323 Deferred Out"ows Related to Other Postemployment Bene"ts (Note 15) 219,933,558 Total Deferred Out"ows of Resources 461,145,738 LIABILITIES Current Liabilities:
Accounts Payable and Accrued Liabilities (Note 7) 68,971,660 Due to Primary Government 14,555,952 Due to State of North Carolina Component Units 1,778,798 Unearned Revenue 95,924,755 Interest Payable 5,585,434 Long-Term Liabilities - Current Portion (Note 9) 57,232,606 Total Current Liabilities 244,049,205 Noncurrent Liabilities:
Deposits Payable 6,000,475 Funds Held for Others 3,190,260 Unearned Revenue 62,845,161 U.S. Government Grants Refundable 582,708 Long-Term Liabilities, Net (Note 9) 2,192,883,476 Total Noncurrent Liabilities 2,265,502,080 Total Liabilities 2,509,551,285 DEFFERED INFLOWS OF RESOURCES Deferred In"ows Related to Pensions (Note 14) 8,387,565 Deferred In"ows Related to Other Postemployment Bene"ts (Note 15) 310,913,156 Deferred In"ows for Leases 31,328,105 Total Deferred In"ows of Resources 350,628,826
31 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY Statement of Net Position Proprietary Fund Exhibit A-1 June 30, 2024 Page 2 of 2 NET POSITION Net Investment in Capital Assets 1,790,870,115 Restricted Nonexpendable:
Scholarships and Fellowships 15,275,453 Endowed Professorships 178,104,260 Departmental Uses 11,582,597 Loans 2,224,200 Total Restricted-Nonexpendable Net Position 207,186,510 Expendable:
Scholarships and Fellowships 56,448,525 Research 38,661,558 Endowed Professorships 208,620,729 Departmental Uses 120,642,286 Loans 940,736 Capital Projects 118,288,411 Debt Service 12,037,604 Total Restricted-Expendable Net Position 555,639,849 Unrestricted (734,831,941)
Total Net Position 1,818,864,533 The accompanying notes to the "nancial statements are an integral part of this statement.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 32 NORTH CAROLINA STATE UNIVERSITY Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund For the Fiscal Year Ended June 30, 2024 Exhibit A-2 OPERATING REVENUES Student Tuition and Fees, Net (Note 12) 382,028,940 Federal Appropriations 23,509,984 Federal Grants and Contracts 243,978,679 State and Local Grants and Contracts 54,177,267 Nongovernmental Grants and Contracts 121,057,521 Sales and Services, Net (Note 12) 345,722,620 Interest Earnings on Loans 105,827 Other Operating Revenues, Net (Note 12) 25,674,380 Total Operating Revenues 1,196,255,218 OPERATING EXPENSES Salaries and Bene"ts 1,216,561,721 Supplies and Services 503,314,385 Scholarships and Fellowships 55,645,018 Utilities 37,160,030 Depreciation/Amortization 153,764,780 Total Operating Expenses 1,966,445,934 Operating Loss (770,190,716)
NONOPERATING REVENUES (EXPENSES)
State Appropriations 658,859,310 Student Financial Aid 51,058,268 Federal Aid - COVID-19 1,571,205 Noncapital Contributions 115,404,626 Investment Income (Net of Investment Expense of $7,868,502) 93,356,061 Interest and Fees on Debt (17,744,195)
Other Nonoperating Expenses 1,358,166 Net Nonoperating Revenues 906,863,441 Income Before Other Revenues 136,672,725 Capital Contributions 82,032,724 Additions to Endowments 18,376,294 Total Other Revenues 100,409,018 Increase in Net Position 237,081,743 NET POSITION Net Position - July 1, 2023, as Restated (Note 21) 1,581,782,790 Net Position - June 30, 2024 1,818,864,533 The accompanying notes to the "nancial statements are an integral part of this statement.
33 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY Statement of Cash Flows Proprietary Fund For the Fiscal Year Ended June 30, 2024 Exhibit A-3 Page 1 of 2 CASH FLOWS FROM OPERATING ACTIVITIES Received from Customers 1,163,121,253 Payments to Employees and Fringe Bene"ts (1,250,979,698)
Payments to Vendors and Suppliers (534,341,852)
Payments for Scholarships and Fellowships (55,645,018)
Loans Issued (15,305)
Collection of Loans 943,000 Interest Earned on Loans 109,305 William D. Ford Direct Lending Receipts 110,368,317 William D. Ford Direct Lending Disbursements (110,241,313)
Related Activity Agency Receipts 69,464,336 Related Activity Agency Disbursements (69,637,401)
Other Receipts 24,141,479 Net Cash Used by Operating Activities (652,712,897)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES State Appropriations 658,859,310 Student Financial Aid 51,058,268 Federal Aid - COVID-19 1,571,205 Noncapital Contributions 109,954,003 Additions to Endowments 18,376,294 Net Cash Provided by Noncapital Financing Activities 839,819,080 CASH FLOWS FROM CAPITAL FINANCING AND RELATED FINANCING ACTIVITIES Proceeds from Capital Debt 142,626,264 Capital Contributions 82,669,950 Proceeds from Sale of Capital Assets 4,493 Proceeds from Insurance on Capital Assets 6,958,571 Proceeds from Lease Arrangements 2,864,079 Acquisition and Construction of Capital Assets (209,831,070)
Principal Paid on Capital Debt and Lease/Subscription Liabilities (47,427,262)
Interest and Fees Paid on Capital Debt and Lease/Subscription Liabilities (19,003,951)
Net Cash Used by Capital Financing and Related Financing Activities (41,139,226)
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from Sales and Maturities of Investments 289,003,504 Investment Income 32,626,847 Purchase of Investments and Related Fees (353,729,776)
Net Cash Provided by Investing Activities (32,099,425)
Net Increase in Cash and Cash Equivalents 113,867,532 Cash and Cash Equivalents - July 1, 2023 679,239,626 Cash and Cash Equivalents - June 30, 2024 793,107,158
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 34 NORTH CAROLINA STATE UNIVERSITY Statement of Cash Flows Proprietary Fund Exhibit A-3 For the Fiscal Year Ended June 30, 2024 Page 2 of 2 RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES Operating Loss (770,190,716)
Adjustments to Reconcile Operating Loss to Net Cash Used by Operating Activities:
Depreciation/Amortization Expense 153,764,780 Lease Income (Amortized Deferred In"ows of Resources)
(1,788,413)
Other Nonoperating Expenses (5,078,781)
Changes in Assets and Deferred Out"ows of Resources:
Receivables, Net (22,974,852)
Due from Primary Government 6,867,101 Inventories (654,825)
Notes Receivable, Net 970,045 Deferred Out"ows Related to Asset Retirement Obligations (209,373)
Deferred Out"ows Related to Pensions (32,007,085)
Deferred Out"ows Related to Other Postemployment Bene"ts (45,628,619)
Changes in Liabilities and Deferred In"ows of Resources Accounts Payable and Accrued Liabilities 5,237,875 Due to Primary Government 1,109,324 Due to State of North Carolina Component Units 846,082 Funds Held for Others (173,065)
Unearned Revenue 12,220,592 Net Pension Liability 56,634,772 Net Other Postemployment Bene"ts Liability 132,767,506 Pollution Remediation Payable (505,565)
Asset Retirement Obligation 573,241 Compensated Absences 4,281,467 Deposits Payable 2,083,395 Workers Compensation Liability (563,153)
Deferred In"ows Related to Pensions (5,238,868)
Deferred In"ows Related to Other Postemployment Bene"ts (145,055,762)
Net Cash Used by Operating Activities (652,712,897)
NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Assets Acquired through the Assumption of a Liability 19,196,195 Assets Acquired through a Gift 1,353,335 Change in Fair Value of Investments 63,647,258 Loss on Disposal of Capital Assets (1,822,429)
Amortization of Bond Premiums (1,920,291)
Increase in Receivables Related to Nonoperating Income 3,839,866 Increase in Payables Related to Nonoperating/Other Revenues 661,699 Decrease in Net Other Postemployment Bene"ts Liability Related to Noncapital Contributions (1,334,817)
The accompanying notes to the "nancial statements are an integral part of this statement.
35 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY Statement of Fiduciary Net Position Fiduciary Funds - Custodial Funds June 30, 2024 Exhibit B-1 External Investment Total Custodial Pool Funds Other Funds Funds ASSETS Cash and Cash Equivalents 15,953,435 15,953,435 Investments (Note 2):
Intermediate Investments 25,144,018 25,144,018 Long-Term Investments 517,580,306 517,580,306 Total Assets 542,724,324 15,953,435 558,677,759 DEFERRED OUTFLOWS OF RESOURCES Total Deferred Out"ows of Resources LIABILITIES Accounts Payable and Accrued Liabilities 44,842 44,842 Total Liabilities 44,842 44,842 DEFERRED INFLOWS OF RESOURCES Total Deferred In"ows of Resources NET POSITION Restricted for:
Pool Participants 542,724,324 542,724,324 Individuals/Af"liated Organizations 15,908,593 15,908,593 Total Fiduciary Net Position 542,724,324 15,908,593 558,632,917 The accompanying notes to the "nancial statements are an integral part of this statement.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 36 NORTH CAROLINA STATE UNIVERSITY Statement of Changes in Fiduciary Net Position Fiduciary Funds - Custodial Funds For Fiscal Year Ended June 30, 2024 Exhibit B-2 External Investment Total Custodial Pool Funds Other Funds Funds ADDITIONS Contributions:
Pool Participants 15,680,135 15,680,135 Individuals/Af"liated Organizations 55,798,508 55,798,508 Total Contributions 15,680,135 55,798,508 71,478,643 Investment Activity:
Investment Income 56,585,015 831,942 57,416,957 Total Additions 72,265,150 56,630,450 128,895,600 DEDUCTIONS Withdrawals and Distributions 20,624,575 72,929,134 93,553,709 Increase (Decrease) in Fiduciary Net Position 51,640,575 (16,298,684) 35,341,891 NET POSITION Net Position - July 1, 2023 491,083,749 32,207,277 523,291,026 Net Position - June 30, 2024 542,724,324 15,908,593 558,632,917 The accompanying notes to the "nancial statements are an integral part of this statement.
37 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT
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2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 38
39 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT COMPONENT UNIT FINANCIAL STATEMENTS NORTH CAROLINA STATE UNIVERSITY 2024 ANNUAL FINANCIAL REPORT
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 40 NORTH CAROLINA STATE UNIVERSITY FOUNDATIONS Statement of Financial Position June 30, 2024 Exhibit C-1 North Carolina The North Carolina State University Agricultural Foundation, Inc.
Foundation, Inc.
ASSETS Cash and Cash Equivalents 44,474,683 26,395,229 Intermediate Investments 32,112,201 41,191,308 Long-Term Investments 639,318,395 171,952,145 Assets Held in Charitable Trusts and Annuities 6,466,529 Donated Property and Land 2,188,500 33,614,687 Receivables, Net 13,781 262,016 Pledges Receivable/Promises 25,201,578 4,899,569 Property and Equipment, Net 5,250,399 151,083 Other Assets 457,642 22,811 Total Assets 755,483,708 278,488,848 LIABILITIES Accounts Payable and Accrued Expenses 521,543 308,915 Due to Others 231,060 70,896 Life Income Funds Payable 8,315,466 4,324,830 Deferred Revenue 11,998,659 Funds Held for Others 51,775 200,814 Total Liabilities 9,119,844 16,904,114 NET ASSETS Without Donor Restrictions 25,143,045 7,551,802 With Donor Restrictions 721,220,819 254,032,932 Total Net Assets 746,363,864 261,584,734 Total Liabilities and Net Assets 755,483,708 278,488,848 The accompanying notes to the "nancial statements are an integral part of this statement.
41 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY FOUNDATIONS Statement of Activities For the Fiscal Year Ended June 30, 2024 Exhibit C-2 North Carolina The North Carolina State University Agricultural Foundation, Inc.
Foundation, Inc.
CHANGES IN NET ASSETS WITHOUT DONOR RESTRICTIONS Revenues and Gains:
Contributions 8,790 $
140,707 Donated Services and Salaries 988,000 2,127,000 Net Investment Income 4,853,191 3,279,736 Other Income 464,158 Net Assets Released from Restrictions: Program or Time Restrictions 49,531,051 23,233,606 Total Revenues and Gains 55,845,190 28,781,049 Expenses:
Scholarships and Fellowships 17,713,637 2,995,049 University Support 18,261,337 13,628,396 Capital Support 768,488 6,140,900 Administrative 227,678 284,000 Fund Raising 14,295,907 2,932,098 Other 953,914 (56,592)
Total Expenses 52,220,961 25,923,851 Increase in Net Assets Without Donor Restrictions 3,624,229 2,857,198 CHANGES IN NET ASSETS WITH DONOR RESTRICTIONS Contributions 31,233,048 13,826,696 Grant Revenue 685,771 Change in Pledges Receivables 2,351,891 2,486,866 Donated Property 152,150 1,626,000 Disposal of Other Assets (9,512)
Net Investment Income 66,088,612 17,927,862 Royalties 115,510 Change in Value of Split Interest Agreements and Trusts (814,226)
(537,099)
Other Income 11,503,365 1,974,725 Net Assets Released from Restrictions: Program or Time Restrictions (49,531,051)
(23,233,606)
Increase in Net Assets With Donor Restrictions 60,983,789 14,863,213 Increase in Net Assets 64,608,018 17,720,411 Net Assets at Beginning of Year 681,755,846 243,864,323 Net Assets at End of Year 746,363,864 $
261,584,734 The accompanying notes to the "nancial statements are an integral part of this statement.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 42
43 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT INDEX TO THE NOTES TO THE FINANCIAL STATEMENTS 44 49 53 55 56 57 58 58 59 62 64 64 65 65 69 76 77 78 79 81 81 82 Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Note 13 Note 14 Note 15 Note 16 Note 17 Note 18 Note 19 Note 20 Note 21 Note 22 Signi"cant Accounting Policies Deposits and Investments Fair Value Measurements Endowment Investments Receivables Capital Assets Accounts Payable and Accrued Liabilities Short-Term Debt Long-Term Liabilities Leases Net Position Revenues Operating Expenses by Function Pension Plans Other Postemployment Bene"ts Risk Management Commitments and Contingencies Related Parties Blended Component Units Changes in Financial Accounting and Reporting Net Position Restatement Discretely Presented Component Units
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 44 A.
Financial Reporting Entity - The concept underlying the de"nition of the "nancial reporting entity is that elected of"cials are accountable to their constituents for their actions. As required by accounting principles generally accepted in the United States of America (GAAP), the "nancial reporting entity includes both the primary government and all of its component units. An organization other than a primary government serves as a nucleus for a reporting entity when it issues separate "nancial statements. North Carolina State University (University) is a constituent institution of the multi-campus University of North Carolina System, which is a component unit of the State of North Carolina and an integral part of the States Annual Comprehensive Financial Report.
The accompanying "nancial statements present all funds belonging to the University and its component units. While the Board of Governors of the University of North Carolina System has ultimate responsibility, the Chancellor, the Board of Trustees, and the Board of Trustees of the Endowment Fund have delegated responsibilities for "nancial accountability of the Universitys funds. The Universitys component units are either blended or discretely presented in the Universitys "nancial statements. See below for further discussion of the Universitys component units. Other related foundations and similar nonpro"t corporations for which the University is not "nancially accountable are not part of the accompanying "nancial statements.
Blended Component Units - Although legally separate, the NC State Investment Fund, Inc. (Investment Fund) and the NC State University Partnership Corporation (Corporation), component units of the University, are reported as if they were part of the University.
The Investment Fund is governed by a board consisting of nine ex of"cio members and nine elected members. The Investment Funds purpose is to support the University by operating an investment fund for charitable, nonpro"t foundations, associations, trusts, endowments, and funds that are organized and operated primarily to support the University. The Investment Fund is a governmental external investment pool. Because the elected directors of the Investment Fund are appointed by the members of the North Carolina State University Board of Trustees and the Investment Funds primary purpose is to bene"t North Carolina State University, its "nancial statements have been blended with those of the University.
The Corporation is governed by a four-member Board of Directors appointed based on their positions held with North Carolina State University. Additional members of the board may be appointed by the Chancellor of North Carolina State University. The Corporations purpose is to support and bene"t the University with the aim of creating new knowledge and improving the lives of the people of North Carolina. The Corporation formed NC State University Centennial Development, LLC on January 25, 2002 to construct, own and operate a golf course located on the North Carolina State University Centennial Campus. In addition, the Corporation formed NC State Up"t, LLC on October 27, 2006 to develop, construct, own, "nance, manage and otherwise up"t facilities and other infrastructure on Centennial Campus. Also, the Corporation formed NC State CBC Land I, LLC on June 1, 2007 to acquire, develop, own, lease, hold, manage, sell, and otherwise exercise all right of ownership of land and "ex lab facilities on Centennial Biomedical Campus. Additionally, the Corporation formed NC State American Home, LLC on August 8, 2007 and changed its name to Bell Tower Holdings LLC on December 14, 2009. The purposes of Bell Tower Holdings LLC are to acquire, develop, own, lease, hold, manage, sell and otherwise exercise all right of ownership of real property and enter into any related agreements for assisting with the acquisition, development, "nancing, construction, management and operation of real property. On March 31, 2008 the Corporation formed NC State CC Holdings I, LLC to acquire, develop, own, lease, hold, manage, sell and otherwise exercise all right of ownership of land and facilities on Centennial Campus. Leaders in Innovation and Nonwovens Commercialization, LLC (LINC), was established on July 9, 2012 to foster economic development and creation of new knowledge by facilitating commercialization of technologies developed at the Nonwovens Institute at NC State University. On September 27, 2016, the Corporation established the Wolfpack Investor Network, LLC (WIN) to connect the NC State alumni network with the NC State entrepreneurial community. C2I, LLC was formed on December 21, 2018 to act as an intermediary between the University and private parties in connection with certain real estate operations, execute innovation space management agreements, and procure resources for enhanced innovation activation and programming. On February 19, 2020, NC State Research, LLC was formed to manage, operate, host and oversee research related operations, unity, activities and initiatives of North Carolina State University faculty, departments, centers and institutes, as well as federal agencies. Because the Corporations Board consists of University employees and members appointed by the Chancellor and its sole purpose is to support and bene"t the University, the Corporation and the LLCs are considered part of the University for "nancial reporting purposes.
Separate "nancial statements for the Investment Fund and for the Corporation and the LLCs may be obtained from the Foundations Accounting and Investments Of"ce, Campus Box 7207, Raleigh, NC 27695, or by calling (919) 513-7149.
Condensed combining information regarding blended component units is provided in Note 19.
Note 1 - Signi"cant Accounting Policies
45 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Discretely Presented Component Units - The North Carolina State University Foundation, Inc. (Foundation) and The North Carolina Agricultural Foundation, Inc. (Agricultural Foundation) are legally separate nonpro"t corporations and are reported as discretely presented component units based on the nature and signi"cance of their relationship to the University.
The Foundation and Agricultural Foundation are legally separate, tax-exempt component units of the University. These entities act primarily as fund-raising organizations to supplement the resources that are available to the University in support of its programs. Separate Boards of Directors govern these entities independent of the Universitys Board of Trustees.
Although the University does not control the timing or amount of receipts from these entities, the majority of resources, or income thereon that these entities hold and invest are restricted to the activities of the University by the donors. Because these restricted resources held by these entities can only be used by, or for the bene"t of the University, these entities are considered component units of the University and are reported in separate "nancial statements because of the difference in their reporting model, as described below.
The Foundation and Agricultural Foundation are private nonpro"t organizations that report their "nancial results under the Financial Accounting Standards Board (FASB) Codi"cation. As such, certain revenue recognition criteria and presentation features are different from the Governmental Accounting Standards Board (GASB) revenue recognition criteria and presentation features. No modi"cations have been made to their "nancial information in the Universitys "nancial reporting entity for these differences.
During the year ended June 30, 2024, the Foundation distributed $39,335,662 to the University for both restricted and unrestricted purposes. Complete "nancial statements for the Foundation can be obtained from the Foundations Accounting and Investments Of"ce, Campus Box 7207, Raleigh, NC 27695, or by calling (919) 513-7149.
During the year ended June 30, 2024, the Agricultural Foundation distributed $23,225,407 to the University for both restricted and unrestricted purposes. Complete "nancial statements for the Agricultural Foundation can be obtained from the Foundations Accounting and Investments Of"ce, Campus Box 7207, Raleigh, NC 27695, or by calling (919) 513-7149.
B.
Basis of Presentation - The accompanying "nancial statements are presented in accordance with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board (GASB). GASB Statement No. 34, Basic Financial Statements - and Managements Discussion and Analysis - for State and Local Governments, as amended by GASB Statement No. 35, Basic Financial Statements - and Managements Discussion and Analysis - for Public Colleges and Universities, and GASB Statement No. 84, Fiduciary Activities, require the presentation of both proprietary and "duciary fund "nancial statements. See below for a description of each fund.
Proprietary Fund - This fund accounts for the Universitys primary activities and is presented in a single column on the accompanying proprietary fund "nancial statements.
Fiduciary Funds - This fund accounts for all of the Universitys "duciary activities, which are considered custodial funds.
These resources are held by the University in a purely custodial capacity on behalf of individuals, af"liated organizations, and other external parties. Custodial funds include the external portion of the NC State Investment Fund as well as resources held on behalf of individuals and other external organizations.
C.
Basis of Accounting - The "nancial statements of the University have been prepared using the economic resource measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred, regardless of the timing of the cash "ows.
Nonexchange transactions, in which the University receives (or gives) value without directly giving (or receiving) equal value in exchange, include state appropriations, certain grants, and donations. Revenues are recognized, net of estimated uncollectible amounts, as soon as all eligibility requirements imposed by the provider have been met, if probable of collection.
D.
Cash and Cash Equivalents - This classi"cation includes undeposited receipts, petty cash, cash on deposit with private bank accounts, savings accounts, money market accounts, and deposits held by the State Treasurer in the Short-Term Investment Fund (STIF). The STIF maintained by the State Treasurer has the general characteristics of a demand deposit account in that participants may deposit and withdraw cash at any time without prior notice or penalty.
E.
Investments - To the extent available, investments are recorded at fair value based on quoted market prices in active markets on a trade-date basis. Additional information regarding the fair value measurement of investments is disclosed in Note 3. Because of the inherent uncertainty in the use of estimates, values that are based on estimates may differ from the values that would have been used had a ready market existed for the investments. The net change in the value of investments is recognized as a component of investment income.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 46 Domestic stocks are reported at cost since there are no readily determinable fair values. These investments consist of technology transfer stocks and the Wolfpack Investor Networks Seed Capital Endowment Fund stocks.
The Kamphoefner art collection, a gift to the Endowment Fund in 1979, is recorded at estimated fair value as of the date of donation. Mineral rights were a gift to the Endowment Fund in 1987. The most recent sale from 2016 was used to adjust the value per acre.
Endowment investments include the principal amount of gifts and bequests that, according to donor restrictions, must be held in perpetuity or for a speci"ed period of time, along with any accumulated investment earnings on such amounts.
Further, endowment investments also include amounts internally designated by the University for investment in an endowment capacity (i.e. quasi-endowments), along with accumulated investment earnings on such amounts.
F.
Receivables - Receivables consist of tuition and fees charged to students and charges for auxiliary enterprises sales and services. Receivables also include amounts due from the federal government, state and local governments, and private sources in connection with reimbursement of allowable expenditures made pursuant to contracts and grants.
Receivables are recorded net of estimated uncollectible amounts.
G.
Inventories - Inventories, consisting of expendable supplies and merchandise for resale, are valued at cost using the "rst-in, "rst-out method. Exceptions are the bookstore, which uses the retail inventory method, and the physical plant, which uses the moving weighted average method.
H.
Capital Assets - Capital assets are stated at cost at date of acquisition or acquisition value at date of donation in the case of gifts. Donated capital assets acquired prior to July 1, 2015 are stated at fair value as of the date of donation. The value of assets constructed includes all material direct and indirect construction costs.
The University capitalizes assets that have a value or cost of $5,000 or greater at the date of acquisition and an estimated useful life of more than one year except for internally generated computer software which is capitalized when the value or cost is $1,000,000 or greater and other intangible assets which are capitalized when the value or cost is $100,000 or greater. In addition, grouped acquisitions of machinery and equipment that have an estimated useful life of more than one year but are individually below the $5,000 threshold are capitalized.
Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets in the following manner:
Asset Class Estimated Useful Life Buildings 10 - 50 years Machinery & Equipment 4 - 22 years General Infrastructure 15 - 75 years Computer Software 2 - 15 years The University does not capitalize its Arts and Design or Historic collections. These collections adhere to the Universitys policy to maintain for public exhibition, education, or research; protect, keep unencumbered, care for, and preserve; and require proceeds from their sale to be used to acquire other collection items. Accounting principles generally accepted in the United States of America permit collections maintained in this manner to be charged to operations at time of purchase rather than be capitalized.
Right-to-use leased and subscription assets are recorded at the present value of payments expected to be made during the lease or subscription term, plus any upfront payments and ancillary charges paid to place the underlying right-to-use asset into service. Lease liabilities are capitalized as a right-to-use asset when the underlying leased asset has a cost of
$1,000,000 or greater and an estimated useful life of more than one year. When remaining lease payments or receipts are below this threshold, lease transactions are recognized as revenues or expenses, unless required for tracking purposes by current University business practices. This threshold should only be applied once upon entering into a lease agreement as de"ned by GASB Statement No. 87, Leases.
Subscription liabilities are capitalized as a right-to-use asset when management determines that costs should be tracked for "nancial reporting purposes and the estimated useful life is more than one year.
Amortization for right-to-use leased and subscription assets is computed using the straight-line method over the shorter of the lease/subscription term or the underlying assets estimated useful life. If a lease agreement contains a purchase option
47 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT the University is reasonably certain will be exercised, the right-to-use leased asset is amortized over the assets estimated useful life.
I.
Restricted Assets - Certain resources are reported as restricted assets because restrictions on asset use change the nature or normal understanding of the availability of the asset. Resources that are not available for current operations and are reported as restricted include resources restricted for the acquisition or construction of capital assets, resources legally segregated for the payment of principal and interest as required by debt covenants, unspent debt proceeds, and endowment and other restricted investments.
J.
Accounting and Reporting of Fiduciary Activities - Pursuant to the provisions of GASB Statement No. 84, Fiduciary Activities, custodial funds that are normally expected to be received and disbursed within a 3-month period or otherwise do not meet the "duciary activity criteria de"ned by GASB Statement No. 84 continue to be reported in the Statement of Net Position as funds held for others and as operating activities in the Statement of Cash Flows.
All trust or custodial funds meeting the criteria of a "duciary activity are reported in separate "duciary fund "nancial statements.
K.
Noncurrent Long-Term Liabilities - Noncurrent long-term liabilities include principal amounts of long-term debt and other long-term liabilities that will not be paid within the next "scal year. Debt is de"ned as a liability that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is "xed at the date the contractual obligation is established. Long-term debt includes: revenue bonds, revenue bonds from direct placement, and notes from direct borrowings. Other long-term liabilities include: pollution remediation, asset retirement obligations, lease liabilities, subscription liabilities, compensated absences, net pension liability, net other postemployment bene"ts (OPEB) liability, and workers compensation.
Revenue bonds are reported net of unamortized premiums or discounts. The University amortizes bond premiums/discounts over the life of the bonds using the straight-line method. Losses on refunding and issuance costs on bonds are not material to the accompanying "nancial statements and are expensed in the year incurred.
The net pension liability represents the Universitys proportionate share of the collective net pension liability reported in the State of North Carolinas 2023 Annual Comprehensive Financial Report. This liability represents the Universitys portion of the collective total pension liability less the "duciary net position of the Teachers and State Employees Retirement System. See Note 14 for further information regarding the Universitys policies for recognizing liabilities, expenses, deferred out"ows of resources, and deferred in"ows of resources related to pensions.
The net OPEB liability represents the Universitys proportionate share of the collective net OPEB liability reported in the State of North Carolinas 2023 Annual Comprehensive Financial Report. This liability represents the Universitys portion of the collective total OPEB liability less the "duciary net position of the Retiree Health Bene"t Fund and Disability Income Plan of North Carolina. See Note 15 for further information regarding the Universitys policies for recognizing liabilities, expenses, deferred out"ows of resources, and deferred in"ows of resources related to OPEB.
L.
Compensated Absences - The Universitys policy is to record the cost of vacation leave when earned. The policy provides for a maximum accumulation of unused vacation leave of 30 days which can be carried forward each January 1 or for which an employee can be paid upon termination of employment. When classifying compensated absences into current and noncurrent, leave is considered taken using a last-in, "rst-out (LIFO) method. Also, any accumulated vacation leave in excess of 30 days at year-end is converted to sick leave. Under this policy, the accumulated vacation leave for each employee at June 30 equals the leave carried forward at the previous December 31 plus the leave earned, less the leave taken between January 1 and June 30.
In addition to the vacation leave described above, compensated absences include the accumulated unused portion of the special annual leave bonuses awarded by the North Carolina General Assembly. The bonus leave balance on December 31 is retained by employees and transferred into the next calendar year. It is not subject to the limitation on annual leave carried forward described above and is not subject to conversion to sick leave.
There is no liability for unpaid accumulated sick leave because the University has no obligation to pay sick leave upon termination or retirement. However, additional service credit for retirement pension bene"ts is given for accumulated sick leave upon retirement.
M.
Deferred Out"ows/In"ows of Resources - Deferred out"ows of resources represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an out"ow of resources (expense) until then.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 48 Deferred in"ows of resources represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an in"ow of resources (revenue) until then.
N.
Net Position - The Universitys net position is classi"ed as follows:
Proprietary Fund Net Investment in Capital Assets - This represents the Universitys total investment in capital assets, net of outstanding liabilities related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of net investment in capital assets. Additionally, deferred out"ows of resources and deferred in"ows of resources that are attributable to the acquisition, construction, or improvement of capital assets or related debt are also included in this component of net position.
Restricted Net Position - Nonexpendable - Nonexpendable restricted net position includes endowments and similar type assets whose use is limited by donors or other outside sources, and, as a condition of the gift, the principal is to be maintained in perpetuity.
Restricted Net Position - Expendable - Expendable restricted net position includes resources for which the University is legally or contractually obligated to spend in accordance with restrictions imposed by external parties.
Unrestricted Net Position - Unrestricted net position includes resources derived from student tuition and fees, sales and services, unrestricted gifts, royalties, and interest income. It also includes the net position of accrued employee bene"ts such as compensated absences, workers compensation, pension plans, and other postemployment bene"ts.
Restricted and unrestricted resources are tracked using a fund accounting system and are spent in accordance with established fund authorities. Fund authorities provide rules for the fund activity and are separately established for restricted and unrestricted activities. When both restricted and unrestricted funds are available for expenditure, the decision for funding is transactional based within the departmental management system in place at the University. For projects funded by tax-exempt debt proceeds and other sources, the debt proceeds are always used "rst. Both restricted and unrestricted net position include consideration of deferred out"ows of resources and deferred in"ows of resources. See Note 11 for further information regarding deferred out"ows of resources and deferred in"ows of resources that had a signi"cant effect on unrestricted net position.
Fiduciary Funds Restricted Net Position - Fiduciary net position includes resources held in a custodial capacity for external pool participants in the Universitys External Investment Fund and for other organizations; these resources are not available for alternative use by the University.
O.
Scholarship Discounts - Student tuition and fees revenues and certain other revenues from University charges are reported net of scholarship discounts in the accompanying Statement of Revenues, Expenses, and Changes in Net Position. The scholarship discount is the difference between the actual charge for goods and services provided by the University and the amount that is paid by students or by third parties on the students behalf. Student "nancial assistance grants, such as Pell grants, and other federal, state, or nongovernmental programs, are recorded as nonoperating revenues in the accompanying Statement of Revenues, Expenses, and Changes in Net Position. To the extent that revenues from these programs are used to satisfy tuition, fees, and other charges, the University has recorded a scholarship discount.
P.
Revenue and Expense Recognition - The University classi"es its revenues and expenses as operating or nonoperating in the accompanying Statement of Revenues, Expenses, and Changes in Net Position. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the Universitys principal ongoing operations. Operating revenues include activities that have characteristics of exchange transactions, such as (1) student tuition and fees, (2) sales and services of auxiliary enterprises, (3) certain federal, state, and local grants and contracts that are essentially contracts for services, and (4) interest earned on loans. Operating expenses are all expense transactions incurred other than those related to capital and noncapital "nancing or investing activities as de"ned by GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting.
Nonoperating revenues include activities that have the characteristics of nonexchange transactions. Revenues from nonexchange transactions that represent subsidies or gifts to the University, as well as investment income, are considered nonoperating since these are either investing, capital, or noncapital "nancing activities. Capital contributions are presented
49 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT separately after nonoperating revenues and expenses.
Q.
Internal Sales Activities - Certain institutional auxiliary operations provide goods and services to University departments, as well as to its customers. These institutional auxiliary operations include activities such as Central Stores, the Creamery, Telecommunications, Physical Plant, and Motor Pool. In addition, the University has other miscellaneous sales and service units that operated either on a reimbursement or charge basis. All internal sales activities to University departments from auxiliary operations and sales and service units have been eliminated in the accompanying "nancial statements. These eliminations are recorded by removing the revenue and expense in the auxiliary operations and sales and service units and, if signi"cant, allocating any residual balances to those departments receiving the goods and services during the year.
Note 2 - Deposits and Investments A.
Deposits - Unless speci"cally exempt, the University is required by North Carolina General Statute 147-77 to deposit moneys received with the State Treasurer or with a depository institution in the name of the State Treasurer. However, the University of North Carolina Board of Governors, pursuant to G.S. 116-36.1, may authorize the University to deposit its institutional trust funds in interest-bearing accounts and other investments authorized by the Board of Governors, without regard to any statute or rule of law relating to the investment of funds by "duciaries. Although speci"cally exempted, the University may voluntarily deposit institutional trust funds, endowment funds, special funds, revenue bond proceeds, debt service funds, and funds received for services rendered by health care professionals with the State Treasurer. Special funds consist of moneys for intercollegiate athletics and agency funds held directly by the University.
At June 30, 2024, the amount shown on the Statement of Net Position as cash and cash equivalents includes $789,297,571 for the proprietary fund and $15,953,435 for the "duciary funds, which represents the Universitys equity position in the State Treasurers Short-Term Investment Fund (STIF). The STIF (a portfolio within the State Treasurers Investment Pool, an external investment pool that is not registered with the Securities and Exchange Commission or subject to any other regulatory oversight and does not have a credit rating) had a weighted average maturity of 1.4 years as of June 30, 2024. Assets and shares of the STIF are valued at fair value. Deposit and investment risks associated with the State Treasurers Investment Pool (which includes the State Treasurers STIF) are included in the North Carolina Department of State Treasurer Investment Programs separately issued audit report. This separately issued report can be obtained from the Department of State Treasurer, 3200 Atlantic Avenue, Raleigh, NC 27604 or can be accessed from the Department of State Treasurers website at https://www.nctreasurer.com/ in the Audited Financial Statements section.
Cash on hand at June 30, 2024 was $11,697. The carrying amount of the Universitys deposits not with the State Treasurer was $3,797,890, and the bank balance was $3,726,212. Custodial credit risk is the risk that in the event of a bank failure, the Universitys deposits may not be returned to it. The University does not have a deposit policy for custodial credit risk. As of June 30, 2024, the Universitys bank balance exposed to custodial credit risk (amounts that are uninsured and uncollateralized) was $3,171,372.
B.
Investments - The University is authorized by the University of North Carolina Board of Governors pursuant to G.S.
116-36.2 and Section 600.2.4 of the Policy Manual of the University of North Carolina to invest its special funds and funds received for services rendered by health care professionals in the same manner as the State Treasurer is required to invest, as discussed below.
Additionally, the University has also been delegated authority by the President of the University of North Carolina pursuant to G.S. 116-36.1 and Section 600.2.4.1 of the Policy Manual of the University of North Carolina to invest its trust funds in the same manner as the State Treasurer is required to invest, as discussed below.
G.S. 147-69.1(c), applicable to the States General Fund, and G.S. 147-69.2, applicable to institutional trust funds, authorize the State Treasurer to invest in the following: obligations of or fully guaranteed by the United States; obligations of certain federal agencies; repurchase agreements; obligations of the State of North Carolina; certi"cates of deposit and other deposit accounts of speci"ed "nancial institutions; prime quality commercial paper; asset-backed securities with speci"ed ratings, speci"ed bills of exchange or time drafts, and corporate bonds/notes with speci"ed ratings; general obligations of other states; general obligations of North Carolina local governments; and obligations of certain entities with speci"ed ratings.
In accordance with the bond resolutions, bond proceeds and debt service funds are invested in obligations that will by their terms mature on or before the date funds are expected to be required for expenditure or withdrawal.
G.S. 116-36(e) provides that the trustees of the Endowment Fund shall be responsible for the prudent investment of the
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 50 Fund in the exercise of their sound discretion, without regard to any statute or rule of law relating to the investment of funds by "duciaries but in compliance with any lawful condition placed by the donor upon that part of the Endowment Fund to be invested.
Investments of the Endowment Fund, including those invested in the Investment Fund, a University component unit, are subject to and restricted by G.S. 36E Uniform Prudent Management of Institutional Funds Act (UPMIFA) and any requirements placed on them by contract or donor agreements.
Investments from various donors or other sources may be pooled unless prohibited by statute or by terms of the gift or contract. The University utilizes investment pools to manage investments and distribute investment income.
Investments are subject to the following risks as de"ned by GASB Statement No. 40, Deposit and Investment Risk Disclosures - An Amendment of GASB Statement No. 3.
Interest Rate Risk: Interest rate risk is the risk the University may face should interest rate variances affect the value of investments. The University does not have a formal policy that addresses interest rate risk.
Credit Risk: Credit risk is the risk that an issuer or other counterparty to an investment will not ful"ll its obligations. The University does not have a formal policy that addresses credit risk.
Investment Fund - The Investment Fund began operations in April 1999 and is classi"ed as a non-rated 2a7-like governmental external investment pool that is not registered with the Securities and Exchange Commission (SEC) as an investment company, but has a policy that it will, and does, operate in a manner consistent with the SECs Rule 2a7 of the Investment Company Act of 1940. The Endowment Fund of North Carolina State University, The North Carolina Agricultural Foundation, Inc., and the North Carolina State University Foundation, Inc. represent the Investment Funds internal participants. The North Carolina Agricultural Foundation, Inc. and the North Carolina State University Foundation, Inc. are discretely presented component units in the "nancial statements. Other af"liated organizations not included in the Universitys reporting entity represent the Investment Funds external participants. The external portion of the Investment Fund is presented in the accompanying "duciary fund "nancial statements. The Investment Fund includes the Long-Term Investment Pool (LTIP) and the Intermediate Term Fund (ITF), which was established on July 3, 2014 for the collective investment of the participants excess operating funds.
Oversight of the Investment Fund is provided by its Members Board and Board of Directors. The Members Board is responsible for providing governance and oversight to the Investment Fund. The Members Board has chosen not to make individual security or manager selection decisions. The Board of Directors primary role is to oversee the investment program, including development of the Investment Policy, in a prudent manner with regard to preserving principal while providing reasonable returns.
Bank of New York Mellon is the custodian for the Investment Fund and provides the University with quarterly statements de"ning income and fair value information, which is then allocated among the funds participants. Each participant holds Master Trust Units of the Investment Fund. The unit price "uctuates based on the investment experience of the investment pool. There are no involuntary participants in the Investment Fund. The University has not provided or obtained any legally binding guarantees during the period to support the value for the Investment Funds investments. The annual "nancial report for the Investment Fund may be obtained from the Foundations Accounting and Investment Of"ce, Campus Box 7207, Raleigh, NC 27695 or by calling (919) 513-7149 or at: https://investments.ofa.ncsu.edu.
The following tables in this section present the Investment Fund in total, including both proprietary and "duciary funds. See Note 2C below for further details regarding investments by fund type within the Investment Fund.
51 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT The following table presents investments by type and investments subject to interest rate risk at June 30, 2024, for the Investment Fund.
INVESTMENT FUND Investment Maturities (in Years)
Less Amount Than 1 1 to 5 6 to 10 Investment Type Debt Securities U.S. Treasuries 35,132,843 35,132,843 Collective Investment Funds 119,856,967 94,889,326 24,967,641 Debt Mutual Funds 318,353,023 296,794,981 21,558,042 Money Market Mutual Funds 35,933,093 35,933,093 Total Debt Securities 509,275,926 165,955,262
$ 296,794,981 46,525,683 Other Securities UNC Investment Fund 1,338,341,902 Domestic Equities 130,006,099 Hedge Funds 31,145,770 Private Equity Limited Partnerships 112,180,501 Total Investment Fund 2,120,950,198 At June 30, 2024, investments in the Investment Fund had the following credit quality distribution for securities with credit exposure (based on S&P ratings):
AAA AA Amount Aaa Aa A
Unrated Collective Investment Funds 119,856,967 $
24,967,641 $
94,889,326 Debt Mutual Funds 318,353,023 87,711,906 215,746,962 14,894,155 Money Market Mutual Funds 35,933,093 35,933,093 Totals 474,143,083 $ 35,933,093 $ 112,679,547 $
215,746,962 $ 109,783,481 UNC Investment Fund, LLC - At June 30, 2024, the Universitys investments include $1,338,341,902, which represents the Universitys equity position in the UNC Investment Fund, LLC (UNC Investment Fund). The UNC Investment Fund is an external investment pool that is not registered with the Securities and Exchange Commission, does not have a credit rating, and is not subject to any regulatory oversight. Investment risks associated with the UNC Investment Fund are included in audited "nancial statements of the UNC Investment Fund, LLC which may be obtained from UNC Management Company, Inc., 1400 Environ Way, Chapel Hill, NC 27517.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 52 Non-Pooled Investments - The following table presents investments by type at June 30, 2024, for the Universitys non-pooled investments.
Amount Investment Type Debt Securities Domestic Stocks 378,373 Collections and Mineral Rights 65,133 Total Non-Pooled Investments 443,506 NON-POOLED INVESTMENTS Amount Investment Type Debt Securities U.S. Treasuries 35,132,843 Collective Investment Funds 119,856,967 Debt Mutual Funds 318,353,023 Money Market Mutual Funds 35,933,093 Other Securities UNC Investment Fund 1,338,341,902 Domestic Equities 130,006,099 Hedge Funds 31,145,770 Private Equity Limited Partnerships 112,180,501 Domestic Stocks 378,373 Collections and Mineral Rights 65,133 Total Investments 2,121,393,704 Total Investments - The following table presents the total investments at June 30, 2024:
Total investments include $776,238,335 held in the Investment Fund for the North Carolina State University Foundation, Inc. and The North Carolina Agricultural Foundation, Inc. This amount is excluded from the University prepared "nancial statements and included in the accompanying component unit "nancial statements.
53 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT C.
Reconciliation of Deposits and Investments - A reconciliation of deposits and investments for the University as of June 30, 2024, is as follows:
Proprietary Fund Fiduciary Fund Total Cash on Hand 11,697 11,697 Amount of Deposits with Private Financial Institutions 3,797,890 3,797,890 Deposits in the Short-Term Investment Fund 789,297,571 15,953,435 805,251,006 Investment Fund 801,987,539 542,724,324 1,344,711,863 Non-Pooled Investments 443,506 443,506 Total Deposits and Investments 1,595,538,203 558,677,759
$ 2,154,215,962 Deposits Current Cash and Cash Equivalents 332,592,722 15,953,435 348,546,157 Restricted Cash and Cash Equivalents 199,913,948 199,913,948 Noncurrent Restricted Cash and Cash Equivalents 260,600,488 260,600,488 Total Deposits 793,107,158 15,953,435 809,060,593 Investments Noncurrent Endowment Investments 586,591,767 586,591,767 Other Long-Term Investments 215,839,278 215,839,278 Intermediate Term Investments 25,144,018 25,144,018 Long-Term Investments 517,580,306 517,580,306 Total Investments 802,431,045 542,724,324 1,345,155,369 Total Deposits and Investments 1,595,538,203 558,677,759
$ 2,154,215,962 Note 3 - Fair Value Measurements To the extent available, the Universitys investments are recorded at fair value as of June 30, 2024. GASB Statement No.
72, Fair Value Measurement and Application, de"nes fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This statement estab-lishes a hierarchy of valuation inputs based on the extent to which the inputs are observable in the marketplace. Inputs are used in applying the various valuation techniques and take into account the assumptions that market participants use to make valuation decisions. Inputs may include price information, credit data, interest and yield curve data, and other factors speci"c to the "nancial instrument. Observable inputs re"ect market data obtained from independent sources. In contrast, unobservable inputs re"ect the entitys assumptions about how market participants would value the "nancial instrument.
Valuation techniques should maximize the use of observable inputs to the extent available.
A "nancial instruments level within the fair value hierarchy is based on the lowest level of any input that is signi"cant to the fair value measurement. The following describes the hierarchy of inputs used to measure fair value and the primary valua-tion methodologies used for "nancial instruments measured at fair value on a recurring basis:
Level 1 Investments whose values are based on quoted prices (unadjusted) for identical as-sets in active markets that a government can access at the measurement date.
Level 2 Investments with inputs - other than quoted prices included within Level 1 - that are observable for an asset, either directly or indirectly.
Level 3 Investments classi"ed as Level 3 have unob-servable inputs for an asset and may require a degree of professional judgment.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 54 The following table summarizes the Universitys proprietary and "duciary fund investments, including deposits in the Short-Term Investment Fund, within the fair value hierarchy at June 30, 2024:
Fair Value Measurements Using Fair Level 1 Level 2 Level 3 Value Inputs Inputs Inputs Investment by Fair Value Level Debt Securities U.S. Treasuries 35,132,843 35,132,843 $
Collective Investment Funds 119,856,967 119,856,967 Debt Mutual Funds 318,353,023 318,353,023 Money Market Mutual Funds 35,933,093 35,933,093 Total Investments by Fair Value Level 509,275,926 509,275,926 $
Investments Measured at the Net Asset Value (NAV)
Domestic Equities 130,006,099 Hedge Funds 31,145,770 Private Equity Limited Partnerships 112,180,501 Total Investments Measured at the NAV 273,332,370 Investments as a Position in an External Investment Pool Short-Term Investment Fund 805,251,006 UNC Investment Fund 1,338,341,902 Total Investments as a Position in an External Investment Pool 2,143,592,908 Total Investments Measured at Fair Value 2,926,201,204 Debt Securities - Debt securities classi"ed in Level 1 of the fair value hierarchy are valued using prices quoted in active markets for those securities.
Short-Term Investment Fund - Ownership interests of the STIF are determined on a fair market valuation basis as of "scal year end in accordance with the STIF operating procedures. Valuation of the underlying assets is performed by the custo-dian. Pool investments are measured at fair value in accordance with GASB Statement No. 72. The Universitys position in the pool is measured and reported at fair value and the STIF is not required to be categorized within the fair value hierarchy.
UNC Investment Fund - Ownership interests of the UNC Investment Fund are determined on a market unit valuation basis each month and in accordance with the UNC Investment Funds operating procedures. Valuation of the underlying assets is performed by the custodian. Pool investments are measured at fair value in accordance with GASB Statement No. 72. The Universitys position in the pool is measured and reported at fair value and the UNC Investment Fund is not required to be categorized within the fair value hierarchy.
The following table presents the valuation of investments measured at the Net Asset Value (NAV) per share (or its equiva-lent) at June 30, 2024:
Investments Measured at the NAV Redemption Fair Unfunded Frequency Redemption Value Commitments (If Currently Eligible)
Notice Period Domestic Equities 130,006,099 N/A N/A Hedge Funds 31,145,770 See Note Below See Note Below Private Equity Limited Partnerships 112,180,501 102,019,123 N/A N/A Total Investments Measured at the NAV 273,332,370 102,019,123 Domestic Equities - Domestic equities include investments in funds that seek to track the S&P 500 Index, a benchmark of U.S. large-cap stocks.
Hedge Funds - Hedge funds include investments in a single hedge fund that invests both long and short primarily in U.S.
55 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Note 4 - Endowment Investments Investments of the Universitys endowment funds are pooled, unless required to be separately invested by the donor. If a donor has not provided speci"c instructions, state law permits the Board of Trustees to authorize for expenditure the net appreciation, realized and unrealized, of the investments of the endowment funds. Under the Uniform Prudent Management of Institutional Funds Act (UPMIFA), authorized by the North Carolina General Assembly on March 19, 2009, the Board may also appropriate expenditures from eligible nonexpendable balances if deemed prudent and necessary to meet program outcomes and for which such spending is not speci"cally prohibited by the donor agreements. However, a majority of the Universitys endowment donor agreements prohibit spending of nonexpendable balances and therefore the related nonexpendable balances are not eligible for expenditure. During the year, the Board did not appropriate expenditures from eligible nonexpendable endowment funds.
Investment return of the Universitys endowment funds is predicated on the total return concept (yield plus appreciation).
Annual payouts from the University pooled endowment funds are determined by applying 4% (the Board approved spending rate) to the average market value of the long-term investment pool (for a twenty quarter period), divided by the number of investment units in the pool to determine the average spending amount per unit of investment. The individual endowment fund payout or spending budget is then determined by applying the average spending amount to the number of investment units held by the individual endowment fund. To the extent that the total return for the current year exceeds the payout, the excess is added to principal. If current year earnings do not meet the payout requirements, the University uses accumulated income and appreciation from restricted and unrestricted, expendable net position endowment balances to make up the difference. At June 30, 2024, net appreciation of $402,563,483 was available to be spent, of which
$371,912,508 was restricted to speci"c purposes. The remaining portion of net appreciation available to be spent is classi"ed as unrestricted net position.
common stocks. The fund seeks to invest in undervalued companies and actively engages with management teams and boards of directors to identify and execute opportunities to unlock value. The funds strategy also includes hedging to de-fend gains and reduce the equity beta in the portfolio. The fair value of the fund has been determined using the NAV per share. Investments representing 48% of the value of the investments in this type cannot be redeemed because the invest-ments include restrictions that do not allow for redemption in the "rst four to six months after acquisition. The remaining restriction period for these investments was three months on June 30, 2024.
The policies surrounding redemptions require 90 days irrevocable written notice and allow for redemptions at the end of each calendar quarter (the Redemption Date). If aggregate redemption requests received with respect to any given Re-demption Date exceed 12.5% of the net asset value, the Board of Directors may reduce all redemption requests pro rata so that only 12.5% of the net asset value is redeemed (the Gate). Any redemption request that remains unsatis"ed for four consecutive quarter-ends as a result of the Gate will be satis"ed as of the next quarter-end Redemption Date, subject to any limitation on redemptions that may exist at that time (other than the Gate).
Private Equity Limited Partnerships - Private equities include venture capital partnerships, buy-outs, and international funds. The valuation of the underlying private companies requires signi"cant judgment and interpretation by the general partners of the underlying investment partnerships due to the absence of quoted market values, inherent lack of liquidity, and the long-term nature of such investments. Private companies are initially valued based upon transaction price, with subsequent adjustments to values which re"ect the consideration of available market data, including primarily observations of the trading multiples of public companies considered comparable to the private companies being valued. Valuations are also adjusted to give consideration to the "nancial condition and operating results speci"c to the issuer, the lack of liquidity inherent in a non-public investment, credit markets, and the fact that comparable public companies are not identical to the companies being valued.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 56 Less Allowance Gross for Doubtful Net Receivables Accounts Receivables Current Receivables:
Students 1,922,047 987,224 934,823 Student Sponsors 1,128,821 1,128,821 Accounts 27,548,658 3,252,154 24,296,504 Intergovernmental 60,305,888 60,305,888 Grant Sponsors 39,573,361 39,573,361 Interest on Loans 80,169 62,281 17,888 Total Current Receivables 130,558,944 4,301,659 126,257,285 Notes Receivable:
Notes Receivable - Current:
Federal Loan Programs 767,002 11,928 755,074 Institutional Student Loan Programs 370,521 370,521 Total Notes Receivable - Current 1,137,523 11,928 1,125,595 Notes Receivable - Noncurrent:
Federal Loan Programs 1,383,619 298,624 1,084,995 Institutional Student Loan Programs 110,051 74,656 35,395 Total Notes Receivable - Noncurrent 1,493,670 373,280 1,120,390 Note 5 - Receivables Receivables for the proprietary fund at June 30, 2024, were as follows:
57 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Note 6 - Capital Assets A summary of changes in the capital assets for the year ended June 30, 2024, is presented as follows:
Balance July 1, 2023 Balance (as restated)
Increases Decreases June 30, 2024 Capital Assets, Nondepreciable:
Land and Permanent Easements 78,434,278 12,709,001 91,143,279 Construction in Progress 79,515,722 121,428,202 57,780,606 143,163,318 Computer Software in Development 1,492,702 7,661,285 7,516,710 1,637,277 Total Capital Assets, Nondepreciable 159,442,702 141,798,488 65,297,316 235,943,874 Capital Assets, Depreciable:
Buildings 2,767,366,435 67,986,806 449,799 2,834,903,442 Machinery and Equipment 530,063,323 57,126,316 23,070,638 564,119,001 General Infrastructure 311,852,068 6,747,909 318,599,977 Computer Software 44,384,539 7,516,710 51,901,249 Right-to-Use Leased Buildings 107,817,361 5,325,468 113,142,829 Right-to-Use Leased Machinery and Equipment 18,691,593 46,204 18,645,389 Right-to-Use Subscription Assets 7,484,409 9,273,434 602,206 16,155,637 Total Capital Assets, Depreciable 3,787,659,728 153,976,643 24,168,847 3,917,467,524 Less Accumulated Depreciation/Amortization for:
Buildings 1,108,064,274 82,980,453 449,799 1,190,594,928 Machinery and Equipment 314,676,771 41,405,184 21,662,601 334,419,354 General Infrastructure 104,610,431 7,355,072 111,965,503 Computer Software 36,448,627 3,973,627 40,422,254 Right-to-Use Leased Buildings 22,876,524 12,261,882 35,138,406 Right-to-Use Leased Machinery and Equipment 4,950,599 2,382,533 23,246 7,309,886 Right-to-Use Subscription Assets 1,439,156 3,406,029 210,772 4,634,413 Total Accumulated Depreciation/Amortization 1,593,066,382 153,764,780 22,346,418 1,724,484,744 Total Capital Assets, Depreciable, Net 2,195,593,346 211,863 1,822,429 2,192,982,780 Capital Assets, Net 2,354,036,048 142,010,351 67,119,745 2,428,926,654 As of June 30, 2024, the total amount of right-to-use leased assets was $131,788,218 and the related accumulated amor-tization was $42,448,292.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 58 Note 7 - Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities at June 30, 2024, were as follows:
Proprietary Fund Fiduciary Fund Current Accounts Payable and Accrued Liabilities Accounts Payable 30,754,437 44,842 Accounts Payable - Capital Assets 22,829,758 Accrued Payroll 9,830,994 Contract Retainage 3,888,100 Other 1,668,371 Total Current Accounts Payable and Accrued Liabilities 68,971,660 44,842 Note 8 - Short-Term Debt - Commercial Paper Program and Line of Credit The University has available Commercial Paper Program "nancing for short-term debt credit up to $100,000,000 to "nance capital construction projects. The Universitys available funds are pledged to the Commercial Paper Program "nancing with the anticipation of converting to general revenue bond "nancing in the future. As of June 30, 2024, the Commercial Paper balance was zero. The commercial paper contains a provision that on the occurrence and continuance of an event of default, the Trustee may, or if required by a majority of the owners of the bonds, must, declare the bonds to be immediately due and payable (except if matured installments are paid before any judgment or decree is obtained).
Events of default are de"ned as (1) failure to make any payment when due or (2) failure to perform any covenant, condi-tion, agreement, or provision (other than failure to pay), which failure continues for a period of 30 days after written notice, specifying such failure and requesting that it be remedied. The Commercial Paper program was unused during the year ended June 30, 2024 and has no outstanding balance.
The NC State University Partnership Corporation (Corporation), through the NC State University Centennial Development LLC, has available a Line of Credit, from TowneBank, up to $300,000 for operations at the Lonnie Poole Golf Course. The line is unsecured and must maintain a zero balance for at least 30 consecutive days during each twelve months. As of June 30, 2024, the Line of Credit balance was zero. The Line of Credit contains an event of default provision that if the Corporation is unable to make any payment when due, all commitments and obligations of the Lender immediately will terminate and, at Lenders option, all indebtedness immediately will become due and payable. Also, upon default, the interest rate on the Line of Credit will be increased by an additional 3% margin, subject to the maximum interest rate limitations under applicable law.
Unused Line of Credit - The NC State University Partnership Corporation, through the NC State University Centennial Development LLC line of credit from TowneBank was unused during the year ended June 30, 2024 and has no outstand-ing balance.
59 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Note 9 - Long-Term Liabilities A.
Changes in Long-Term Liabilities - A summary of changes in the long-term liabilities for the year ended June 30, 2024, is presented as follows:
Balance Balance Current July 1, 2023 Additions Reductions June 30, 2024 Portion Long-Term Debt Revenue Bonds Paybale 438,395,000 $ 139,540,000 18,090,000 559,845,000 21,955,000 Bonds from Direct Placements 24,485,058 3,629,012 20,856,046 3,419,944 Plus: Unamortized Premium 23,580,902 3,407,092 1,920,291 25,067,703 Total Revenue Bonds Payable, and Bonds from Direct Placements, Net 486,460,960 142,947,092 23,639,303 605,768,749 25,374,944 Notes from Direct Borrowings 40,133,591 6,600,585 33,533,006 7,194,131 Total Long-Term Debt 526,594,551 142,947,092 30,239,888 639,301,755 32,569,075 Other Long-Term Liabilities Pollution Remediation Payable 4,343,066 505,565 3,837,501 107,148 Asset Retirement Obligations 15,600,422 573,241 16,173,663 Lease Liabilities 102,103,190 5,366,799 13,464,383 94,005,606 14,153,955 Subscription (SBITA) Liabilities 5,948,084 9,139,917 5,643,282 9,444,719 3,752,234 Employee Bene"ts Compensated Absences 90,586,768 64,057,717 59,776,250 94,868,235 4,981,354 Net Pension Liability 310,072,163 56,634,772 366,706,935 Net Other Postemployment Bene"t Liability 885,673,668 131,497,149 64,460 1,017,106,357 Workers Compensation 9,234,464 1,991,329 2,554,482 8,671,311 1,668,840 Total Other Long-Term Liabilities 1,423,561,825 269,260,924 82,008,422 1,610,814,327 24,663,531 Total Long-Term Liabilities, Net 1,950,156,376 $ 412,208,016 112,248,310 2,250,116,082 57,232,606 Additional information regarding lease and subscription (SBITA) liabilities is included in Note 10.
Additional information regarding the net pension liability is included in Note 14.
Additional information regarding the net other postemployment bene"ts liability is included in Note 15.
Additional information regarding workers compensation is included in Note 16.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 60 C.
Notes from Direct Borrowings - The University was indebted for notes from direct borrowings for the purposes shown in the following table:
Annual Requirements Revenue Bonds Payable Bonds from Direct Placements Notes from Direct Borrowings Fiscal Year Principal Interest Principal Interest Principal Interest 2025 21,955,000 19,038,287 3,419,944 493,969 7,194,131 1,180,859 2026 21,650,000 19,245,872 3,358,417 406,528 7,747,122 892,109 2027 23,145,000 18,418,125 2,477,845 331,240 8,370,524 580,329 2028 23,580,000 17,558,709 2,542,608 266,476 9,156,192 240,986 2029 32,080,000 16,568,747 2,609,065 200,020 1,065,037 5,117 2030-2034 127,095,000 66,958,725 6,448,167 252,405 2035-2039 117,460,000 46,167,106 2040-2044 120,595,000 23,225,595 2045-2049 34,890,000 10,491,713 2050-2054 36,675,000 3,784,900 Total Requirements 559,845,000 241,457,779 20,856,046 1,950,638 33,533,006 2,899,400 D.
Annual Requirements - The annual requirements to pay principal and interest on the long-term obligations at June 30, 2024, are as follows:
Interest Rate Final Maturity Date Original Amount of Issue Principal Outstanding June 30, 2024 Financial Institution Purpose Energy Conservation Loan Truist 3.245%
09/01/2028 19,700,703 7,482,456 Energy Conservation Loan Bank of America 4.07%
08/17/2028 56,060,010 26,050,550 Total Notes from Direct Borrowings 75,760,713 33,533,006 Interest Rate/
Ranges Final Maturity Date Original Amount of Issue Principal Outstanding June 30, 2024 Purpose Series Revenue Bonds Payable Adv Refund 2005A/Wolf Ridge Housing 2013A 2% - 5%
10/01/2023 132,440,000 Adv Refund 2005A/Talley Student Union 2013B 0.267% - 4%
10/01/2041 141,650,000 119,910,000 Refund 2003B and 2015 2018 2% - 5%
10/01/2028 87,165,000 44,410,000 Refund 2010B/Carmichael 2020A 2.375% - 5%
10/01/2044 82,335,000 79,285,000 Adv Refund 2013A/Fitts-Woolard; Plant Sciences 2020B 0.602% - 3.02%
10/01/2042 184,445,000 176,700,000 University Towers Purchase and Renovation 2024A 4% - 5%
10/01/2053 50,410,000 50,410,000 Integrative Sciences Building Construction 2024B 4% - 5%
10/01/2053 89,130,000 89,130,000 Total Revenue Bonds Paybale 767,575,000 559,845,000 Bonds from Direct Placements Various Construction Projects 2017 2.58%
10/01/2031 50,438,952 20,856,046 Total Revenue Bonds Payable and Bonds from Direct Placements (principal only) 818,013,952 580,701,046 Plus: Unamortized Premium 25,067,703 Total Revenue Bonds Payable and Bonds from Direct Placement, Net 605,768,749 B.
Revenue Bonds Payable and Bonds from Direct Placements - The University was indebted for revenue bonds payable, and bonds from direct placements for the purposes shown in the following table:
61 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT E.
Terms of Debt Agreements - The Universitys debt agreements are subject to the following collateral requirements and terms with "nance-related consequences:
Revenue Bonds Payable and Bonds from Direct Placements - The outstanding revenue bonds and revenue bonds from direct placement contain provisions that on the occurrence and continuance of an event of default, the Trustee may, or if required by a majority of the owners of the bonds, must, declare the bonds to be immediately due and payable (except if matured installments are paid before any judgment or decree is obtained). Events of default are de"ned as (1) failure to make any payment when due or (2) failure to perform any covenant, condition, agreement, or provision (other than failure to pay), which failure continues for a period of 30 days after written notice, specifying such failure and requesting that it be remedied.
Notes from Direct Borrowings - The University has pledged the energy savings improvements installed in its buildings and other structures as collateral for the outstanding notes from direct borrowings. The outstanding notes from direct borrowings also contain provisions related to events of default and remedies. Signi"cant to these provisions, an event of default occurs when: (1) the University fails to pay an installment payment when due, (2) an event of nonappropriation from the State occurs, or (3) the University fails to perform any warranty, covenant, condition, or agreement within thirty days of receiving written notice by the lender or fails to diligently pursue corrective action for matters that cannot be reasonably corrected within thirty days.
Upon the occurrence of any event of default, the lender may, without any further demand or notice, declare the unpaid principal amount plus any accrued and unpaid interest be due and payable immediately. The lender may also exercise all remedies available by law or in the equity provided under the agreement, including sale of the secured assets, and apply the proceeds of any such sale to the amounts due after deducting all costs and expenses related to the recovery, repair, storage, and sale of the secured assets, including court costs and reasonable attorneys fees incurred.
F.
Prior Year Defeasances - During prior years, the University defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the Universitys "nancial statements. At June 30, 2024, the outstanding balance of prior year defeased bonds was $0.
G.
Pollution Remediation Payable - The University has recognized a pollution remediation liability for remediation of Lot 86 which the University used as a burial site for hazardous chemical and low level radioactive waste generated in the Universitys laboratories. The amount of the estimated liability is $3,837,501. This estimate was calculated at its expected amount, using the expected cash "ow technique. This liability could change over time due to changes in cost of goods and services, changes in remediation technology, or changes in laws and regulations governing the remediation effort.
H.
Asset Retirement Obligations - The University has asset retirement obligations arising from federal regulations to perform certain decommissioning activities at the time of disposal of its PULSTAR reactor facility. These activities include removal of all activated reactor components, demolition of the reactor biological shield, and disposal costs for radioactive materials. The amount of the estimated liability is $16,173,663. The liability was estimated by analyzing the actual decommissioning costs of a representative university reactor facility and adjusting the costs to be consistent with the NC State PULSTAR facility. Costs were also adjusted for the effects of in"ation. At year-end, the estimated remaining useful life of the PULSTAR reactor facility was 39 years. In accordance with 10 CFR 50.75(e)(1)(iv), the University has provided the following Statement of Intent regarding decommissioning funding. The University is a State government organization and decommissioning funding obligations are fully backed by the State of North Carolina. Decommissioning funds will be appropriated when necessary following the provisions of NC General Statute 116-11(9)(a).
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 62 Note 10 - Leases and Subscription-Based Information Technology Arrangements A.
Lessor Arrangements - The University leases land and of"ce space to external parties. The leases expire at various dates, and some have renewal options. Lease receivables and related deferred in"ows of resources are recorded based on the present value of expected receipts over the term of the respective leases. The expected receipts are discounted using the interest rate stated per the lease contract, or the Universitys estimated incremental borrowing rate if there is no stated contractual interest rate.
Measurement of the lease receivable excluded the following variable payment amounts: the increase or decrease in payments after the initial measurement of the lease receivable that depend on changes in an index or rate (such as the Consumer Price Index). During the year, the University did not recognize any variable payment amounts.
During the year ended June 30, 2024, the University recognized operating revenues related to lessor arrangements totaling
$1,788,413, and nonoperating lease interest income totaling $1,521,091. The lease receivable includes $908,579 for a sublease with Appalachian State University (a constituent university of the University of North Carolina System) for the right to use part of a building located on the North Carolina Research Campus. The sublease has a remaining lease term of six years.
The Universitys lessor arrangements at June 30, 2024, are summarized below (excluding short-term leases):
Number Lease of Lease Receivable Current Interest Rate/
Classi"cation:
Contracts June 30, 2024 Portion Lease Terms (1)
Ranges Lessor:
Land 18 7,524,342 $
42,468 47.4 years 6.25% - 8.5%
Buildings 21 24,851,413 2,051,293 2.8 years 8.5%
Total 39 32,375,755 $
2,093,761 (1) The lease terms were calculated using weighted averages based on lease receivable amounts.
B.
Lessee Arrangements - The University has lease agreements for the right to use of"ce space and equipment from both external and related parties. The leases expire at various dates, and some have renewal options. Lease liabilities and right-to-use leased assets are recorded at the present value of payments expected to be made during the lease term, plus any upfront payments and ancillary charges paid to place the underlying right-to-use asset into service. The expected payments are discounted using the interest rate stated per the lease contract, or the Universitys estimated incremental borrowing rate if there is no stated contractual interest rate.
Measurement of the lease liability excluded the following variable payment amounts: 1) the increase or decrease in payments after the initial measurement of the lease liability that depend on changes in an index or rate (such as the Consumer Price Index) and 2) payments based on future performance or usage of the underlying assets. During the year, the University did not recognize any variable payment amounts. The lease liability includes $43,319,492 for a use agreement with the Centennial Authority (a component unit of the State of North Carolina) for mens basketball games at the PNC Arena (see Note 18). The use agreement has a remaining lease term of 72 years.
The Universitys lessee arrangements at June 30, 2024, are summarized below (excluding short-term leases):
Number Lease of Lease Liabilities Current Interest Rate/
Classi"cation:
Contracts June 30, 2024 Portion Lease Terms (1)
Ranges Lessee:
Right-to-Use Leased Buildings 39 82,373,523 $
11,860,443 40 years 0.316% - 10%
Right-to-Use Leased Machinery and Equipment 7
11,632,083 2,293,512 5 years 1.527% - 6%
Total 46 94,005,606 $
14,153,955 (1) The lease terms were calculated using weighted averages based on lease payable amounts.
63 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT C.
Subscription-Based Information Technology Arrangements (SBITAs) - The University enters SBITAs for the right to use information technology software. The SBITAs expire at various dates, and some have renewal options.
Subscription liabilities and the related right-to-use subscription assets are recorded based on the present value of expected payments over the term of the respective SBITA. The expected payments are discounted using the interest rate stated per the SBITA contract, or the Universitys estimated incremental borrowing rate if there is no stated contractual interest rate.
Measurement of the subscription liability excluded the following variable payment amounts: 1) the increase or decrease in payments after the initial measurement of the subscription liability that depend on changes in an index or rate (such as the Consumer Price Index) and 2) payments based on future performance or usage of the underlying assets. During the year, the University did not recognize any variable payment amounts.
The Universitys SBITAs at June 30, 2024, are summarized below (excluding short-term SBITAs):
Subscription (SBITA)
Number Liabilities Current SBITA Terms and SBITA:
of SBITAs June 30, 2024 Portion Conditions (1)
Interest Rate Right-to-Use Subscription Assets 19 9,444,719 $
3,752,234 3.24 years 4.1%
(1) The SBITA terms were calculated using weighted averages based on subscription liability amounts..
Annual Requirements Lease Liabilities Subscription (SBITA) Liabilities Fiscal Year Principal Interest Principal Interest 2025 14,153,955 2,256,185 3,752,234 291,219 2026 10,962,917 1,894,157 3,122,718 157,824 2027 9,250,732 1,582,360 1,620,523 66,634 2028 6,607,417 1,429,429 949,244 10,150 2029 6,664,241 1,316,193 2030-2034 3,046,855 6,570,555 2035-2039 6,044,292 2040-2044 6,114,707 2045-2049 6,128,475 2050-2054 6,084,086 2055-2059 5,964,862 2060-2064 5,758,288 2065-2069 2,827,800 5,436,759 2070-2074 4,033,391 4,988,572 2075-2079 5,332,397 4,386,051 2080-2084 6,866,121 3,602,535 2085-2089 8,677,342 2,599,376 2090-2094 10,802,477 1,344,616 2095-2096 4,779,961 121,575 Total Requirements 94,005,606 73,623,073 9,444,719 525,827 D.
Annual Requirements - The annual requirements to pay principal and interest on leases and SBITAs at June 30, 2024, are as follows:
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 64 Note 11 - Net Position Unrestricted net position has been signi"cantly affected by transactions resulting from the recognition of deferred out"ows of resources, deferred in"ows of resources, and related long-term liabilities, as shown in the following table:
Amount Net Pension Liability and Related Deferred Out"ows of Resources and Deferred In"ows of Resources (148,073,177)
Net OPEB Liability and Related Deferred Out"ows of Resources and Deferred In"ows of Resources (1,108,085,955)
Effect on Unrestricted Net Position (1,256,159,132)
Total Unrestricted Net Position Before Recognition of Deferred Out"ows of Resources, Deferred In"ows of Resources, and Related Long-Term Liabilities 521,327,191 Total Unrestricted Net Position (734,831,941)
See Notes 14 and 15 for detailed information regarding the amortization of the deferred out"ows of resources and deferred in"ows of resources relating to pensions and OPEB, respectively.
Note 12 - Revenues Less Scholarship Less Gross Discounts Allowance for Net Revenues and Allowances Uncollectibles Revenues Operating Revenues:
Student Tuition and Fees, Net 510,109,132 $
127,910,456 169,736 $
382,028,940 Sales and Services, Net 375,680,196 $
29,426,374 531,202 $
345,722,620 Other Revenues, Net 26,232,932 $
558,552 $
25,674,380 A summary of discounts and allowances by revenue classi"cation is presented as follows:
65 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Note 13 - Operating Expenses by Function Salaries and Bene"ts Supplies and Services Scholarships and Fellowships Utilities Depreciation/
Amortization Total Instruction 498,818,544 $
74,282,769 $
6,821 $
568,108,134 Research 241,300,881 140,936,061 899,409 383,136,351 Public Service 104,399,931 48,928,104 910,539 154,238,574 Academic Support 62,929,402 52,258,635 73,747 115,261,784 Student Services 27,463,712 17,927,919 16,950 45,408,581 Institutional Support 114,698,258 28,352,454 54,272 143,104,984 Operations and Maintenance of Plant 50,732,596 31,400,416 26,609,500 108,742,512 Student Financial Aid 1,228,484 1,476,922 55,645,018 58,350,424 Auxiliary Enterprises 119,989,913 107,751,105 8,588,792 236,329,810 Depreciation/Amortization 153,764,780 153,764,780 Total Operating Expenses 1,216,561,721 $
503,314,385 $
55,645,018 $
37,160,030 $
153,764,780 $
1,966,445,934 The Universitys operating expenses by functional classi"cation are presented as follows:
Note 14 - Pension Plans A.
De"ned Bene"t Plan Plan Administration: The State of North Carolina administers the Teachers and State Employees Retirement System (TS-ERS) plan. This plan is a cost-sharing, multiple-employer, de"ned bene"t pension plan established by the State to provide pension bene"ts for general employees and law enforcement of"cers (LEOs) of the State, general employees and LEOs of its component units, and employees of Local Education Agencies (LEAs) and charter schools not in the reporting entity.
Membership is comprised of employees of the State (state agencies and institutions), universities, community colleges, and certain proprietary component units along with the LEAs and charter schools that elect to join the Retirement System.
Bene"t provisions are established by General Statute 135-5 and may be amended only by the North Carolina General As-sembly.
Bene"ts Provided: TSERS provides retirement and survivor bene"ts. Retirement bene"ts are determined as 1.82% of the members average "nal compensation times the members years of creditable service. A members average "nal compen-sation is calculated as the average of a members four highest consecutive years of compensation. General employee plan members are eligible to retire with unreduced retirement bene"ts at age 65 with "ve years of membership service, at age 60 with 25 years of creditable service, or at any age with 30 years of creditable service. General employee plan members are eligible to retire with reduced retirement bene"ts at age 50 with 20 years of creditable service or at age 60 with "ve years of membership service. Survivor bene"ts are available to eligible bene"ciaries of general members who die while in active service or within 180 days of their last day of service and who also have either completed 20 years of creditable service regardless of age or have completed "ve years of service and have reached age 60. Eligible bene"ciaries may elect to receive a monthly Survivors Alternate Bene"t for life in lieu of the return of the members contributions that is generally available to bene"ciaries of deceased members. The plan does not provide for automatic post-retirement bene"t increases.
Contributions: Contribution provisions are established by General Statute 135-8 and may be amended only by the North Carolina General Assembly. Plan members are required to contribute 6% of their annual pay. The contribution rate for employers is set each year by the North Carolina General Assembly in the Appropriations Act and may not be less than the contribution rate required of plan members. The TSERS Board of Trustees establishes a funding policy from which an accrued liability rate and a normal contribution rate are developed by the consulting actuary. The sum of those two rates developed under the funding policy is the actuarially determined contribution rate (ADC). The TSERS Board of Trustees may further adopt a contribution rate policy that is higher than the ADC known as the required employer contribution to be rec-ommended to the North Carolina General Assembly. The Universitys contractually-required contribution rate for the year
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 66 ended June 30, 2024 was 17.64% of covered payroll. Plan members contributions to the pension plan were $25,039,566, and the Universitys contributions were $73,616,323 for the year ended June 30, 2024.
The TSERS plans "nancial information, including all information about the plans assets, deferred out"ows of resources, liabilities, deferred in"ows of resources, and "duciary net position, is included in the State of North Carolinas "scal year 2023 Annual Comprehensive Financial Report. An electronic version of this report is available on the North Carolina Of"ce of the State Controllers website at https://www.osc.nc.gov/ or by calling the State Controllers Financial Reporting Section at 919-707-0500.
TSERS Basis of Accounting: The "nancial statements of the TSERS plan are prepared using the accrual basis of account-ing. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions are recognized when due and the employer has a legal requirement to provide the contributions. Bene"ts and refunds are recognized when due and payable in accordance with the terms of each plan. For purposes of measuring the net pension liability, deferred out"ows of resources and deferred in"ows of resources related to pensions, and pension expense, infor-mation about the "duciary net position of the TSERS plan, and additions to/deductions from the TSERS plans "duciary net position have been determined on the same basis as they are reported by TSERS.
Methods Used to Value TSERS Investment: Pursuant to North Carolina General Statutes, the State Treasurer is the custo-dian and administrator of the retirement systems. The State Treasurer maintains various investment portfolios in its External Investment Pool. TSERS and other pension plans of the State of North Carolina participate in the Long-Term Investment, Fixed Income Investment, Equity Investment, Real Estate Investment, Alternative Investment, Opportunistic Fixed Income Investment, and In"ation Sensitive Investment portfolios. The Fixed Income Asset Class includes the Long-Term Invest-ment and Fixed Income Investment portfolios. The Global Equity Asset Class includes the Equity Investment portfolio.
The investment balance of each pension trust fund represents its share of the fair value of the net position of the various portfolios within the External Investment Pool. Detailed descriptions of the methods and signi"cant assumptions regarding investments of the State Treasurer are provided in the 2023 Annual Comprehensive Financial Report.
Net Pension Liability: At June 30, 2024, the University reported a liability of $366,706,935 for its proportionate share of the collective net pension liability. The net pension liability was measured as of June 30, 2023. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2022, and update procedures were used to roll forward the total pension liability to June 30, 2023. The Universitys proportion of the net pension liability was based on a projection of the present value of future salaries for the University relative to the projected present value of future salaries for all participating employers, actuarially-determined. As of June 30, 2023, the Universitys proportion was 2.19954%, which was an increase of 0.11042 from its proportion measured as of June 30, 2022, which was 2.08912%.
Actuarial Assumptions: The following table presents the actuarial assumptions used to determine the total pension liability for the TSERS plan at the actuarial valuation date:
Valuation Date 12/31/2022 In"ation 2.5%
Salary Increases*
3.25% - 8.05%
Investment Rate of Return**
6.5%
- Salary increases include 3.25% in"ation and productivity factor.
- Investment rate of return includes in"ation assumption and is net of pension plan investment expense.
TSERS currently uses mortality tables that vary by age, gender, employee group (i.e. teacher, general, law enforcement of"cer) and health status (i.e. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover signi"cant portions of the U.S. public plan population. The mortality rates also contain a provision to re"ect future mortality improvements.
The actuarial assumptions used in the December 31, 2022 valuation were based on the results of an actuarial experience review for the period January 1, 2015 through December 31, 2019.
Future ad hoc cost-of-living adjustment amounts are not considered to be substantively automatic and are therefore not included in the measurement. The projected long-term investment returns and in"ation assumptions are developed through
67 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT review of current and historical capital markets data, sell-side investment research, consultant whitepapers, and histori-cal performance of investment strategies. Fixed income return projections re"ect current yields across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated for multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis of the equity risk premium and the "xed income return projections. Other asset categories and strategies return projections re"ect the foregoing and historical data analysis. These projections are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected in"ation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plans target asset allocation as of June 30, 2023 (the measurement date) are summarized in the following table:
Asset Class Long-Term Expected Real Rate of Return Fixed Income 0.9%
Global Equity 6.5%
Real Estate 5.9%
Alternatives 8.2%
Opportunistic Fixed Income 5.0%
In"ation Sensitive 2.7%
Net Pension Liability 1% Decrease (5.5%)
Current Discount Rate (6.5%)
1% Increase (7.5%)
629,549,875 366,706,935 149,870,035 The information in the preceding table is based on 30-year expectations developed with an investment consulting "rm as part of a study that was completed in early 2022, and is part of the asset, liability, and investment policy of the North Caro-lina Retirement Systems. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized "gures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term in"ation as-sumption of 2.25%. Return projections do not include any excess return expectations over benchmark averages. All rates of return and in"ation are annualized. The long-term expected real rate of return for the Bond Index Investment Pool as of June 30, 2023 is 0.78%.
Discount Rate: The discount rate used to measure the total pension liability was 6.5% for the December 31, 2022 valuation.
The discount rate is in line with the long-term nominal expected return on pension plan investments. The calculation of the net pension liability is a present value calculation of the future net pension payments. These net pension payments assume that contributions from plan members will be made at the current statutory contribution rate and that contributions from employers will be made at the contractually required rates, actuarially determined. Based on those assumptions, the pen-sion plans "duciary net position was projected to be available to make all projected future bene"t payments of the current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected bene"t payments to determine the total pension liability.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of the plan at June 30, 2023 calculated using the discount rate of 6.5%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (5.5%) or 1-percentage-point higher (7.5%) than the current rate:
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 68 Employer Balances of Deferred Out"ows of Resources and Deferred In"ows of Resources Related to Pensions by Classi"cation:
Deferred Out"ows Deferred In"ows of Resources of Resources Difference Between Actual and Expected Experience 29,895,290 2,706,556 Changes of Assumptions 12,878,263 Net Difference Between Projected and Actual Earnings on Pension Plan Investments 102,127,854 Change in Proportion and Differences Between Employers Contributions and Proportionate Share of Contributions 8,503,593 5,681,009 Contributions Subsequent to the Measurement Date 73,616,323 Total 227,021,323 8,387,565 Schedule of the Net Amount of the Employers Balances of Deferred Out"ows of Resources and Deferred In"ows of Resources That will be Recognized in Pension Expense:
Year Ending June 30:
Amount 2025 45,594,775 2026 26,498,180 2027 68,561,889 2028 4,362,591 Total 145,017,435 Deferred Out"ows of Resources and Deferred In"ows of Resources Related to Pensions: For the year ended June 30, 2024, the University recognized pension expense of $93,827,294. At June 30, 2024, the University reported deferred out-
"ows of resources and deferred in"ows of resources related to TSERS from the following sources:
The amount reported as deferred out"ows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the "scal year ending June 30, 2025. Other amounts reported as deferred out"ows of resources and deferred in"ows of resources related to TSERS will be recognized as pension expense as follows:
B.
De"ned Contribution Plan - The Optional Retirement Program (ORP) is a de"ned contribution pension plan that provides retirement bene"ts with options for payments to bene"ciaries in the event of the participants death. Faculty and staff of the University may join the ORP instead of TSERS. The ORP is administered by the UNC System.
Bene"ts are provided by means of contracts issued and administered by the privately-operated Teachers Insurance and An-nuity Association and Fidelity Investments. Participants eligibility and contributory requirements are established in General Statute 135-5.1 and may be amended only by the North Carolina General Assembly. Participants are always fully vested in their own contributions to the plan and their investment earnings. Participants are fully vested in the Universitys contribu-tions and earnings after "ve years of participating in the ORP.
Participants contribute 6% of compensation and the University contributes 6.84%. For the year ended June 30, 2024,
69 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT the University had a total payroll of $1,026,488,530 of which $405,199,816 was covered under ORP. Total employee and employer contributions for pension bene"ts for the year were $24,311,989 and $27,715,667, respectively. The amount of pension expense recognized in the current year related to ORP is equal to the employer contributions. Forfeitures reduced the Universitys pension expense during the current "scal year by $9,578,521.
Note 15 - Other Postemployment Bene"ts The University participates in two postemployment bene"t plans, the Retiree Health Bene"t Fund and the Disability Income Plan of North Carolina, that are administered by the State of North Carolina as pension and other employee bene"t trust funds. Each plans "nancial information, including all information about the plans assets, deferred out"ows of resources, liabilities, deferred in"ows of resources, and "duciary net position, is included in the State of North Carolinas "scal year 2023 Annual Comprehensive Financial Report. An electronic version of this report is available on the North Carolina Of"ce of the State Controllers website at https://www.osc.nc.gov/ or by calling the State Controllers Financial Reporting Section at 919-707-0500.
A.
Summary of Signi"cant Accounting Policies and Plan Asset Matters Basis of Accounting: The "nancial statements of these plans were prepared using the accrual basis of accounting.
Employer contributions are recognized when due and the employer has made a formal commitment to provide the contributions. Bene"ts are recognized when due and payable in accordance with the terms of each plan. For purposes of measuring the net other postemployment bene"ts (OPEB) liability, deferred out"ows of resources and deferred in-
"ows of resources related to OPEB, and OPEB expense, information about the "duciary net position of each plan, and additions to/deductions from each plans "duciary net position have been determined on the same basis as they are reported by the plans.
Methods Used to Value Plan Investments: Pursuant to North Carolina General Statutes, the State Treasurer is the cus-todian and administrator of the other postemployment bene"t funds. The State Treasurer maintains various investment portfolios in its External Investment Pool. The Retiree Health Bene"t Fund participates in the External Investment Pool.
The Disability Income Plan is invested in the Short-Term Investment Portfolio of the External Investment Pool and the Bond Index External Investment Pool. The investment balance of each other employee bene"t trust fund represents its share of the fair value of the net position of the various portfolios within the pool. Detailed descriptions of the methods and signi"cant assumptions regarding investments of the State Treasurer are provided in the 2023 Annual Comprehen-sive Financial Report.
B.
Plan Descriptions
- 1. Health Bene"ts Plan Administration: The State of North Carolina administers the North Carolina State Health Plan for Teachers and State Employees, referred to as the State Health Plan (the Plan), a healthcare plan exclusively for the bene"t of employees of the State, the University of North Carolina System, community colleges, and certain other component units. In ad-dition, Local Education Agencies (LEAs), charter schools, and some select local governments that are not part of the States "nancial reporting entity also participate. Health bene"t programs and premium rates are determined by the State Treasurer upon approval of the Plan Board of Trustees.
The Retiree Health Bene"t Fund (RHBF) has been established by Chapter 135-7, Article 1 of the General Statutes as a fund to provide health bene"ts to retired and disabled employees and their applicable bene"ciaries. RHBF is a cost-sharing, multiple-employer, de"ned bene"t healthcare plan, exclusively for the bene"t of former employees of the State, the University of North Carolina System, and community colleges. In addition, LEAs, charter schools, and some select local governments that are not part of the States "nancial reporting entity also participate.
By statute, RHBF is administered by the Board of Trustees of the Teachers and State Employees Retirement System (TSERS). RHBF is supported by a percent of payroll contribution from participating employing units. Each year the per-centage is set in legislation, as are the maximum per retiree contributions from RHBF to the Plan. The State Treasurer, with the approval of the Plan Board of Trustees, then sets the employer contributions (subject to the legislative cap) and the premiums to be paid by retirees, as well as the health bene"ts to be provided through the Plan.
Bene"ts Provided: Plan bene"ts received by retired employees and disabled employees from RHBF are OPEB. The healthcare bene"ts for retired and disabled employees who are not eligible for Medicare are the same as for active em-
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 70 ployees as described in Note 16. The plan options change when the former employees become eligible for Medicare.
The bene"ts provided include medical and pharmacy coverage for employees and their dependents. Non-Medicare eligible members have two self-funded options administered by the State Health Plan while Medicare members have three options, including one self-funded option and two fully-insured Medicare Advantage/Prescription Drug Plan op-tions. Self-funded medical and pharmacy claims costs are shared between the covered member and the State Health Plan. If the self-funded plan is elected by a Medicare eligible member, the coverage is secondary to Medicare. Fully-insured claims include cost sharing from covered members with the remaining balance paid by the fully-insured carrier.
Those former employees who are eligible to receive medical bene"ts from RHBF are long-term disability bene"ciaries of the Disability Income Plan of North Carolina and retirees of TSERS, the Consolidated Judicial Retirement System (CJRS), the Legislative Retirement System (LRS), the University Employees Optional Retirement Program (ORP), and a small number of local governments, with "ve or more years of contributory membership service in their retirement sys-tem prior to disability or retirement, with the following exceptions: for employees "rst hired on or after October 1, 2006, and members of the North Carolina General Assembly "rst taking of"ce on or after February 1, 2007, future coverage as retired employees and retired members of the North Carolina General Assembly is subject to the requirement that the future retiree have 20 or more years of retirement service credit in order to receive coverage on a noncontributory basis. Employees "rst hired on or after October 1, 2006 and members of the North Carolina General Assembly "rst tak-ing of"ce on or after February 1, 2007 with 10 but less than 20 years of retirement service credit are eligible for cover-age on a partially contributory basis. For such future retirees, the State will pay 50% of the Plans total noncontributory premium. Employees "rst hired on or after October 1, 2006 and members of the North Carolina General Assembly "rst taking of"ce on or after February 1, 2007 with "ve but less than 10 years of retirement service credit are eligible for coverage on a fully contributory basis.
Section 35.21 (c) & (d) of Session Law 2017-57 repealed retiree medical bene"ts for employees "rst hired on or after January 1, 2021. The legislation amended Chapter 135, Article 3B of the General Statutes to require that retirees must earn contributory retirement service in the TSERS (or in an allowed local system unit), CJRS, or LRS prior to January 1, 2021, and not withdraw that service, in order to be eligible for retiree medical bene"ts under the amended law.
Consequently, members "rst hired on and after January 1, 2021 will not be eligible to receive retiree medical bene"ts.
RHBFs bene"t and contribution provisions are established by Chapter 135-7, Article 1, and Chapter 135, Article 3B of the General Statutes and may be amended only by the North Carolina General Assembly. RHBF does not provide for automatic post-retirement bene"t increases.
Contributions: Contribution rates to RHBF, which are intended to "nance bene"ts and administrative expenses on a pay-as-you-go basis, are determined by the North Carolina General Assembly in the Appropriations Act. The Universitys contractually-required contribution rate for the year ended June 30, 2024 was 7.14% of covered payroll. The Universitys contributions to the RHBF were $58,728,350 for the year ended June 30, 2024.
In "scal year 2022, the Plan transferred $180.51 million to RHBF as a result of cost savings to the Plan over a span of six years. For "nancial reporting purposes, the transfer was recognized as a nonemployer contributing entity contribution.
The contribution was allocated among the RHBF employers and recorded as noncapital contributions. For the "scal year ended June 30, 2024, the University recognized noncapital contributions for RHBF of $1,334,817.
- 2. Disability Income Plan Administration: As discussed in Note 16, short-term and long-term disability bene"ts are provided through the Disability Income Plan of North Carolina (DIPNC), a cost-sharing, multiple-employer de"ned bene"t plan, to the eligible members of TSERS which includes employees of the State, the University of North Carolina System, community colleges, certain participating component units and LEAs which are not part of the States reporting entity, and the University Employees ORP. By statute, DIPNC is administered by the Department of State Treasurer and the Board of Trustees of TSERS.
Bene"ts Provided: Long-term disability bene"ts are payable as an OPEB from DIPNC after the conclusion of the short-term disability period or after salary continuation payments cease, whichever is later, while the employee is disabled and does not meet the TSERS conditions for unreduced service retirement. An employee is eligible to receive long-term disability bene"ts provided the following requirements are met: (1) the employee has "ve or more years of contributing membership service in TSERS or the University Employees ORP, earned within 96 months prior to becoming disabled or cessation of salary continuation payments, whichever is later; (2) the employee must make application to receive long-term bene"ts within 180 days after the conclusion of the short-term disability period or after salary continuation payments cease or after monthly payments for Workers Compensation cease (excluding monthly payments for per-
71 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT manent partial bene"ts), whichever is later; (3) the employee must be certi"ed by the Medical Board to be mentally or physically disabled for the further performance of his/her usual occupation; (4) the disability must have been continu-ous, likely to be permanent, and incurred at the time of active employment; (5) the employee must not be eligible to receive an unreduced retirement bene"t from TSERS; and (6) the employee must terminate employment as a perma-nent, full-time employee. A general employee is eligible to receive an unreduced retirement bene"t from TSERS after:
(1) reaching the age of 65 and completing "ve years of membership service; (2) reaching the age of 60 and completing 25 years of creditable service; or (3) completing 30 years of creditable service, at any age.
For employees who had "ve or more years of membership service as of July 31, 2007, during the "rst 36 months of the long-term disability period, the monthly long-term disability bene"t is equal to 65% of one-twelfth of an employees annual base rate of compensation last payable to the participant or bene"ciary prior to the beginning of the short-term disability period, plus the like percentage of one-twelfth of the annual longevity payment and local supplements to which the participant or bene"ciary would be eligible. The monthly bene"ts are subject to a maximum of $3,900 per month reduced by any primary Social Security disability bene"ts, by an amount equal to the monthly primary Social Security retirement bene"t to which the employee might be entitled should the employee be at least age 62, and by monthly payments for Workers Compensation to which the participant or bene"ciary may be entitled, but the bene"ts payable shall be no less than $10 a month. After the "rst 36 months of the long-term disability, the long-term bene"t is calculated in the same manner as described above except the monthly bene"t is reduced by an amount equal to a monthly primary Social Security disability bene"t to which the participant or bene"ciary might be entitled had Social Security disability bene"ts been awarded. When an employee quali"es for an unreduced service retirement allowance from TSERS, the bene"ts payable from DIPNC will cease, and the employee will commence retirement under TSERS or the University Employees ORP.
For employees who had less than "ve years of membership service as of July 31, 2007, and meet the requirements for long-term disability on or after August 1, 2007, bene"ts are calculated in the same manner as described above except that after the "rst 36 months of the long-term disability, no further long-term disability bene"ts are payable unless the employee has been approved and is in receipt of primary Social Security bene"ts.
Bene"t and contribution provisions are established by Chapter 135, Article 6, of the General Statutes and may be amended only by the North Carolina General Assembly. The plan does not provide for automatic post-retirement bene"t increases.
Contributions: Although DIPNC operates on a calendar year, disability income bene"ts are funded by actuarially deter-mined employer contributions that are established in the Appropriations Act by the North Carolina General Assembly and coincide with the States "scal year. The Universitys contractually-required contribution rate for the year ended June 30, 2024 was 0.11% of covered payroll. The Universitys contributions to DIPNC were $904,779 for the year ended June 30, 2024.
C.
Net OPEB Liability Retiree Health Bene"t Fund: At June 30, 2024, the University reported a liability of $1,016,074,701 for its proportionate share of the collective net OPEB liability for RHBF. The net OPEB liability was measured as of June 30, 2023. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of December 31, 2022, and update procedures were used to roll forward the total OPEB liability to June 30, 2023. The Universitys proportion of the net OPEB liability was based on a projection of the present value of future salaries for the University relative to the projected present value of future salaries for all participating employers, actuarially-determined. As of June 30, 2023, the Universitys proportion was 3.81303%, which was an increase of 0.08800 from its proportion measured as of June 30, 2022, which was 3.72503%.
Disability Income Plan of North Carolina: At June 30, 2024, the University reported a liability of $1,031,656 for its propor-tionate share of the collective net OPEB liability for DIPNC. The net OPEB liability was measured as of June 30, 2023. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of December 31, 2022, and update procedures were used to roll forward the total OPEB liability to June 30, 2023. The Universitys propor-tion of the net OPEB liability was based on a projection of the present value of future salaries for the University relative to the projected present value of future salaries for all participating employers, actuarially-determined. As of June 30, 2023, the Universitys proportion was 3.87899%, which was an increase of 0.19432 from its proportion measured as of June 30, 2022, which was 3.68467%.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 72 Actuarial Assumptions: The total OPEB liabilities for RHBF and DIPNC were determined by actuarial valuations as of De-cember 31, 2022, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise speci"ed. The total OPEB liabilities were then rolled forward to June 30, 2023 utilizing update procedures incor-porating the actuarial assumptions.
Asset Class Long-Term Expected Real Rate of Return Fixed Income 0.9%
Global Equity 6.5%
Real Estate 5.9%
Alternatives 8.2%
Opportunistic Fixed Income 5.0%
In"ation Sensitive 2.7%
Retiree Disability Health Bene"t Income Plan Fund of N.C.
Valuation Date 12/31/2022 12/31/2022 In"ation 2.5%
2.5%
Salary Increases*
3.25% - 8.05%
3.25% - 8.05%
Investment Rate of Return**
6.5%
3.0%
Healthcare Cost Trend Rate - Medical***
6.5% grading down to 5% by 2029 N/A Healthcare Cost Trend Rate - Prescription Drug***
10% grading down to 5% by 2033 N/A Healthcare Cost Trend Rate - Prescription Drug Rebates***
7% grading down to 5% by 2033 N/A Healthcare Cost Trend Rate - Medicare Advantage***
0% through 2025, 5% thereafter N/A Healthcare Cost Trend Rate - Administrative***
3.0%
N/A
- Salary increases include 3.25% in"ation and productivity factor.
- Investment rate of return is net of OPEB plan investment expense, including in"ation.
- Disability Income Plan of NC eliminated employer reimbursements from the Plan (which included State Health Plan premiums) effective July 1, 2019.
N/A - Not Applicable The OPEB plans currently use mortality tables that vary by age, gender, employee group (i.e. teacher, other educational employee, general employee, or law enforcement of"cer) and health status (i.e. disabled or not disabled). The current mor-tality rates are based on published tables and studies that cover signi"cant portions of the U.S. public plan population. The healthy mortality rates also contain a provision to re"ect future mortality improvements.
The projected long-term investment returns and in"ation assumptions are developed through review of current and histori-cal capital markets data, sell-side investment research, consultant whitepapers, and historical performance of investment strategies. Fixed income return projections re"ect current yields across the U.S. Treasury yield curve and market expecta-tions of forward yields projected and interpolated for multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis of the equity risk premium and the "xed income return projections.
Other asset categories and strategies return projections re"ect the foregoing and historical data analysis. These projec-tions are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected in"ation. DIPNC is primarily invested in the Bond Index Investment Pool as of June 30, 2023.
Best estimates of real rates of return for each major asset class included in RHBFs target asset allocation as of June 30, 2023 (the measurement date) are summarized in the following table:
73 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT The information in the preceding table is based on 30-year expectations developed with an investment consulting "rm as part of a study that was completed in early 2022, and is part of the asset, liability, and investment policy of the North Caro-lina Retirement Systems. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized "gures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term in"ation as-sumption of 2.25%. Return projections do not include any excess return expectations over benchmark averages. All rates of return and in"ation are annualized. The long-term expected real rate of return for the Bond Index Investment Pool as of June 30, 2023 is 0.78%.
Actuarial valuations of the plans involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. The results of the valuations "uctuate from year to year as actual experience differs from assumptions. This includes demographic experiences (i.e., mortality and retirement) that differ from expected.
This also includes "nancial experiences (i.e., member medical costs and contributions) that vary from expected trends.
Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future.
The actuarial assumptions used for RHBF are consistent with those used to value the pension bene"ts of TSERS where ap-propriate. These assumptions are based on the most recent pension valuations available. The discount rate used for RHBF re"ects a pay-as-you-go approach.
Projections of bene"ts for "nancial reporting purposes of the plans are based on the substantive plan (the plan as under-stood by the employer and plan members) and include the types of bene"ts provided at the time of each valuation and the historical pattern of sharing of bene"t costs between the employer and plan members to that point. The RHBF is funded solely by employer contributions and bene"ts are dependent on membership requirements.
The actuarial methods and assumptions used for DIPNC include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Prior to July 1, 2019, employers received a reimbursement from DIPNC for employer costs, including the employers share of the State Health Plan premiums, incurred during the second six months of the "rst year of a members short-term disability coverage. With the elimination of the reimbursement to employers, State Health Plan premiums are no longer reimbursed by DIPNC for the bene"ts that were effective on or after July 1, 2019.
The actuarial assumptions used in the December 31, 2022 valuations were generally based on the results of an actuarial ex-perience study prepared as of December 31, 2019, as amended for updates to certain assumptions (such as medical claims and medical trend rate assumptions) implemented based on annual reviews that have occurred since that experience study.
Discount Rate: The discount rate used to measure the total OPEB liability for RHBF was 3.65% at June 30, 2023 compared to 3.54% at June 30, 2022. The projection of cash "ow used to determine the discount rate assumed that contributions from employers would be made at the current statutorily determined contribution rate. Based on the above assumptions, the plans "duciary net position was not projected to be available to make projected future bene"t payments to current plan members. As a result, a municipal bond rate of 3.65% was used as the discount rate used to measure the total OPEB li-ability. The 3.65% rate is based on the Bond Buyer 20-year General Obligation Index as of June 30, 2023.
The discount rate used to measure the total OPEB liability for DIPNC was 3.00% at June 30, 2023 compared to 3.08% at June 30, 2022. The projection of cash "ow used to determine the discount rate assumed that contributions from plan mem-bers would be made at the current contribution rate and that contributions from employers would be made at statutorily required rates, actuarially determined. Based on those assumptions, the plans "duciary net position was not projected to be available to make all projected future bene"t payments to the current plan members. In order to develop the blended discount rate of 3.00%, 3.00% was used during the period that the plan was projected to have a "duciary net position, and a municipal bond rate of 3.65% was used during the period that the plan was projected to have no "duciary net position.
The 3.65% rate is based on the Bond Buyer 20-year General Obligation Index as of June 30, 2023.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 74 Sensitivity of the Net OPEB Liability to Changes in the Discount Rate: The following presents the Universitys proportionate share of the net OPEB liability of the plans, as well as what the plans net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:
Net OPEB Liability Current Healthcare 1% Decrease Cost Trend Rates 1% Increase (Medical - 4% - 5.5%,
(Medical - 5% - 6.5%,
(Medical - 6% - 7.5%,
Pharmacy - 4% - 9%,
Pharmacy - 5% - 10%,
Pharmacy - 6% - 11%,
Pharmacy Rebate - 4% - 6%
Pharmacy Rebate - 5% - 7%
Pharmacy Rebate - 6% - 8%
Med. Advantage - 0% - 4%,
Med. Advantage - 0% - 5%,
Med. Advantage - 0% - 6%,
Administrative - 2%)
Administrative - 3%)
Administrative - 4%)
RHBF 838,860,461 1,016,074,701 1,244,587,939 Effective with the actuarial valuation as of December 31, 2021, the liability of the States potential reimbursement of costs incurred by employers was removed because the reimbursement by DIPNC was eliminated for disabilities occurring on or after July 1, 2019.
Thus sensitivity to changes in the healthcare cost trend rates is not applicable for DIPNC Net OPEB Liability 1% Decrease (2.65%)
Current Discount Rate (3.65%)
1% Increase (4.65%)
RHBF 1,198,653,053 1,016,074,701 867,376,130 1% Decrease (2.00%)
Current Discount Rate (3.00%)
1% Increase (4.00%)
DIPNC 1,240,191 1,031,656 819,320 Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates: The following presents the net OPEB liability of the plans, as well as what the plans net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:
OPEB Expense: For the "scal year ended June 30, 2024, the University recognized OPEB expense as follows:
OPEB Plan Amount RHBF 504,873 DIPNIC 1,419,436 Total OPEB Expense 1,924,309
75 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Employer Balances of Deferred Out"ows of Resources Related to OPEB by Classifcation:
RHBF DIPNC Total Differences Between Actual and Expected Experience 11,188,971 904,115 12,093,086 Changes of Assumptions 110,071,821 75,175 110,146,996 Net Difference Between Projected and Actual Earnings on OPEB Plan Investments 8,116,927 1,347,484 9,464,411 Changes in Proportion and Differences Between Employers Contributions and Proportionate Share of Contributions 28,461,363 134,573 28,595,936 Contributions Subsequent to the Measurement Date 58,728,350 904,779 59,633,129 Total 216,567,432 3,366,126 219,933,558 Deferred Out"ows of Resources and Deferred In"ows of Resources Related to OPEB: At June 30, 2024, the University reported deferred out"ows of resources and deferred in"ows of resources related to OPEB from the following sources:
Employer Balances of Deferred In"ows of Resources Related to OPEB by Classifcation:
RHBF DIPNC Total Differences Between Actual and Expected Experience 995,549 571,414 1,566,963 Changes of Assumptions 271,080,530 176,106 271,256,636 Net Difference Between Projected and Actual Earnings on OPEB Plan Investments Changes in Proportion and Differences Between Employers Contributions and Proportionate Share of Contributions 37,986,303 103,254 38,089,557 Total 310,062,382 850,774 310,913,156 Amounts reported as deferred out"ows of resources related to contributions subsequent to the measurement date will be recognized as reductions of the net OPEB liabilities related to RHBF and DIPNC in the "scal year ending June 30, 2025.
Other amounts reported as deferred out"ows of resources and deferred in"ows of resources related to OPEB will be rec-ognized as OPEB expense as follows:
Schedule of the Net Amount of the Employers Balances of Deferred Out"ows of Resources and Deferred In"ows of Resources That will be Recognized in OPEB Expense:
Year Ending June 30:
RHBF DIPNC 2025 (60,262,430) 487,085 2026 (74,417,616) 302,629 2027 (40,392,757) 479,587 2028 22,849,503 179,117 2029 89,246 Thereafter 72,909 Total (152,223,300) 1,610,573
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 76 Note 16 - Risk Management The University is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These exposures to loss are handled via a combination of methods, including participation in state-administered insurance programs, purchase of commercial insurance, and self-retention of certain risks. There have been no signi"cant reductions in insurance coverage from the previous year and settled claims have not exceeded coverage in any of the past three "scal years.
A.
Employee Bene"t Plans
- 1. State Health Plan University employees are provided comprehensive major medical care bene"ts. Coverage is funded by contributions to the State Health Plan (Plan), a discretely presented component unit of the State of North Carolina. The Plan is funded by employer and employee contributions. The Plan has contracted with third parties to process claims. See Note 15, Other Postemployment Bene"ts, for additional information regarding retiree health bene"ts.
- 2. Death Bene"t Plan of North Carolina Term life insurance (death bene"ts) of $25,000 to $50,000 is provided to eligible workers who enroll in the Teachers and State Employees Retirement System. This Death Bene"t Plan is administered by the State Treasurer and funded via employer contributions. The employer contribution rate was 0.13% for the current "scal year.
- 3. Disability Income Plan Short-term and long-term disability bene"ts are provided to University employees through the Disability Income Plan of North Carolina (DIPNC), part of the States Pension and Other Employee Bene"t Trust Funds. Short-term bene"ts are paid by the University for up to twelve months. The Board of Trustees of the DIPNC may extend the short-term disability bene"ts for up to an additional twelve months. During the extended period of short-term disability bene"ts, payments are made directly by the DIPNC to the bene"ciary. As discussed in Note 15, long-term disability bene"ts are payable as other postemployment bene"ts from DIPNC after the conclusion of the short-term disability period or after salary continuation payments cease, whichever is later, for as long as an employee is disabled.
B.
Other Risk Management and Insurance Activities
- 1. Automobile, Fire, and Other Property Losses The University is required to maintain all risk (Special Perils) coverage on all state-owned buildings and contents through the State Property Fire Insurance Fund (Fund), an internal service fund of the State managed by the NC Department of Insurance. Losses covered by the Fund are subject to a $5,000 per occurrence deductible. However, some agencies have chosen a higher option deductible for a reduction in premium. Flood insurance can also be purchased as separate coverage for high-risk "ood exposures.
All state-owned vehicles are covered by liability insurance through a private insurance company and handled by the North Carolina Department of Insurance. The liability limits for losses are $1,000,000 per claim and $10,000,000 per occurrence. The University pays premiums to the North Carolina Department of Insurance for the coverage.
- 2.
Public Of"cers and Employees Liability Insurance The risk of tort claims of up to $1,000,000 per claimant is retained under the authority of the State Tort Claims Act.
In addition, the State provides excess public of"cers and employees liability insurance up to $2,000,000 per claim and $10,000,000 in the aggregate per "scal year via contract with private insurance companies. The University pays the premium, based on a composite rate, directly to the private insurers.
- 3. Employee Dishonesty and Computer Fraud The University is protected for losses from employee dishonesty and computer fraud. This coverage is with a pri-vate insurance company and is handled by the North Carolina Department of Insurance. Universities are charged a premium by the private insurance company. Coverage limit is $5,000,000 per occurrence. The private insurance company pays 90% of each loss less a $100,000 deductible.
77 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT
- 4. Statewide Workers Compensation Program The North Carolina Workers Compensation Program provides bene"ts to workers injured on the job. All employees of the State and its component units are included in the program. When an employee is injured, the Universitys primary responsibility is to arrange for and provide the necessary treatment for work related injury. The University is responsible for paying medical bene"ts and compensation in accordance with the North Carolina Workers Compen-sation Act. The University retains the risk for workers compensation.
Additional details on the state-administered risk management programs are disclosed in the States Annual Compre-hensive Financial Report, issued by the Of"ce of the State Controller.
- 5. Other Insurance Held by the University The University purchased other authorized coverage from private insurance companies through the North Carolina Department of Insurance, the States Agent of Record. The types of insurance policies purchased include: medical professional liability, veterinary professional liability, "ne arts property, master crime, inland marine property, musical instruments, campers accident and sickness coverage, athletic accident, boiler and machinery, watercraft, oceano-graphic equipment, cyber and data breach, student health insurance, business travel, unmanned aerial systems liability, equine mortality, event cancellation, liquor liability, internship liability, volunteer liability, and nuclear energy liability.
Note 17 - Commitments and Contingencies A.
Commitments - The University has established an encumbrance system to track its outstanding commitments on construction projects and other purchases. Outstanding commitments on construction contracts were $190,227,177 at June 30, 2024.
B.
Pending Litigation and Claims - As previously reported, the NC School Boards Association, et. al. "led a civil ac-tion against various state of"cials in their of"cial capacity seeking a judicial determination as to whether the state constitu-tion requires certain monetary payments collected by state agencies to be paid to the local county school funds. On July 1, 2005, the NC Supreme Court held in favor of the school boards with regard to parking "nes. The matter was remanded back to the trial court for disposition in accordance with the Superior Courts decision. On August 8, 2008, the Wake County Superior Court issued judgment that the estimated amounts collected from January 1, 1996, to June 30, 2005, by UNC Campuses belong and should have been paid to the public schools of the State by payment to the States Civil Penalty and Forfeiture Fund. The manner in which the judgment will be settled is uncertain and is to be determined by the North Caro-lina General Assembly. At issue for NC State University is approximately $6,749,207 in transportation "nes collected since January 1, 1996, to June 30, 2005. Of this amount, the University has transferred $2,273,817 to the Of"ce of State Budget and Management leaving approximately $4,475,390 still outstanding. Since July 2005, the University has been forwarding transportation "ne collections, less collection costs, to the Of"ce of State Budget and Management on a monthly basis.
The University is a party to other litigation and claims in the ordinary course of its operations. Since it is not possible to predict the ultimate outcome of these matters, no provision for any liability has been made in the "nancial statements.
University management is of the opinion that the liability, if any, for any of these matters will not have a material adverse effect on the "nancial position of the University.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 78 Foundations - There are 7 separately incorporated nonpro"t foundations associated with the University. These foundations are North Carolina State Alumni Association, Inc., NC State Engineering Foundation, Inc., NC State Natural Resources Foundation, Inc.,
North Carolina State University College of Sciences Foundation, Inc., North Carolina Veterinary Medical Foundation, Inc., North Carolina Textile Foundation, Inc., and NC State Student Aid Association, Inc.
These organizations serve, in conjunction with the Universitys component units (See Note 1A), as the primary fundraising arm of the University through which individuals, corporations, and other organizations support University programs by providing scholarships, fellowships, faculty salary supplements, and unrestricted funds to speci"c colleges and the Universitys overall academic environment. The Universitys "nancial statements do not include the assets, liabilities, net position, or operational transactions of the foundations, except for amounts reported within the "duciary statements and support from each organization to the University.
This support approximated $55,936,293 for the year ended June 30, 2024.
Nonpro"t Corporation - The Centennial Authority (Authority) was created by the 1995 General Assembly (Senate Bill 606) for the purpose of studying, designing, planning, constructing, owning, promoting, "nancing and operating a regional facility on land owned by the State. Prior to this act, the General Assembly authorized the construction by the University of a facility to be known as the Entertainment and Sports Arena (ESA). This facility serves as a regional sports entertainment center and is available for cultural performances, sporting events and other activities of the University or of other entities (the Centennial Center project). With the 1995 legislation, the Centennial Center project was transferred to the Authority.
The Authority entered into a Ground Lease with the State of North Carolina to lease land for the ESA for a period of 99 years at an annual rent of $1. The University entered into a Use Agreement with the Authority. Both parties agreed that the University shall be the primary and preferred user of all areas of the ESA. Per Agreement the University is required to pay the greater of 10% of gross ticket revenues or $60,449 for each mens and $26,447 for each womens basketball game to compensate the Authority for facility rental and operating expenses for games held during "scal year 2024. Rent and expense payments for miscellaneous events will be negotiated on an event-by-event basis based on the availability of the ESA and the anticipated attendance. In "scal year 2012, the name of the ESA was changed to PNC Arena.
Note 18 - Related Parties
79 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Note 19 - Blended Component Units Condensed combining information for the Universitys blended component units for the year ended June 30, 2024, is presented as follows:
Condensed Statement of Net Position Proprietary Fund June 30, 2024 NC State University Partnership Corporation North Carolina State University NC State Investment Fund, Inc.
Eliminations Total ASSETS Current Assets 633,574,414 $
56,185,235 $
4,778,686 $
694,538,335 Capital Assets, Net 2,406,117,450 22,809,204 2,428,926,654 Other Noncurrent Assets 282,305,801 801,987,540 1 10,140,576 1,094,433,917 Primary Government Receivable from Component Unit 2,785,750 (2,785,750)
Total Assets 3,324,783,415 858,172,775 37,728,466 (2,785,750) 4,217,898,906 TOTAL DEFERRED OUTFLOWS OF RESOURCES 461,145,738 461,145,738 LIABILITIES Current Liabilities 241,649,522 712,745 1,686,938 244,049,205 Long-Term Liabilities, Net 2,190,495,368 2,388,108 2,192,883,476 Other Noncurrent Liabilities 72,618,604 72,618,604 Component Unit Payable to Primary Government 2,785,750 (2,785,750)
Total Liabilities 2,504,763,494 712,745 6,860,796 (2,785,750) 2,509,551,285 TOTAL DEFERRED INFLOWS OF RESOURCES 340,962,992 9,665,834 350,628,826 NET POSITION Net Investment in Capital Assets 1,774,064,529 16,805,586 1,790,870,115 Restricted - Nonexpendable (650,273,520) 857,460,030 2 207,186,510 Restricted - Expendable 555,359,122 280,727 555,639,849 Unrestricted (738,947,464) 4,115,523 (734,831,941)
Total Net Position 940,202,667 $
857,460,030 $
21,201,836 $
1,818,864,533
- 1. Total investments in the NC State Investment Fund., Inc. audit report included $776,238,335 held in the Investment Fund for the North Carolina State University Foundation, Inc. and The North Carolina Agricultural Foundation, Inc. This amount is excluded from the University prepared "nancial state-ments and included in the accompanying component unit "nancial statements. See Note 2. It will therefore be excluded from the Condensed State-ment of Net Position and the Condensed Statement of Revenues, Expenses, and Changes in Net Position.
- 2. Restricted Nonexpendable assets are held in the NC State Investment Fund, Inc. while the associated liabilities are held in North Carolina State Uni-versity statements resulting in a negative net position before blending.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 80 NC State University Partnership Corporation North Carolina State University NC State Investment Fund, Inc.
Eliminations Total OPERATING REVENUES Operating Revenue 1,194,682,212 $
13,950,117 $
(12,377,111) $
1,196,255,218 OPERATING EXPENSES Operating Expenses 1,812,061,119 12,997,146 (12,377,111) 1,812,681,154 Depreciation/Amortization 152,530,844 1,233,936 153,764,780 Total Operating Expenses 1,964,591,963 14,231,082 (12,377,111) 1,966,445,934 Operating Loss (769,909,751)
(280,965)
(770,190,716)
NONOPERATING REVENUES (EXPENSES)
State Appropriations 658,859,310 658,859,310 Student Financial Aid 51,058,268 51,058,268 Federal Aid - COVID-19 Aid 1,571,205 1,571,205 Noncapital Contributions 115,404,626 115,404,626 Investment Income, Net 18,846,478 77,509,583 96,356,061 Other Nonoperating Revenues (Expenses)
(17,434,822) 1,048,793 (16,386,029)
Net Nonoperating Revenues 828,305,065 77,509,583 1,048,793 906,863,441 Capital Contributions 82,032,724 82,032,724 Additions to Endowments 18,376,294 18,376,294 Total Other Revenues 100,409,018 100,409,018 Trasnfers 2,234,563 (2,234,563)
Increase in Net Position 161,038,895 75,275,020 767,828 237,081,743 NET POSITION Net Position, July 1, 2023, as restated 779,163,772 782,185,010 20,434,008 1,581,782,790 Net Position, June 30, 2024 940,202,667 $
857,460,030 $
21,201,836 $
1,818,864,533 Condensed Statement of Revenues, Expenses, and Changes in Net Position Proprietary Fund For the Fiscal Year Ended June 30, 2024
81 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT North Carolina State University NC State Investment Fund, Inc.
NC State University Partnership Corporation Total Net Cash Provided (Used) by Operating Activities (653,607,486) 894,589 (652,712,897)
Cash Provided by Noncapital Financing Activities 838,676,288 1,142,792 839,819,080 Net Cash Used by Capital Financing and Related Financing Activities (39,191,619)
(1,947,607)
(41,139,226)
Net Cash Provided (Used) by Investing Activities 20,935,369 (53,034,794)
(32,099,425)
Net Increase (Decrease) in Cash and Cash Equivalents 166,812,552 (53,034,794) 89,774 113,867,532 Cash and Cash Equivalents, July 1, 2023 566,429,756 109,220,029 3,589,841 679,239,626 Cash and Cash Equivalents, June 30, 2024 733,242,308 56,185,235 3,679,615 793,107,158 Condensed Statement of Cash Flows Proprietary Fund June 30, 2024 For the "scal year ended June 30, 2024, the University implemented the following pronouncement issued by the Govern-mental Accounting Standards Board (GASB):
GASB Statement No. 100, Accounting Changes and Error Corrections - an Amendment of GASB Statement No. 62 GASB Statement No. 100 enhances accounting and "nancial reporting requirements for accounting changes and error cor-rections, to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. It de"nes accounting changes as changes in accounting principles, changes in accounting esti-mates, and changes to or within the "nancial reporting entity, and describes the transactions or other events that constitute those changes. This Statement prescribes the accounting and "nancial reporting for each type of accounting change and error corrections and requires disclosure in the notes to the "nancial statements of descriptive information about account-ing changes and error corrections, such as their nature. Furthermore, this Statement addresses how information that is affected by a change in accounting principle or error correction should be presented in required supplementary information and supplementary information.
Note 20 - Changes in Financial Accounting and Reporting Note 21 - Net Position Restatement GASB Implementation Guide 2021-1, Section 5.1 was effective for the "scal year ended June 30, 2024. This pronounce-ment clari"es that a government should capitalize assets whose individual costs are less than the capitalization threshold for an individual asset if those assets are signi"cant. Implementation guides are authoritative Category B guidance under the hierarchy of GAAP for state and local governments.
As of July 1, 2023, net position as previously reported was restated as follows:
Amount July 1, 2023 Net Position as Previously Reported 1,561,478,071 Change in Accounting Principle:
Recorded the Universitys Grouped Asset Pursuant to GASB Implementation Guide 2021-1, Section 5.1 Grouped Assets 20,304,719 July 1, 2023 Net Position as Restated 1,581,782,790
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 82 Note 22 - Discretely Presented Component Units The Universitys discretely presented component units use the accounting and reporting standards promulgated by FASB.
Selected disclosures from the discretely presented component units audited "nancial statements follow:
NORTH CAROLINA STATE UNIVERSITY FOUNDATION, INC.
Long-Term Investments The Foundation invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of "nancial position.
Long-Term Investments at June 30, 2024 consisted of:
Cost Fair Value STIF 26,536 $
26,536 NC State Investment Fund, Inc.
Long Term Investment Pool (LTIP) 267,030,609 565,959,252 SRI Fund 53,496,700 68,439,715 Life Income Funds 4,546,314 4,892,892 Total 325,100,159 $ 639,318,395 Life Income Funds The consolidated "nancial statements include assets and liabilities of charitable gift annuities and unitrust agreements for which the Foundation is the trustee. The grantors and/or bene"ciaries retain future income interests in these assets until their death. These life income funds are recorded at fair value at the date of gift. Life income funds at June 30, 2024 have fair value asset balances of $4,892,892.
The liabilities for distributions to grantors and/or bene"ciaries are computed using Internal Revenue Code annuity valuation tables, the distribution terms of the agreements, and the life expectancy of the bene"ciaries, and totaled $4,084,742 at June 30, 2024. Payments from these funds were $615,769 during the year ended June 30, 2024. An unrestricted reserve account has been established in the Foundations Charitable Gift Annuity (CGA) pool to receive 10% from all new CGAs established in order to offset the liabilities for any annuities that reach exhaustion. The goal is to build the unrestricted reserve fund to equal 10% of the total value of the Foundations CGA pool. As of June 30, 2024 the CGA reserve balance was $38,222.
In addition to the above life income funds, the Foundation was named the recipient of an externally managed trust which represents irrevocable life income funds with a market value of $5,988,622 as of June 30, 2024. The related life income fund payable was $4,230,724 as of June 30, 2024. The Foundation is serving as trustee for these funds.
83 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Receivable in Less than One Year 9,945,705 Receivable in One to Five Years 18,015,187 Receivable in Greater Than Five Years 1,929,396 Total Gross Pledges Receivable 29,890,288 Less Allowance for Uncollectible Pledges (1,495,000)
Less Unamortized Discount (Discount Rate of 3.85% to 5.24%)
(3,193,710)
Net Pledges Receivable 25,201,578 An allowance for doubtful accounts has been established and is updated annually to re"ect 5% of the Foundations outstanding pledge balance, excluding large pledges for which signed memorandums of understanding exist and therefore the Foundation is reasonably assured of collecting. Three donors represented approximately $11.1 million of total undiscounted pledges receivable at June 30, 2024. Active past due and long-term pledges receivable are reviewed twice yearly by the Advancement Services of"ce in order to determine if it is appropriate to allow for or write off such pledges.
THE NORTH CAROLINA AGRICULTURAL FOUNDATION, INC.
Long-Term Investments The Foundation invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of "nancial position.
Long-Term Investments at June 30, 2024 consisted of:
Pledges Receivable Pledges receivable consisted of the following at June 30, 2024:
Cost Fair Value STIF 69,540 $
69,540 NC State Investment Fund, Inc.
Long Term Investment Pool (LTIP) 70,863,962 164,199,392 Life Income Funds 7,233,549 7,683,213 Total 78,167,051 $ 171,952,145 Life Income Funds The "nancial statements include assets and liabilities of charitable gift annuities and unitrust agreements for which the Foundation is the trustee. The grantors and/or bene"ciaries retain future income interests in these assets until their death.
These life income funds are recorded at fair value at the date of gift and marked to market thereafter. Life income funds at June 30, 2024 have fair value asset balances of $7,683,213.
The liabilities for distributions to the grantors and/or bene"ciaries are computed using Internal Revenue Code annuity valuation tables, the distribution terms of the agreements, and the life expectancies of the bene"ciaries, and totaled
$4,324,830 at June 30, 2024. Payments from these funds were $444,456 during the year ended June 30, 2024. An unrestricted reserve account has been established in the Foundations Charitable Gift Annuity (CGA) pool to receive 10% from all new CGAs established to offset the liabilities for any annuities that reach exhaustion. The goal is to build the unrestricted reserve fund to equal 10% of the total value of the Foundations CGA pool. As of June 30, 2024, the CGA reserve balance was $120,943.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 84 Receivable in Less than One Year 3,055,928 Receivable in One to Five Years 2,544,206 Receivable in Greater Than Five Years Total Gross Pledges Receivable 5,600,134 Less Allowance for Uncollectible Pledges (281,000)
Less Unamortized Discount (Discount Rate of 3.95%
to 5.24%)
(419,565)
Net Pledges Receivable 4,899,569 An allowance for doubtful accounts has been established and is updated annually to re"ect 5% of the Foundations outstanding pledge balance, along with any speci"c pledges for which collectability is uncertain. Two donors represented approximately $1.7 million of total undiscounted pledges receivable at June 30, 2024. Active past due and long-term pledges receivable are reviewed twice yearly by the Advancement Services of"ce in order to determine if it is appropriate to allow for or write off such pledges.
Pledges Receivable Pledges receivable consisted of the following at June 30, 2024:
85 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY 2024 ANNUAL FINANCIAL REPORT REQUIRED SUPPLEMENTARY INFORMATION
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 86 NORTH CAROLINA STATE UNIVERSITY Exhibit D-2 Required Supplementary Information Schedule of University Contributions Cost-Sharing, Multiple-Employer, De"ned Bene"t Pension Plan Last Ten Fiscal Years Teachers and State Employees Retirement System 2024 2023 2022 2021 2020 Contractually Required Contribution 73,616,323 67,210,215 57,869,845 50,978,750 45,868,923 Contributions in Relation to the Contractually Determined Contribution 73,616,323 67,210,215 57,869,845 50,978,750 45,868,923 Contribution De"ciency (Excess)
Covered Payroll 417,326,093 386,710,098 353,295,759 344,917,119 353,653,996 Contributions as a Percentage of Covered Payroll 17.64%
17.38%
16.38%
14.78%
12.97%
2019 2018 2017 2016 2015 Contractually Required Contribution 42,614,693 35,745,937 32,398,529 28,562,190 28,231,407 Contributions in Relation to the Contractually Determined Contribution 42,614,693 35,745,937 32,398,529 28,562,190 28,231,407 Contribution De"ciency (Excess)
Covered Payroll 346,742,820 331,594,965 324,634,557 312,155,082 308,539,969 Contributions as a Percentage of Covered Payroll 12.29%
10.78%
9.98%
9.15%
9.15%
Note: Changes in bene"t terms, methods, and assumptions are presented in the Notes to Required Supplementary Information (RSI) schedule following the pension RSI tables.
NORTH CAROLINA STATE UNIVERSITY Exhibit D-1 Required Supplementary Information Schedule of the Proportionate Share of the Net Pension Liability Cost-Sharing, Multiple-Employer, De"ned Bene"t Pension Plan Last Ten Fiscal Years*
Teachers and State Employees Retirement System 2024 2023 2022 2021 2020 Proportionate Share Percentage of Collective Net Pension Liability 2.19954%
2.08912%
2.20005%
2.26827%
2.26106%
Proportionate Share of TSERS Collective Net Pension Liability 366,706,935 310,072,163 103,019,563 274,052,313 234,403,118 Covered Payroll 386,710,098 353,295,759 344,917,119 353,653,996 346,742,820 Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 94.83%
87.77%
29.87%
77.49%
67.60%
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 82.97%
84.14%
94.86%
85.98%
87.56%
Note: Information is presented for all years that were measured in accordance with the requirements of GASB Statement No.68, Accounting and Financial Reporting for Pensions - An Amendment of GASB Statement No. 27, as amended.
- The amounts presented for each "scal year were determined as of the prior "scal year ending June 30.
2019 2018 2017 2016 2015 Proportionate Share Percentage of Collective Net Pension Liability 2.22637%
2.22596%
2.20202%
2.13940%
2.14599%
Proportionate Share of TSERS Collective Net Pension Liability 221,659,379 176,617,483 202,388,385 78,841,126 25,160,037 Covered Payroll 331,594,965 324,634,557 312,155,082 308,539,969 305,353,765 Proportionate Share of the Net Pension Liability as a Percentage of Covered Payroll 66.85%
54.41%
64.84%
25.55%
8.24%
Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 87.61%
89.51%
87.32%
94.64%
98.24%
87 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY Notes to Required Supplementary Information Schedule of University Contributions Cost-Sharing, Multiple-Employer, De"ned Bene"t Pension Plan For the Fiscal Year Ended June 30, 2024 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 N/A N/A N/A N/A N/A 1.00%
N/A N/A N/A 1.00%
Changes of Bene"t Terms:
Beginning in "scal year 2015, with the implementation of GASB Statement No. 68, the above table re"ects Cost of Living Adjustments (COLA) in the period of the legislative session or Board of Trustees meeting when it was passed. The COLA is effective as of July 1 of that period and the "scal year end plan liability is affected at June 30 of that year because the COLA is included in the actuarial assumptions used to calculate the plan net pension liability.
Effective July 1, 2017, the de"nition of law enforcement of"cer related to TSERS members was changed by the General Assem-bly to include Probation/Parole of"cers for retirement bene"t purposes. The change includes of"cers with respect to service rendered on or after July 1, 2017, and provides for unreduced retirement at age 55 with "ve years of service as a law enforce-ment of"cer or reduced retirement at age 50 with 15 years of service as a law enforcement of"cer.
Effective July 1, 2017, retirees and bene"ciaries of deceased retirees receiving bene"ts from the TSERS as of July 1, 2016, received a 1% cost-of-living adjustment. Retirees and bene"ciaries of retirees with retirement effective dates between July 1, 2016 and before June 30, 2017 received a prorated amount. These bene"t enhancements re"ect legislation enacted by the North Carolina General Assembly.
In December 2021 for the "scal year ended June 30, 2022, retirees and bene"ciaries of deceased retirees receiving bene"ts from the TSERS as of September 1, 2021, received a one-time cost-of-living supplement payment, equal to 2% of the bene"-
ciarys annual retirement allowance.
Bene"t recipients of the TSERS received a one-time bene"t supplement payment equal to 4% of the members annual bene"t amount, paid in October 2022, as granted by the North Carolina General Assembly for the "scal year ended June 30, 2023. The one-time supplement does not change the ongoing monthly bene"ts, and absent additional action by governing authorities, the payments will not recur in future years.
Bene"t recipients of the TSERS will receive a one-time bene"t supplement payment equal to 4% of the members annual bene"t amount, paid in November 2023, as granted by the North Carolina General Assembly for the "scal year ended June 30, 2024. The one-time supplement does not change the ongoing monthly bene"ts, and absent additional action by governing authorities, the payments will not recur in future years.
Methods and Assumptions Used in Calculations of Actuarially Determined Contributions: An actuarial valuation is performed for each year for the plan. The actuarially determined contribution rates in the Schedule of University Contributions are calcu-lated by the actuary as a projection of the required employer contribution for the "scal year beginning 18 months following the date of the valuation results. See Note 14 for more information on the speci"c assumptions for the plan. The actuarially determined contributions for those items with covered payroll were determined using the actuarially determined contribution rate from the actuary and covered payroll as adjusted for timing differences and other factors such as differences in employee class. Other actuarially determined contributions are disclosed in the schedule as expressed by the actuary in reports to the plans.
Changes of Assumptions: In January 2021, the actuarial assumptions for the TSERS were updated to more closely re"ect actual experience.
In 2020, the North Carolina Retirement Systems consulting actuaries performed the quinquennial investigation of the TSERS actual demographic and economic experience (known as the Experience Review). The Experience Review provides the basis for selecting the actuarial assumptions and methods used to determine plan liabilities and funding requirements. The most recent experience review examined the TSERS experience during the period between January 1, 2015, and December 31, 2019.
Based on the "ndings, the Boards of Trustees of the TSERS adopted a number of new actuarial assumptions and methods. The most notable changes to the assumptions include updates to the mortality tables and mortality improvements. These assump-tions were adjusted to be based on the Pub-2010 mortality tables re"ecting the mortality projection scale MP-2019, released by the Society of Actuaries in 2019. In addition, the assumed rates of retirement, salary increases, and rates of termination from active employment were updated to more closely re"ect actual experience.
The discount rate for the TSERS was lowered from 7.00% to 6.50% effective for the December 31, 2020 valuation, with the re-sulting effect on minimum actuarially determined employer contribution rates (or amounts) to be gradually recognized over a "ve-year period beginning July 1, 2022.
The Notes to Required Supplementary Information re"ect information included in the State of North Carolinas 2023 Annual Comprehensive Financial Report.
N/A - Not Applicable Cost of Living Increase Teachers and State Employees Retire-ment System
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 88 NORTH CAROLINA STATE UNIVERSITY Exhibit D-3 Required Supplementary Information Page 1 of 2 Schedule of the Proportionate Share of the Net OPEB Liability or Asset Cost-Sharing, Multiple-Employer, De"ned Bene"t OPEB Plans Last Eight Fiscal Years*
2024 2023 2022 2021 2020 Retiree Health Bene"t Fund Proportionate Share Percentage of Collective Net OPEB Liability 3.81303%
3.72503%
3.82676%
3.90378%
3.88356%
Proportionate Share of Collective Net OPEB Liability 1,016,074,701 884,577,552 1,183,066,098 1,082,941,007 1,228,738,701 Covered Payroll 756,695,522 699,372,467 674,891,261 685,244,979 668,939,140 Proportionate Share of Net OPEB Liability as a Percentage of Covered Payroll 134.28%
126.48%
175.30%
158.04%
183.68%
Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 10.73%
10.58%
7.72%
6.92%
4.40%
2019 2018 2017 Proportionate Share Percentage of Collective Net OPEB Liability 3.83759%
3.54230%
3.97671%
Proportionate Share of Collective Net OPEB Liability 1,093,258,395 1,161,399,772 1,730,004,018 Covered Payroll 640,522,115 622,217,834 593,161,610 Proportionate Share of Net OPEB Liability as a Percentage of Covered Payroll 170.68%
186.65%
291.66%
Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 4.40%
3.52%
2.41%
89 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Note: Information is presented for all years that were measured in accordance with the requirements of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Bene"ts Other Than Pensions, as amended.
- The amounts presented for each "scal year were determined as of the prior "scal year ended June 30.
2024 2023 2022 2021 2020 Disability Income Plan of North Carolina Proportionate Share Percentage of Collective Net OPEB Liability (Asset) 3.87899%
3.68467%
3.74971%
3.95654%
3.92068%
Proportionate Share of Collective Net OPEB Liability (Asset) 1,031,656 1,096,116 (612,478)
(1,946,380)
(1,691,773)
Covered Payroll 756,695,522 699,372,467 674,891,261 685,244,979 668,939,140 Proportionate Share of Net OPEB Liability (Asset) as a Percentage of Covered Payroll 0.14%
0.16%
0.09%
0.28%
0.25%
Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability (Asset) 90.61%
90.34%
105.18%
115.57%
113.00%
2019 2018 2017 Proportionate Share Percentage of Collective Net OPEB Liability (Asset) 3.89123%
3.85175%
3.71822%
Proportionate Share of Collective Net OPEB Liability (Asset)
(1,182,000)
(2,354,190)
(2,309,387)
Covered Payroll 640,522,115 622,217,834 593,161,610 Proportionate Share of Net OPEB Liability (Asset) as a Percentage of Covered Payroll 0.18%
0.38%
0.39%
Plan Fiduciary Net Position as a Percentage of the Total OPEB Liability 108.47%
116.23%
116.06%
NORTH CAROLINA STATE UNIVERSITY Exhibit D-3 Required Supplementary Information Page 2 of 2 Schedule of the Proportionate Share of the Net OPEB Liability or Asset Cost-Sharing, Multiple-Employer, De"ned Bene"t OPEB Plans Last Eight Fiscal Years*
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 90 NORTH CAROLINA STATE UNIVERSITY Exhibit D-4 Required Supplementary Information Page 1 of 2 Schedule of University Contributions Cost-Sharing, Multiple-Employer, De"ned Bene"t OPEB Plans Last Ten Fiscal Years 2024 2023 2022 2021 2020 Retiree Health Bene"t Fund Contractually Required Contribution 58,728,350 52,136,321 43,990,528 45,082,736 44,335,350 Contributions in Relation to the Contractually Determined Contribution 58,728,350 52,136,321 43,990,528 45,082,736 44,335,350 Contribution De"ciency (Excess)
Covered Payroll 822,525,909 756,695,522 699,372,467 674,891,261 685,244,979 Contributions as a Percentage of Covered Payroll 7.14%
6.89%
6.29%
6.68%
6.47%
2019 2018 2017 2016 2015 Contractually Required Contribution 41,942,484 38,751,588 36,150,856 33,217,050 31,585,734 Contributions in Relation to the Contractually Determined Contribution 41,942,484 38,751,588 36,150,856 33,217,050 31,585,734 Contribution De"ciency (Excess)
Covered Payroll 668,939,140 640,522,115 622,217,834 593,161,610 575,332,134 Contributions as a Percentage of Covered Payroll 6.27%
6.05%
5.81%
5.60%
5.49%
91 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 2024 2023 2022 2021 2020 Disability Income Plan of North Carolina Contractually Required Contribution 904,779 756,696 629,435 607,402 685,245 Contributions in Relation to the Contractually Determined Contribution 904,779 756,696 629,435 607,402 685,245 Contribution De"ciency (Excess)
Covered Payroll 822,525,909 756,695,522 699,372,467 674,891,261 685,244,979 Contributions as a Percentage of Covered Payroll 0.11%
0.10%
0.09%
0.09%
0.10%
2019 2018 2017 2016 2015 Contractually Required Contribution 936,515 896,731 2,364,428 2,431,963 2,358,862 Contributions in Relation to the Contractually Determined Contribution 936,515 896,731 2,364,428 2,431,963 2,358,862 Contribution De"ciency (Excess)
Covered Payroll 668,939,140 640,522,115 622,217,834 593,161,610 575,332,134 Contributions as a Percentage of Covered Payroll 0.14%
0.14%
0.38%
0.41%
0.41%
Note: Changes in bene"t terms, methods and assumptions are presented in the Notes to Required Supplementary Information (RSI) schedule following the OPEB RSI tables.
NORTH CAROLINA STATE UNIVERSITY Exhibit D-4 Required Supplementary Information Page 2 of 2 Schedule of University Contributions Cost-Sharing, Multiple-Employer, De"ned Bene"t OPEB Plans Last Ten Fiscal Years
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 92 NORTH CAROLINA STATE UNIVERSITY Notes to Required Supplementary Information Schedule of University Contributions Cost-Sharing, Multiple-Employer, De"ned Bene"t OPEB Plans For Fiscal Year Ended June 30, 2024 Changes of Bene"t Terms: Effective January 1, 2016, bene"t terms related to copays, out-of-pocket maximums, and deductibles were changed for three of "ve options of the Retiree Health Bene"t Fund (RHBF). Most of the changes were an increase in the amount from the previous year.
Effective January 1, 2017, bene"t terms related to copays, coinsurance maximums, out-of-pocket maximums, and deductibles were changed for two of "ve options of the RHBF. Most of the changes were an increase in the amount from the previous year.
Effective January 1, 2019, bene"t terms related to copays, out-of-pocket maximums, and deductibles were changed for one of four options of the RHBF. Out-of-pocket maximums increased while certain specialist copays decreased related to option ben-e"ts.
Effective January 1, 2020, bene"t terms related to copays, out-of-pocket maximums, and deductibles were changed for the 70/30 PPO option of the RHBF. Only the copays were adjusted for 80/20 PPO option of the RHBF.
Effective January 1, 2021, members "rst hired on and after January 1, 2021 will not be eligible to receive retiree medical ben-e"ts.
Effective January 1, 2022, the structure of employer contributions to the RHBF was altered by legislation. Previously, non-Medicare-eligible retirees had the same employer contribution rate as active employees. As a result of the legislative change, non-Medicare-eligible retirees have the same employer contribution rate as Medicare-eligible retirees.
Beginning with the Disability Income Plan of North Carolina (DIPNC) actuarial valuation as of December 31, 2017, the valuation included a liability for the States potential reimbursement of costs incurred by employers for income bene"ts and health insur-ance premiums during the second six months of the "rst year of employees short-term disability bene"t period. Effective with the actuarial valuation as of December 31, 2021, this liability was removed from the actuarial valuation because the reimburse-ment from DIPNC was eliminated for disabilities occurring on or after July 1, 2019.
Method and Assumptions Used in Calculations of Actuarially Determined Contributions: An actuarial valuation is performed for each plan each year. The actuarially determined contribution rates in the Schedule of University Contributions are calculated by the actuary as a projection of the required employer contribution for the "scal year beginning six months preceding the date of the valuation results for the RHBF. The actuarially determined contribution rates in the Schedule of University Contributions are calculated by the actuary as a projection of the required employer contribution for the "scal year beginning 18 months follow-ing the date of the valuation results for the DIPNC. See Note 15 for more information on the speci"c assumptions for each plan.
The actuarially determined contributions were determined using the actuarially determined contribution rate from the actuary and covered payroll as adjusted for timing differences and other factors such as differences in employee class. Other actuari-ally determined contributions are disclosed in the schedule as expressed by the actuary in reports to the plans.
Changes of Assumptions: Consistent with prior years, for the actuarial valuation measured as of June 30, 2023 for the RHBF, a number of actuarial assumptions were reviewed and updated. The discount rate for the RHBF was updated to 3.65%, from 3.54% as of June 30, 2022. This update was to re"ect the Bond Buyer 20-year General Obligation Index as of "scal year end.
Medical and prescription drug claims costs were changed based on most recent experience, and medical and prescription drug trend rates were changed to the current schedule. Enrollment assumptions were updated to model expected migrations among RHBF plan options over the next "ve years. The expected impact from the In"ation Reduction Act on assumed Medicare Advan-tage rates was included. The terms of the Pharmacy Bene"ts Management contract effective January 1, 2023 and the terms of the third party administrator contract effective January 1, 2025 were incorporated in the valuation.
For the actuarial valuation measured as of June 30, 2023 for DIPNC, the discount rate was updated to 3.00%, from 3.08% as of June 30, 2022. This was a result of an update to re"ect the Bond Buyer 20-year General Obligation Index as of "scal year end, combined with a change in the degree to which the plans "duciary net position was projected to be available to make all pro-jected future bene"t payments to the current plan members.
In 2020, the North Carolina Retirement Systems consulting actuaries performed the quinquennial investigation of each retire-ment systems actual demographic and economic experience (known as the Experience Review). The Experience Review provides the basis for selecting the actuarial assumptions and methods used to determine plan liabilities and funding require-ments. The most recent experience review examined each plans experience during the period between January 1, 2015, and December 31, 2019. Based on the "ndings, the Boards of Trustees of the TSERS and the Committee on Actuarial Valuation of Retired Employees Health Bene"ts adopted a number of new actuarial assumptions and methods for the RHBF and the DIPNC.
The most notable changes to the assumptions include updates to the mortality tables and mortality improvements. These assumptions were adjusted to be based on the Pub-2010 mortality tables re"ecting the mortality projection scale MP-2019, re-leased by the Society of Actuaries in 2019. In addition, the assumed rates of retirement, salary increases, and rates of termina-tion from active employment were updated to more closely re"ect actual experience. Also in 2020, disability rates were adjust-ed to the non-grandfathered assumptions used in the TSERS actuarial valuation to better align with the anticipated incidence of disability.
For the DIPNC actuarial valuation as of December 31, 2018, for individuals who may become disabled in the future, the Social Security disability income bene"t (which is an offset to the DIPNC bene"t) was updated to be based on assumed Social Secu-rity calculation parameters in the year of the disability. The assumed costs related to the Patient Protection and Affordable Care Act regarding the Health Insurance Provider Fee for the fully insured plans and Excise Tax were removed when those pieces were repealed in December 2019 and "rst recognized in the 2020 OPEB report.
The Notes to Required Supplementary Information re"ect information included in the State of North Carolinas 2023 Annual Comprehensive Financial Report.
93 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT NORTH CAROLINA STATE UNIVERSITY 2024 ANNUAL FINANCIAL REPORT SUPPLEMENTARY INFORMATION SECTION
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 94 94 Ratio of Net Gain in Endowment Investments Ten Year History For the Year Ended June 30, (in thousands)
University Endowment Investments - Market Value Fiscal Year End of Year Beginning of Year Yearly Change Ratio 2014-2015 230,099 205,010 25,089 12.24 2015-2016 209,047 230,099 (21,052)
(9.15) 2016-2017 311,538 209,047 102,491 49.03 2017-2018 349,411 311,538 37,873 12.16 2018-2019 372,836 349,411 23,425 6.70 2019-2020 379,562 372,836 6,726 1.80 2020-2021 522,702 379,562 143,140 37.71 2021-2022 531,981 522,702 9,279 1.78 2022-2023 526,942 531,981 (5,039)
(0.95) 2023-2024 586,592 526,942 59,650 11.32
95 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Available Funds For the Year Ended June 30, (in thousands) 2020 2021 2022 2023 2024 Total Unrestricted Revenue 1,320,025 $
1,189,261 $
1,395,981 $
1,506,642 $
1,661,180 Less:
State Appropriations (522,902)
(550,557)
(578,016)
(616,311)
(658,859)
Tuition and Fees (305,411)
(284,936)
(295,763)
(307,281)
(319,141)
Plus:
Beginning Unrestricted Net Position (1,379,966)
(1,352,030)
(1,252,576)
(1,067,517)
(837,986)
Total (888,254)
(968,262)
(730,374)
(484,467)
(154,806)
Adjustments for Pension and OPEB GASB 68 Pension 136,018 166,579 135,072 128,684 148,073 GASB 75 OPEB 1,542,143 1,443,634 1,341,809 1,167,338 1,108,086 Total Adjusted Available Funds 789,907 641,951 746,507 811,555 1,101,353 More information on the effect of both Pension and OPEB on unrestricted net position is available in Note 11 - Net Position.
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 96 Admissions, Enrollment and Degree Statistics Ten Year History of Fall Enrollment (Headcount)
Freshman Admissions 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Applied 20,208 21,102 26,224 26,835 30,177 30,970 31,352 32,885 35,401 39,820 Accepted 10,390 10,582 12,353 13,690 14,059 13,902 14,419 15,535 16,650 15,749 Enrolled 4,374 4,212 4,229 4,656 4,844 4,771 4,665 4,979 5,540 5,565 SAT Total 1,248 1,250 1,263 1,309 1,319 1,337 1,320 1,352 1,329 1,369 SAT Verbal 607 610 617 647 649 658 651 665 654 675 SAT Math 641 640 646 662 670 679 669 687 674 694 Transfer Admissions Applied 3,635 4,166 4,184 4,381 4,671 4,249 4,044 4,139 4,461 4,746 Accepted 1,647 1,472 1,712 1,831 1,938 1,820 2,037 1,913 1,831 2,125 Enrolled 1,253 1,107 1,223 1,275 1,343 1,307 1,445 1,386 1,270 1,485 Graduate Admissions Applied 15,419 15,394 16,650 15,746 15,075 15,382 14,952 15,244 15,996 14,891 Accepted 3,612 3,583 3,429 3,791 3,653 4,286 3,917 4,190 3,967 3,949 Enrolled 2,839 2,892 2,802 3,147 3,029 3,133 2,517 3,293 2,838 3,148 (Percentage of Total Applications)
Freshman Admissions 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Accepted 51.4%
50.1%
47.1%
51.0%
46.6%
44.9%
46.0%
47.2%
47.0%
39.6%
Enrolled 21.6%
20.0%
16.1%
17.4%
16.1%
15.4%
14.9%
15.1%
15.6%
14.0%
Transfer Admissions Accepted 45.3%
35.3%
40.9%
41.8%
41.5%
42.8%
50.4%
46.2%
41.0%
44.8%
Enrolled 34.5%
26.6%
29.2%
29.1%
28.8%
30.8%
35.7%
33.5%
28.5%
31.3%
Graduate Admissions Accepted 23.4%
23.3%
20.6%
24.1%
24.2%
27.9%
26.2%
27.5%
24.8%
26.5%
Enrolled 18.4%
18.8%
16.8%
20.0%
20.1%
20.4%
16.8%
21.6%
17.7%
21.1%
(Degrees Conferred) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Undergraduate Certi"cate 77 67 91 73 101 95 106 160 94 82 Bachelors 5,549 5,586 5,652 5,671 5,796 5,932 5,991 6,388 6,539 6,205 Graduate Certi"cate 201 194 202 285 311 355 452 444 518 487 Masters 2,449 2,377 2,538 2,638 2,711 2,785 2,781 2,862 2,346 2,997 Doctoral 494 512 519 540 533 571 568 536 576 553 Total 8,770 8,736 9,002 9,207 9,452 9,738 9,898 10,390 10,073 10,324
97 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Admissions, Enrollment and Degree Statistics Ten Year History of Fall Enrollment (Headcount) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Undergraduate 22,925 22,462 22,346 22,755 23,658 24,239 24,671 24,999 25,109 26,389 Graduate 8,860 9,265 9,342 9,744 9,811 10,331 9,892 10,326 10,446 10,000 Non-Degree Studies 2,204 2,288 2,055 1,916 1,994 1,734 1,479 1,506 1,145 934 Full-time 26,965 26,767 26,776 27,415 28,368 28,791 28,314 29,099 29,837 30,660 Part-time 7,024 7,248 6,979 7,017 7,111 7,513 7,728 7,732 6,863 6,663 Male 18,945 18,769 18,561 18,691 18,917 19,014 18,481 18,623 18,643 18,849 Female 15,044 15,246 15,194 15,741 16,562 17,290 17,561 18,208 18,057 18,474 American Indian or Alaska Native 128 106 117 124 128 138 135 140 123 129 Asian 1,679 1,628 1,762 1,924 2,282 2,432 2,596 2,763 2,983 3,168 Black or African American 2,212 2,164 2,075 2,038 2,055 2,258 2,354 2,399 2,303 2,294 Hispanic or Latino 1,392 1,488 1,469 1,597 1,761 2,011 2,121 2,398 2,570 2,850 Native Hawaiian or Paci"c Islander 27 27 23 19 19 19 28 24 24 22 Two or More Races 961 1,035 1,043 1,078 1,145 1,188 1,349 1,381 1,465 1,567 U.S. Nonresident 3,709 4,162 4,154 4,328 4,068 4,163 3,271 3,487 3,969 3,787 Unknown 957 812 944 1,637 2,112 1,689 1,222 957 776 657 White 22,924 22,593 22,168 21,687 21,909 22,406 22,966 23,282 22,487 22,849 In-state 26,699 26,440 26,277 26,931 28,153 28,947 29,446 29,904 29,118 29,966 Out-of-state 3,823 3,733 3,605 3,472 3,277 3,260 3,456 3,417 3,522 3,799 International 3,467 3,842 3,873 4,029 4,049 4,097 3,140 3,510 4,060 3,558 Total Enrollment 33,989 34,015 33,755 34,432 35,479 36,304 36,042 36,831 36,700 37,323 (Percentage of Total)
Undergraduate 67.4%
66.0%
66.2%
66.1%
66.7%
66.8%
68.5%
67.9%
68.4%
70.7%
Graduate 26.1%
27.3%
27.7%
28.3%
27.7%
28.4%
27.4%
28.0%
28.5%
26.8%
Non-Degree Studies 6.5%
6.7%
6.1%
5.6%
5.6%
4.8%
4.1%
4.1%
3.1%
2.5%
Full-time 79.3%
78.7%
79.3%
79.6%
80.0%
79.3%
78.6%
79.0%
81.3%
82.1%
Part-time 20.7%
21.3%
20.7%
20.4%
20.0%
20.7%
21.4%
21.0%
18.7%
17.9%
Male 55.7%
55.2%
55.0%
54.3%
53.3%
52.4%
51.3%
50.6%
50.8%
50.5%
Female 44.3%
44.8%
45.0%
45.7%
46.7%
47.6%
48.7%
49.4%
49.2%
49.5%
American Indian or Alaska Native 0.4%
0.3%
0.3%
0.4%
0.4%
0.4%
0.4%
0.4%
0.3%
0.4%
Asian 4.9%
4.8%
5.2%
5.6%
6.4%
6.7%
7.2%
7.5%
8.1%
8.5%
Black or African American 6.5%
6.4%
6.1%
5.9%
5.8%
6.2%
6.5%
6.5%
6.3%
6.1%
Hispanic or Latino 4.1%
4.4%
4.4%
4.6%
5.0%
5.5%
5.9%
6.5%
7.0%
7.6%
Native Hawaiian or Paci"c Islander 0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
0.1%
Two or More Races 2.8%
3.0%
3.1%
3.1%
3.2%
3.3%
3.7%
3.7%
4.0%
4.2%
U.S. Nonresident 10.9%
12.2%
12.3%
12.6%
11.4%
11.5%
9.1%
9.5%
10.8%
10.1%
Unknown 2.8%
2.4%
2.8%
4.7%
5.9%
4.6%
3.4%
2.6%
2.1%
1.8%
White 67.5%
66.4%
65.7%
63.0%
61.8%
61.7%
63.7%
63.2%
61.3%
61.2%
In-state 78.6%
77.7%
77.8%
78.2%
79.4%
79.7%
81.7%
81.2%
79.3%
80.3%
Out-of-state 11.2%
11.0%
10.7%
10.1%
9.2%
9.0%
9.6%
9.3%
9.6%
10.2%
International 10.2%
11.3%
11.5%
11.7%
11.4%
11.3%
8.7%
9.5%
11.1%
9.5%
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 98 Admissions, Enrollment and Degree Statistics Enrollment by County Student Enrollment, Fall Semester 2023 Residence Total Residence Total Residence Total Residence Total Alamance 378 Cumberland 474 Johnston 851 Randolph 229 Alexander 32 Currituck 41 Jones 6
Richmond 49 Alleghany 15 Dare 109 Lee 158 Robeson 101 Anson 19 Davidson 309 Lenoir 86 Rockingham 113 Ashe 39 Davie 101 Lincoln 175 Rowan 143 Avery 23 Duplin 71 McDowell 31 Rutherford 79 Beaufort 85 Durham 1,029 Macon 51 Sampson 103 Bertie 30 Edgecombe 61 Madison 25 Scotland 36 Bladen 52 Forsyth 779 Martin 14 Stanly 67 Brunswick 211 Franklin 196 Mecklenburg 2,273 Stokes 59 Buncombe 477 Gaston 351 Mitchell 12 Surry 117 Burke 121 Gates 16 Montgomery 32 Swain 10 Cabarrus 550 Graham 6
Moore 292 Transylvania 40 Caldwell 85 Granville 148 Nash 219 Tyrrell 3
Camden 29 Greene 21 New Hanover 673 Union 913 Carteret 201 Guilford 1,380 Northhampton 16 Vance 65 Caswell 33 Halifax 84 Onslow 232 Wake 10,185 Catawba 289 Harnett 235 Orange 705 Warren 18 Chatham 351 Haywood 65 Pamlico 21 Washington 9
Cherokee 16 Henderson 146 Pasquotank 35 Watauga 85 Chowan 26 Hertford 28 Pender 176 Wayne 198 Clay 6
Hoke 39 Perquimans 12 Wilkes 53 Cleveland 139 Hyde 6
Person 62 Wilson 161 Columbus 94 Iredell 462 Pitt 313 Yadkin 43 Craven 230 Jackson 43 Polk 30 Yancey 17 Total 29,127
99 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Admissions, Enrollment and Degree Statistics Five Year Comparison of Enrollment by Level and College Student Enrollment, Fall Semester 2019 2020 2021 2022 2023 Undergraduate Agriculture and Life Sciences 2,660 2,689 2,637 2,577 2,655 Agriculture Institute 319 268 229 211 236 Design 596 580 614 626 678 Education 560 584 618 614 631 Engineering 6,479 6,691 6,925 7,154 7,665 Humanities and Social Sciences 3,701 3,776 3,773 3,626 3,872 Management 3,270 3,435 3,557 3,509 3,547 Natural Resources 1,503 1,587 1,565 1,536 1,623 Sciences 3,026 3,080 3,100 3,127 3,168 Textiles 797 790 763 759 783 Non Degree Studies 1,735 1,479 1,506 1,146 934 Units Outside Organized College 1,327 1,191 1,218 1,369 1,531 Total Undergraduate 25,973 26,150 26,505 26,254 27,323 Total FTE Undergraduate 24,123 24,359 24,786 24,971 25,646 2019 2020 2021 2022 2023 Graduate Agriculture and Life Sciences 1,003 995 1,047 1,006 935 Design 270 281 310 302 283 Education 1,254 1,299 1,339 1,193 1,078 Engineering 3,254 2,751 3,093 3,588 3,446 Humanities and Social Sciences 847 898 908 867 811 Management 891 916 946 906 862 Natural Resources 502 497 537 495 455 Sciences 1,065 1,010 1,013 1,002 1,006 Textiles 227 220 237 215 203 Veterinary Medicine 475 486 487 477 497 Non Degree Studies 409 403 289 303 315 Units Outside Organized College 134 136 120 92 109 Total Graduate 10,331 9,892 10,326 10,446 10,000 Total FTE Graduate 8,402 7,918 8,258 8,476 8,095 Total Headcount 36,304 36,042 36,831 36,700 37,323 Total FTE Enrollment 32,525 32,277 33,044 33,447 33,741 Percentage of Students (FTE) from Outside State 20.0%
17.9%
18.3%
20.1%
19.7%
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 100 Fall Enrollment Freshman Admissions by Year SAT Scores Freshman Admissions by Year 0
5,000 10,000 15,000 20,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Applied Accepted Enrolled 0
100 200 300 400 500 600 700 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 SAT Verbal SAT Math
101 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT Faculty by Rank Full Time Faculty by Tenure 0
100 200 300 400 500 600 700 800 Professor Assoc Professor Asst Professor Instructor Lecturer Not Ranked Fall 2022 Fall 2023 0
200 400 600 800 1,000 1,200 Tenured Tenure Track Other - Not on Track, Phased, and Retired Fall 2022 Fall 2023
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 102 Physical Master Plan NC STATE UNIVERSITY
103 2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT
2024 NORTH CAROLINA STATE UNIVERSITY FINANCIAL REPORT 104 ELECTRONIC AVAILABILITY: This document is available online at https://controller.ofa.ncsu.edu/"nancial-reporting/
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PRINT AVAILABILITY: 25 COPIES OF THIS PUBLIC DOCUMENT WERE PRINTED AT A COST OF $577.01 OR $23.08 PER COPY EQUAL OPPORTUNITY STATEMENT: NC State University is dedicated to equality of opportunity. The University does not condone discrimination against students, employees, or applicants in any form. NC State commits itself to positive action to secure equal opportunity regardless of race, color, creed, national origin, religion, sex, age, or disability.
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Statement of Intent (SOI) Regarding Decommissioning Funding for the PULSTAR Reactor Facility at NC State University
Office of Finance and Administration Executive Vice Chancellor ofa.ncsu.edu Campus Box 7201 Raleigh, NC 27695-7201 P: 919.515.2155 F: 919.515.5121 March 13, 2025 U.S. Nuclear Regulatory Commission Document Control Desk Washington, DC 20555
Reference:
North Carolina State University PULSTAR Reactor Docket No. 50-297, License No. R-120
Subject:
Statement of Intent (SOI) regarding Decommissioning Funding for the PULSTAR Reactor Facility at NC State University Gentlemen:
In accordance with the provisions of 10 CFR 50.75(e)(1)(iv), North Carolina State University hereby provides this Statement of Intent, stating that it is a State government organization and that decommissioning funding obligations are fully backed by the State government of North Carolina.
Decommissioning funds will be appropriated when necessary following the provisions of North Carolina General Statute 116-11 (9)(a).
The cost estimate for decommissioning the PULSTAR Reactor Facility is $17.0 million in 2025 dollars as documented in the Financial Qualifications Report dated 3/20/2025 and included in the NC State University PULSTAR License renewal application package. Per NRC requirements, adding a 25%
contingency factor yields an upper bound of $21.25 million for the decommissioning estimate.
Supporting Documentation The University of North Carolina is incorporated under North Carolina General Statute Chapter 116 Article 1 Section 3. NCGS 116-4 provides that North Carolina State University at Raleigh is a constituent institution of the University of North Carolina. NCGS 116-11 (9)(a) provides that the university Board of Governors shall develop, prepare and present to the Governor and the General Assembly a single, unified recommended budget for all of the constituent institutions of the University of North Carolina. Decommissioning funding would be requested under sub-paragraph (iii) of this section. NCGS 116-11(9)(b) states that Funds for the third category in paragraph a of this subdivision shall be appropriated to the Board in a lump sum for allocation to the institutions.
In accordance with the provisions of 10 CRF 50.75(e)(1)(iv), the signatory of this statement of intent, the Executive Vice Chancellor for Finance and Administration, is authorized to execute said document that binds North Carolina State University.
Supporting Documentation NC State University Regulation 01.20.02, Delegation of Authority to Sign Contracts, section 1.1 states that Full executive and administrative power is vested in the Chancellor by N.C.
Gen. Stat. 116-34(a) and Section 502A of The Code of the Board of Governors of the University
U.S. Nuclear Regulatory Commission Page 2 March 13, 2025 of North Carolina. Inherent within this power is the authority to sign contracts binding North Carolina State University (NC State), and to delegate and permit the further delegation of such authority not otherwise retained by the Board of Governors, the Board of Trustees or other state administrative agencies or officials. Section 3.2 of University REG 01.20.02 states that The Executive Vice Chancellor for Finance and Administration is delegated the authority to sign all contracts for which the Chancellor has signature authority that may be further sub-delegated.
Section 4.8.1.5 of REG 01.20.02 further specifies that Authority to sign contracts where the value of the agreement exceeds five hundred thousand dollars ($500,000.00) is delegated to the Executive Vice Chancelor for Finance and Administration.
If you have any questions regarding this matter, please direct them to Dr. Ayman Hawari, Director of the Nuclear Reactor Program, at (919)515-7294 or via email at ayman.hawari@ncsu.edu.
I declare under penalty of perjury that the forgoing is true and correct. Executed on 13 March 2025.
Sincerely, Charles A. Maimone Executive Vice Chancellor, Finance and Administration cc: Dr. Ayman Hawari, Director, Nuclear Reactor Program