ML15112A817

Uftr Supplemental Response to Request for Additional Information (TAC No. ME1586)

ML15112A817
Person / Time
Site:	05000083
Issue date:	03/25/2015
From:	Shea B Univ of Florida
To:	Document Control Desk, Office of Nuclear Reactor Regulation
References
TAC ME1586
Download: ML15112A817 (66)

Text

UFUNIVERSITY9f.College of Engineering PO Box 116134UF Training Reactor Facility Gainesville, FL 32611352-294-2104bshea@ufl.eduMarch 25, 2015U.S. Nuclear Regulatory Commission 10 CFR 50.4, Written CommunicationsATTN: Document Control Desk UFTR Operating License R-56, Docket 50-83Washington, D.C. 20555-0001Subject: UFTR Supplemental Response to Request for Additional Information(TAC NO. ME1586)In July 2002, the UFTR submitted a request for license renewal (ML022130145). InFebruary 2010 and May 2010, the UFTR provided supplemental information intended toupdate the financial information made previously in the license renewal process(ML100610445 and ML101250177). By letter dated June 9, 2014, the NRC requestedupdated financial information (ML1321A048). In September 2014, the UFTR providedupdated financial information (ML 14255A368).Attached is additional updated financial information, including a new Statement of Intentletter.This submittal has been reviewed and approved by UFTR management and by the ExecutiveCommittee of the Reactor Safety Review Subcommittee.I declare under penalty of perjury that the foregoing and attached are true and correct to myknowledge.Executed on March 25, 2015.Brian SheaReactor Manager035The Foundation for The Gator NationAn Equal Opportunity Institution UFUNIVERSITY fOffice of the Vice President 1 Tigert Halland Chief Financial Officer P 0 Box 113240Gainesville, FL 32611-3240352-392-2402 Telephone352-846-3546 FaxDocument Control DeskU.S. Nuclear Regulatory CommissionWashington, D.C. 20555Re: DOCKET 50-83, STATEMENT OF INTENTAs Chief Financial Officer of the University of Florida, I exercise express authority andresponsibility to request from the State of Florida funds for decommissioning activitiesassociated with operations authorized by U.S. Nuclear Regulatory Commission License No. R-56. This authority is established by the University of Florida Board of Trustees resolution R01-1.Within this authority, I intend to r~quest that funds be made available when necessary in theamount of $4.5 million to decommission the University of Florida Training Reactor, located inGainesville, Florida (the current decommissioning cost estimate is $4.03 million). I intend torequest and obtain these funds sufficiently in advance of decommissioning to prevent delay ofrequired activities.A copy of Resolution R01-1 is attached as evidence that I am authorized to represent theUniversity of Florida in this transaction.Michael V. McKeeInterim Vice President and Chief Financial OfficerUniversity of FloridaFebruary 17, 2015Attachment: As statedcc: Dean -College of EngineeringUFTR Facility DirectorUFTR Reactor ManagerUFTR Licensing EngineerThe Foundation for The Gator NationAn Equal Opportunity Institution UNIVERSITY OFFLORIDABOARD OF TRUSTEESRESOLUTIONNumber: R01-1Subject: Presidential AuthorityDate: September 7, 2001The University of Florida Board of Trustees hereby resolves:(1) That the authority of the President of the University of Floridaunder current law, including the authority to enter into contracts on behalf ofthe University Board of Trustees, is hereby affirmed; and(2) That the President is hereby authorized to approve travel underSection 112.061, F.S., and to take routine administrative actions on behalf ofthe University of Florida Board of Trustees under the Florida AdministrativeProcedures Act, Chapter 120, F.S., which shall not include the approval ofUniversity rules.The President is authorized to further delegate to University personnelthe authority described as long as such delegation is in writing and a copy isfiled in the General Counsel's Office.This affirmation and authorization is effective as of July 1, 2001.Resolution KUFUNIVERSITY ofCollege of Engineering PO Box 11.6134Uiniversity qf Florida Training Reactor Gainesville, FL 32611-6134352-294-2104August 19, 2014MEMORANDUMTO Decommissioning File _FROM: Brian Shea, Reactor ManagerrSUBJECT: Annual Estimate of UFTR Decommissioning Cost per 10 CFR 50.75The estimated cost for the complete decommissioning of the University of Florida Training Reactor(UFTR) as of August 2014 is $4.03 million (CPI-U for July 2014). To meet the requirements of 10 CFR30.3 and 50.75 the decommissioning cost estimate is updated periodically to reflect any changes. Thebase cost estimate, in 1982 dollars, is adjusted based on changes in the Consumer Price Index (CPI) andLow Level Waste Disposal Adjustment Factor (Bx).Consumer Price Index Adjustment Factor (Fcpi)Consumer Price Index data can be found online at the US Department of Labor, Bureau of Labor6 Statistics. Using the CPIfor all urban consumers, US city average, all items (Base 1982), an adjustmentfactor of Fcpl,, is calculated by finding the ratio of the current CPI-U to the CPI-U for December 1982 asfollows:C P I1 238.25=2.441C P I Dec1982 97.6where, x corresponds to the current month and year.Waste Burial Adjustment Factor (FB)A Waste Burial Adjustment Factor, normalized to 1986 values, is found in Table 2-1 of the U.S. NuclearRegulatory Commission: Report on Waste Burial Charges (NUREG-1307, Rev. 15). First, the base isadjusted from 1986 to 1982 as follows:B1982 ýnB1986/(C P IDec1982 1/(976. )=0.883C P 'Dec1986 97.6Then the Waste Burial Adjustment Factor for a given year is calculated as follows:14.160IF= -X=1.6 = 16.032B- B1982 0.883where, x corresponds to the year of the most recently published adjustment factorThe Foundation for The Gator Nation Estimated Decommissioning CostDecommissioning Cost = FB , (1982 Cost of Radioactive Waste disposal) +Fcpi (1982 Total Cost Estimate -1982 Cost of Rad Waste Disposal)-14160238 25.148160 (199,00)+0 ( 541,000-199,000)=4"03 millionAttachmentscc: Facility Director (memo only)RSRS Members (memo only)

Table 2-1. Values of B, as a Function of LLW Burial Site, Waste Vendor, and Year(a)B, Valu, for Washington : lteb8BVal uesi for.,outh CaoiaStB. Values for Generic LLW'5 K Disposal Site1'lAtlantic Comipact., <1.'iNon-Atlantic Compact~d)...: .:. : : ..., ..........Compact-,AffiliatedFacility Oniy~g)CombinatlionpCompact-..;Affiliated and~Affiliated"Facility Oniy~tq'Combination ofComnpact-',".Affiliated' and,'Non-Compact'Facilityl'Compact.I;:,Affiliated.Fa-cility Only!g)'Combination ofCompact-Affiliated and"Non -CornvactCompact-Affiliated'Facility Only1~".Combination of,II Compact-'Affilited 'and'Non.Cr act'<FS'6lgYear PWR BWR PWR BWR PWR BWR PWR BWR PWR BWR PWR BWR PWR BWR PWR BWR2012 7.335 6.704 7.375 6.076 30.581 27.295 13.885( ý.16ý0 NA NA NA NA 30.581 27.295 13.885 14.1602010 8.035 7.423 6.588 5.458 27.292 24.356 12.280 12.540 NA NA NA NA 27.292 24.356 12.280 12.5402008 8.283 23.185 5.153 20.889 25.231 22.504 9.872 11.198 NA NA NA NA 25.231 22.504 9.872 11.1982006 6.829 11.702 3.855 9.008 22.933 20.451 8.600 9.345 23.030 20.813 8.683 10.206 NA NA NA NA2004 5.374 13.157 3.846 11.755 19.500 17.389 7.790 8.347 21.937 17.970 7.934 8.863 NA NA NA NA2002 3.634 14.549 5.748 15.571 17.922 15.988 9.273 8.626 18.732 16.705 9.467 8.860 NA NA NA NA(a) The values shown in this table are developed in APPENDIX B, with all values normalized to the 1986 Washington PWR and BWR values bydividing the calculated burial costs for each site and year by the Washington site burial costs calculated for the year 1986.(b) Effective 1/1193, the Washington site no longer accepted waste from outside the Northwest and Rocky Mountain Compacts.(c) Effective 7/1/2000, rates are based on whether a waste generator is or is not a member of the Atlantic Compact.(d) Effective 7/1/2008, the South Carolina site no longer accepted waste from outside the Atlantic Compact.(e) B, values for the generic site are assumed to be the same as that provided for the Atlantic Compact, for lack of a better alternative at this time.(f) Effective with NUREG-1 307, Revision 8 (Ref. 3), an alternative disposal option was introduced in which the bulk of the LLW is assumed to bedispositioned by waste vendors and/or disposed of at a non-compact disposal facility.(g) Effective with NUREG-1 307, Revision 15, the nomenclature for the two disposal options, referred to as "Direct Disposal" and 'Direct Disposalwith Vendors" in previous revisions of NUREG-1 307, is changed to "Compact-Affiliated Disposal Facility Only" and "Combination of Compact-Affiliated and Non-Compact Disposal Facilities" to better describe these options.4 NUREG-1 307 Table 24. Historical Consumer Price Index for All Urban Consumers (CPI-U)ý U. S. city average, all items-Continued(1982-84=100, unless otherwise noted)Year Jan. Feb. Mar. Apr. May June f July Aug. Sep. Oct. Nov. Dec.19701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201437.839.841.142.646.652.155.658.582.568.377.887.094.397.8101.9105.5109.6111.2115.7121.1127.4134.6138.1142.6146.2150.3154.4159.1161.6164.3168.8175.1177.1181.7185.2190.7198.338.039.941.342.947.252.555.859.162.969.178.987.994.697.9102.4106.0109.3111.6116.0121.6128.0134.8138.6143.1146.7150.9154.9159.6161.9164.5169.8175.8177.8183.1186.2191.8198.738.240.041.443.347.852.755.959.563.469.880.188.594.597.9102.6106.4108.8112.1116.5122.3128.7135.0139.3143.6147.2151.4155.7160.0162.2165.0171.2176.2178.8184.2187.4193.3199.8205.3522 13.528212.709217.63 1223.467229.392232.773236.29338.540.141.543.648.052.956.160.063.970.681.089.194.998.6103.1106.9108.6112.7117.1123.1128.9135.2139.5144.0147.4151.9156.3160.2162.5166.2171.3176.9179.8183.8188.0194.6201.5206.686214.823213.240218.009224.906230.085232.53 1237.07238.640.341.643.948.653.256.560.364.571.581.889.895.899.2103.4107.3108.9113.1117.5123.8129.2135.6139.7144.2147.5152.2156.6160.1162.8166.2171.5177.7179.8183.5189.1194.4202.5207.949216.632213.8562 18.178225.964229.815232.945237.90038.840.641.744.249.053.656.860.765.272.382.790.697.099.5103.7107.6109.5113.5118.0124.1129.9136.0140.2144.4148.0152.5156.7160.3163.0166.2172.4178.0179.9183.7189.7194.5202.9208.352218.815215.693217.965225.722229.478233.504238.34339.040.741.944.349.454.257.161.065.773.182.791.697.599.9104.1107.8109.5113.8118.5124.4130.4136.2140.5144.4148.4152.5157.0160.5163.2166.7172.8177.5180.1183.9189.4195.4203.5208.299219.964215.351218.011225.922229.104233.59639.040.842.045.150.054.357.461.266.073.883.392.397.7100.2104.5108.0109.7114.4119.0124.6131.6136.6140.9144.8149.0152.9157.3160.8163.4167.1172.8177.5180.7184.6189.5196.4203.939.240.842.145.250.654.657.661.466.574.684.093.297.9100.7105.0108.3110.2115.0119.8125.0132.7137.2141.3145.1149.4153.2157.8161.2163.6167.9173.7178.3181.0185.2189.9198.8202.9208.490218.783215.969218.439226.889231.407234.14939.440.942.345.651.154.957.961.667.175.284.893.498.2101.0105.3108.7110.3115.3120.2125.6133.5137.4141.8145.7149.5153.7158.3161.6164.0168.2174.0177.7181.3185.0190.9199.2201.8208.9362 16.573216.177218.711226.42 1231 .317233.54639.640.942.445.951.555.358.061.967.475.985.593.798.0101.2105.3109.0110.4115.4120.3125.9133.8137.8142.0145.8149.7153.6158.6161.5164.0168.3174.1177.4181.3184.5191.0197.6201.52 10.177212.4252 16.330218.803226.230230.22 1233.06939.841.142.546.251.955.558.262.167.776.786.3101.3105.3109.3110.5115.4120.5126.1133.8137.9141.9145.8149.7153.5158.6161.3163.9168.3174.0176.7180.9184.3190.3196.8201.8210.036210.228215.949219.179225.672229.601233.049202.416211.080211. 1432 16.687220.223226.665230.280233.916203.499211.693212.193216. 74 1221.309227.663232.166234.78 1207.917219.086215.834218.312226.545230.379233.877See footnotes at end of table.

Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category,July 2014[1982-84=100, unless otherwise notediRelative Unadjusted indexes Unadjusted percent Seasonally adjusted percentimpor- change changeExpenditure category tance Jul. Jun. Apr. May Jun.Jun. Jul. Jun. Jul. 2013- 2014- 2014- 2014- 2014-2014 2013 2014 2014 Jul. Jul. May Jun. Jul.1 2014 2014 2014 2014 2014A ll item s .............................................F o o d ..............................................Food at home .............................Cereals and bakery products ............Meats, poultry, fish, and eggs ........ '...Dairy and related products' ..............Fruits and vegetables .....................Nonalcoholic beverages and beveragem aterials ..................................Other food at home ........................Food away from home' ......................E ne rgy ............................................Energy commodities .........................F ue l o il' .....................................M otor fuel ...................................Gasoline (all types) ...................Energy services2 .............................E lectricity2..................................Utility (piped) gas service2 ................All items less food and energy ................Commodities less food and energycom m odities ................................A pparel ......................................New vehicles ...............................Used cars and trucks ......................Medical care commodities .........Alcoholic beverages .......................Tobacco and smoking products1 ........Services less energy services ..............S helte r .......................................Rent of primary residence2 ............Owners' equivalent rent ofresidences' 3 ..........................Medical care services .....................100.000 233.59613.837 237.0018.188 233.5911.122 271.2791.922 235.8590.865 215.9201.348 287.7730.9282.0045.6499.7995.8250.1675.5665.4803.9743.0840.89076.36419.3793.3833.4871.6781.7130.9900.70056.98531.8406.91323.6355.8131.5551.8005.5891.1382.1990.825165.412205.872243.409251.370314.380359.780311.757310.886202.087209,538177.356233.792146.872124.215145.726152.554334.673235.022881.770286.617263.451267.482270.537453.773354.775263.698281.080262.229420.073315.789238.343242.326239.147270.860252.865224.522295.139164.700205.996248.445259.858322.920370.317319.692318.334211.038217.529188.769238.157147.087127.302146.067151.978343.224236.569907.216293.668270.314275.321277.256464.960359.056278.695289.018265.656435.654342.697239.820271.993253.767225.140293.535165.211207.390249.210257.907318.294367.725314.901313.514211.563217.930189.659238.138146,452124.645146.086152.857344.687236.387904.614294.068271.115276.248277.886465.166358.585279.587286.239266.282436,342315.0122.02.52.70.37.64.32.0-0.10.72.42.61.22.21.00.84.74.06.91.9-0.30.30.20.23.00.62.62.62.93.32.72.51.16.01.81.53.9-0.20.00.30.30.40.40.3-0.50.30.70.3-0.8-1.4-0.7-1.5-1.50.20.20.50.0-0.4-2.10.00.60.4-0.1-0.30.10.30.30.20.0-0.10.3-1.00.20.2-8.10.40.50.7-0.11.40.61.10.40.30.20.90.6-1.40.80.71.42.3-1.70.30.10.30.2-0.10.50.00.20.30.30.30.20.30.40.31.00.20.65.80.30.10.0-0.20.2-0.4-0.30.00.10.21.63.0-1.73.33.3-0.40.2-2.60.10.10.5-0.3-0.40.7-0.11.00.10.20.30.20.0-0.30.20.10.20.20.40.10.40.40.40.30.30.00.50.70.3-0.3-0.3-0.7-0.3-0.3-0.4-0.3-0.40.10.00.20.3-0.30.3-0.1-0.30.10.30.30.30.1-0.20.4-0.70.20.2-5.9Physicians' services2 ...................Hospital services2,' .....................Transportation services ...................Motor vehicle maintenance andrepa ir .......... .......................Motor vehicle insurance ................Airline fare...................Not seasonally adjusted.1Not seasonally adjusted.2 This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric meansestimator.3 Indexes on a December 1982=100 base.4 Indexes on a December 1996=100 base.NOTE: Index applies to a month as a whole, not to any specific date.

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BIG DRAM AN AMIIUS 0A As the year draws to a close, theUniversity of Florida is on soundfinancial footing -well-prepared tomove forward while deepening itspositive impact on the community,country and world.W ith the economic downturn in therearview mirror, the Florida Legislaturethis spring provided more than $100 million inadditional funding to UF. This came on the heelsof the Legislature's 2013 restoration of S300million to State universities' budget cut in theprevious year.What's more, the University broke its annualfundraising record for the second year in a row,netting $215.3 million for the 2013-14 fiscal year.In the future, we will need to raise our tuitionto generate the revenue enjoyed by our peeruniversities, most of which have far highertuitions. Still, these positive financial trendsare already having benefits throughout theUniversity.This may be most visible in the PreeminencePlan, our effort to rise among the nation'stop public universities through advancing UFresearch and scholarship,At the heart of this plan is our ongoingcampaign to hire midcareer and highlyaccomplished research faculty in areas ofparticular promise -or who have the potentialto elevate current UF strengths to the next level.Un[verý,ity of Floi idi 2013-2014 Annual Financial ReportBy early November 2014, UF had brought onboard 60 of these accomplished new faculty,about half of the University's expected totalpreeminence hires. Hailing from institutionsas diverse as the University of Pennsylvania,UNC-Chapel Hill and Utrecht University in theNetherlands, their expertise ranges from foodsecurity to early childhood education to creativewriting to archaeology to biomedicine.With the State continuing to back UF as Florida'sonline university, we also broadened our effortsin online education.UF Online, among the nation's first fully onlineprograms for undergraduates, began itsfirst full academic year in fall 2014. It has 11undergraduate degree programs, includingbiology, geology and sports management.This effort remains very much a work inprogress, with many unknowns, from what typesof students will find online education appealingto what programs will prove most popular. Butthere is no question that online education offersunique opportunities to grow UF's enrollmentand extend P college education to those who........cannot come to our campus.A third area.of advancement came with thecontinued development of the core curriculumfor undergraduates.Building on the "What is the Good Life?" classrequired for all first-year students, UF beganpiloting two new core classes this fall -the firstrevolving around climate change; the second,data analysis. The University expects to beginoffering thesescourses to all undergraduatesnext year, taking another step toward asignature undergraduate program that is bothunique to UF and shared among all students.The Preeminence Plan, UF Online and the corecurriculum will all help to raise UF's profileamong its peer universities -but building athriving creative community surrounding theUniversity is also central to this goal.As a result, UF continued to focus ondeveloping Innovation Square, the public-private partnership created in 2009 to nurtureGainesville's technology community and joincampus with downtown.Among other milestones from the past year:Signet Enterprises became the first privatecompany to construct a bricks-and-mortarbuilding at Innovation Square. Infinity Hall,to open in September 2015, will housemore than 300 entrepreneurially mindedundergraduates under joint UF-Signetmanagement.Zeeko joined Curtco Media, Azalea Health,BioMonde, Mobiquity and Mindtree amongthe outside technology companies thathave opened facilities in Innovation Square,Together, these companies have createdmore than 300 jobs. Many are both high-paying and high-skill positions.* More than two dozen spinoffs filledthe Florida Innovation Hub technologyincubator, while companies that outgrew theHub continued to expand in other locationsaround Gainesville.I will step down in December after serving asUF's president for 11 years. While we have facedour share of financial challenges, especiallydurin~the downturn, I feel optimistic about.our current position and our path ahead. Withadequate resources, there is no limit to whatour faculty can achieve in'education, researchand scholarship -changing students' lives andhelping to bring.prosperity, understandingand equity to the world. It's a great time tobe a Gator, and I wish the University and thecommunity the very best!.J. Bernard MachenPresident, University of Florida 6 .0nvrst ofFordKnowledge by the NumbersCollege/ScoolAccountingAgricultural and Life SciencesBuilding ConstructionBusiness AdministrationDentistryDesign, Construction, and PlanningDivision of Continuing Education (A)EducationEngineeringFine ArtsForest Resources and ConservationHealth and Human PerformanceHigh SchoolInterdisciplinary EcologyJournalism and CommunicationsLawLiberal Arts and SciencesMedicineMultiple-College ProgramNatural Resources and EnvironmentNursingPharmacyPharmacy DoctorPhysician Assistant ProgramPublic Health & Health ProfessionsVeterinary MedicineSUB-TOTAL2013 2012 2011 2010 2009889 857 865 905 8714,828 4,835 4,955 4,940 4,640345 383 391 499 5815,396 4,985 .4,681 4,728 4,947402 385 389 378 379883 855 896 899 899113 141 179 215 2591,577 1,732 ,1,749 1,88613 1,9198,774 8,716 8,454 8,240 7,8801,322 1,294 1,256 1,309 1,284----2221,979. 1,973 2,047 2,008 1,90871. 57 52 47 44101 104 116 127 1352,710 2,693 2,540 2,516 2,6631,071 1,105 1,118 1,191 1,26312,221 12,514 12,673 12,817 13,368806 823 '862 853 9672 1 1 2107 120 155 154 1581,045 1,162 1,170 1,090 1,188850 847 823 836 7611,545 1,584 1,686 1,752. 1,891121 119 119 119 1192,315 2,213 2,122 2,139 1,971674 648 542 530 52550,147 50,145 49,841 50,179 50,84452 59 56 63 6050,095 50,086 49,785 50,116 50,784Minus Concurrent DegreeTOTAL(A) Includes Continuing Education and correspondence courses for students not enrolled in a college.Source: UF Facts -UF Office of Institutional Planning and ResearchDge 2011 .2,44(5" j001 2009.10Degree 2013-14 2012-13 2011-12 2010-11 2009-10Bachelor'sMaster'sDoctor of PhilosophyDoctor of PharmacyJuris DoctorDoctor of MedicineDoctor of Dental MedicineDoctor of Veterinary MedicineSpecialist in EducationTOTAL8,515 8,245 8,600 8,685 9,3024,174 3,929 3,924 3,878 3,751950 880 859 936 957430 427 461 484 483304 361 334 410 377129 131 134 127 13083 79 82 83 9198 86 84 87 8973 88 71 .70 111............... 2 1........4...... 7 .1..5........... ..... ............ 0 ................10,56 14,226 14,549 14,760 15,291Source: Final degree information from the Degrees Awarded File -UF Office of Institutional Planning and Research 2013-2014 Annual Financial ReportIn-State Enrollmentby County -Fall 2013Total In-State Enrollment:40468Pese rch Awards by Sponsfor 203-14 tiscaE Federal Agencies$465,296,894EFlorida State Agencies$44,842,935Corporations & Companies$72,150,763EFoundations & Non-Profits$86,071,558Local & RegionalS $7,232,063E All Other Sources$26,102,832Total$701,697,0451%Visit Gator~oootutl.eiu to learn about the issues we're tackling:OC~~~~~~~~A~: ADýE TCC =vWTP 0LJI~Jjj73~ILES~3PAii E11:.:UL t2Vý A 1 POU .C~ URELtz2] f P~rt!aC t N UI_, ]A Component Unit of the State of Florida 1 7 Introduction from the Vice Presidentand Chief Financial Officeram pleased to present the University of FloridaAnnual Financial Report for the fiscal yearended June 30, 2014. This report provides usefulinformation concerning the University's financialposition and activities for the year. The Universityhad a strong financial year as evidenced by anet position of more than $2.49 billion, a 5.1%increase when compared to the 2012-13 fiscalyear. Management's Discussion and A:nalysis,financial statements, and notes to the financialstatements document the University's financialsuccess and health for this fiscal year.During the 2013-14 fiscal year, Noncapital StateAppropriations increased by 24.8%/, or $120.4million with $30 million received to advance thegoal of reaching national preeminence and toimplement the State's online university program.Tuition revenue increased a modest $6.3 million,or 1.8% for the fiscal year. The Universitycontinues to have one of the lowest costs ofattendance of all public research universitiesnationwide and continues to be an excellent valuefor the investment.Capital State Appropriations totaled $43.6 million,a S34.1million increase over the prior fiscal yearof S9.5 million. The increase in Capital State,Appropriations provided needed funds to addressa number of deferred maintenance projects andenable the University to continue to maintain itsbeautiful and historic campus.Heavener Hall, completed in November 2014,houses; for the first time, the undergraduateprogram of the Warrington College of Businessunder one roof and provides 24/7 access forits students. .This 57,000 square foot building*features state-of-the~art technology, studyrooms. and professional development centers.The Heavener Hall project also allowed forthe creation of anew, more prominent andpedestrian-friendly gateway into the University.Of special note, April 5,.2014, marked thededication and celebration of the newly built.Austin Cary Learning Center, replacing the AustinCary Conference Center that burned down in2011. Other construction projects completedduring the 2013-14 fiscal year included theGovernment House Renovation and MuseumExhibit projects located in historic St. Augustine.Designed for undergraduate students andstudents with disabilities, Cypress Hall, a newsingle student residence building, is expectedto be substantially complete in April 2015. TheUniversity's 25th residence hall, will add 255bed spaces with rooms on the first floor toaccommodate students with significant mobilityimpairments.On June 2, 2014, Governor Scott signed the StateUniversity System budget for the 2014-15 fiscalyear. This budget includes a significant increasein funding for higher education -including $200million for performance funding, of which theUniversity of Florida will receive $39.8 million.The investment in performance funding marksthe first time such a significant portion offunding has been directed toward rewardingexcellence and improvement. The budget also,includes nearly $16 million for the UF.HealthCancer Center to support an effort to obtainthe National Cancer Institute (NCI) designation.We are encouraged by this additional funding toobtain the NCI designation and to help our Statebecome a national lediaer in cancer tare.The Office of the Vice President and ChiefFinancial Officer is committed to effectively.manage the Universitys assets and facilitate thecomprehensive business needs as the Universityrises to being a top ten public research university.Michael V. McKeeInterim Vice President andChief Financial Officer AUDITOR GENERALSTATE OF FLORIDADAVID W. MARTIN, CPA G74 Claude Pepper Building PHONE: 850-412-2722AUDITOR GENERAL 111 West Madison Street FAx: 850-488-6975Tallahassee, Florida 32399-1450The President of the Senate, the Speaker of theHouse of Representatives, and theLegislative Auditing CommitteeINDEPENDENT AUDITOR'S REPORTReport on the Financial StatementsWe have audited the accompanying financial statements of the University of Florida, a component unit of the State of Florida, and itsaggregate discretely presented component units as of and for the fiscal year ended June 30, 2014, and the related notes to the financialstatements, which collectively comprise the University's basic financial statements as listed in the table of contents.Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accountingprinciples generally accepted in the United States of America; this includes the design, implementation, and maintenance of internalcontrol relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due tofraud or error.Auditor's ResponsibilityOur responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements ofthe blended and the aggregate discretely presented component units. The financial statements of the University of FloridaSelf-Insurance Program and the University of Florida Healthcare Education Insurance Company, blended component units, represent5.7 percent, 5.6 percent, and 1.1 percent, respectively, of the assets, net position, and revenues reported for the University of Florida.The financial statements of the aggregate discretely presented component units represent 100 percent of the transactions and accountbalances of the aggregate discretely presented component units' columns. The financial statements of the blended and the aggregatediscretely presented component units were audited by other auditors whose reports have been furnished to us and our opinions, insofaras they relate to the amounts included for the blended and aggregate discretely presented component units, are based solely on thereports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in GoernienIt Auditing Slandards issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theprocedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, weexpress no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.10 1 University of Florida 2013-2014 Annual Financial ReportOpinionsIn our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in allmaterial respects, the respective financial position of the University of Florida and of its aggregate discretely presented component unitsas of June 30, 2014, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year thenended, in accordance with accounting principles generally accepted in the United States of America.Report on Partial Comparative InformationWe have previously audited the University of Florida's 2012-13 fiscal year financial statements, and we expressed an unmodified auditopinion on those audited financial statements in our report dated December 20, 2013. In our opinion, the partial comparativeinformation presented herein as of and for the fiscal year ended June 30, 2013, is consistent, in all material respects, with the auditedfinancial statements from which it has been derived.Other MattersRequired Supp/ementaO, InjbriationAccounting principles generally accepted in the United States of America require that MANAGEMENT'S DISCUSSION ANDANALYSIS and SCHEDULE OF FUNDING PROGRESS -OTHER POSTEMPLOYMENT BENEFITS PLAN, as listed inthe table of contents, be presented to supplement tie basic financial statements. Such information, although not a required part of thebasic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part offinancial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We haveapplied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted inthe United States of America, which consisted of inquiries of management about the methods of preparing the information andcomparing the information for consistency with management's responses to our inquiries, the basic financial statements, and otherknowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance onthe information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide anyassurance.0/her InformationOur audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the University ofFlorida's basic financial statements. The University of Florida Overview, President's Message, Knowledge by the Numbers,Introduction from the Vice President and Chief Financial Officer, and Supplemental Information for Financial Aid Administered, aslisted in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financialstatements. The University of Florida Overview, President's Message, Knowledge by the Numbers, Introduction from the VicePresident and Chief Financial Officer, and Supplemental Information for Financial Aid Administered have not been subjected to theauditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide anyassurance on them.Other Reporting Required by Government Auditing StandardsIn accordance with Government Auditing Standards, we have also issued a report on our consideration of the University of Florida's internalcontrol over financial reporting and on our tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grantagreements and other matters included under the heading INDEPENDENT AUDITOR'S REPORT ON INTERNALCONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENTAUDITINGSTANDARDS. The purpose of that report is to describe the scope of our testing of internal control over financial reporting andcompliance and results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University ofFlorida's internal control over financial reporting and compliance.Respectfully submitted,David W. Martin, CPATallahassee, FloridaDecember 16, 2014Audit Report No. 2015-074A Component Unit of the State of Florida 1 11 MANAGEMENT'S DISCUSSION AND ANALYSISFrom the Vice President and Chief Financial OfficerIntroduction And Background Financial HighlightsThe Management's Discussion and Analysis (MD&A) providesan overview of the financial position and activities of theUniversity of Florida (the University) for the fiscal year endedJune 30, 2014, and should be read in conjunction with thefinancial statements and notes thereto. This overview isrequired by Governmental Accounting Standards Board(GASB) Statement No. 35, Basic Financial Statements -andManagement's Discussion and Analysis -for Public Collegesand Universities, as amended by GASB Statements Nos.37 and 38. The MD&A, and financial statements and notesthereto, are the responsibility of University management.The University's assets totaled $3.2 billion at June 30, 2014.This balance reflects a $201.5 million, or 6.6%, increasefrom the 2012-13 fiscal year. The increase in assets resultedprimarily from a significant increase in construction projectsas well as temporary investments of proceeds from newbonds. While total assets increased, liabilities also increasedby $81.7 million or 12.2%, totaling $754.0 million at June 30,2014, primarily as a result of a $62.2 million increase in CapitalImprovement Debt Payable and a $40.9 million increase inOther Postemployment Benefits Payable. The University'snet position increased by $119.8 million, or 5.1%, resulting in12 1 University of Florida 2013-2014 Annual Financial Reporta year-end balance of $2.49 billion. Net position representsthe residual interest in the University's assets after deductingliabilities. The University's comparative total net position bycategory for the fiscal years ended June 30, 2014, and 2013,are shown in the following chart:$1,565 $1,554$1,600$1,200$800$400$0$775 $695$149 $119Net Investment in RestrictedCapital AssetsUnrestrictedThe University's operating revenues totaled $1.7 billion for the2013-14 fiscal year, representing a 2.5% increase over the2012-13 fiscal year. Major components of operating revenuesare Student Tuition and Fees and Grants and Contracts. WhileStudent Tuition and Fees, Net of Scholarship Allowances,increased $6.3 million or 1.8%, Nongovernmental Grantsand Contracts revenue increased by $61.1 million, or 9.5%,because of increased transfers from the component units.The following chart provides a graphical presentation of theUniversity's total revenues by category for the 2013-14 fiscalyear:Net nonoperating revenues and expenses in the 2013-14 fiscal year increased $167.4 million. Noncapital StateAppropriations; Investment Income, Net of Expenses; andFair Value of Investments increased by $163.3 million dueto increased appropriations and an improving investmentmarket.The University had significant construction activity duringthe year. Construction began or continues on several majorprojects, including four that, when completed, will becapitalized at over $203.4 million: (1) Reitz Union Expansionand Renovation; (2) Chemical Biology Building -Chemistry; (3)Harrell Medical Education Building; and (4) Heavener Hall -School of Business Building.Overview Of Financial~tatementbPursuant to GASB Statement No. 35, the University's financialreport includes three basic financial statements: the Statementof Net Position; the Statement of Revenues, Expenses, andChanges in Net Position; and the Statement of Cash Flows.The financial statements and notes thereto, encompass theUniversity and its component units.Based upon the application of criteria for determiningcomponent units, the University of Florida Self-InsuranceProgram (the Program), and the University of FloridaHealthcare Education Insurance Company (HEIC), areincluded within the University reporting entity as blendedcomponent units. Additional information regarding theblended component units is presented in Notes 1 and 19 tothe financial statements.In addition, the University's basic financial statements includediscretely presented component units categorized as follows:Direct-Support Organizations -These are separate, not-for-profit corporations organized and operated exclusivelyto assist the University in achieving excellence by providingsupplemental resources from private gifts, bequests, andvaluable education support services.Health Science Center Affiliates -These are the severalcorporations closely affiliated with the University of FloridaJ. Hillis Miller Health Science Center, including the FacultyPractice Plans.Shands Hospital and Others -This includes Shands TeachingHospital and Clinics, Inc., a not-for-profit corporation that iscontractually obligated to manage, operate, maintain, andinsure the hospital facilities in support of the programs of theHealth Science Center at the University of Florida.Information regarding the discretely presented componentunits, including summaries of their separately issued financialstatements, is presented in Notes 1, 2, 3, 6,9, 12, and 19 to thefinancial statements. This MD&A focuses on the University,Operating expenses totaled $2.5 billion for the 2013-14 fiscalyear, representing a $109.3 million or 4.7% increase comparedto the 2012-13 fiscal year. The two largest categoriescontributing to this increase were Employee Compensationand Benefits, reflecting the increase in Other PostemploymentBenefits Payable, and Services and Supplies.A Component Unit of the State of Florida 13 MD&Aexcluding the discretely presented component units. MD&Ainformation regarding the component units is included intheir separately issued audit reports, if reporting underGASB standards. Component units reporting under FinancialAccounting Standards Board (FASB) standards do not includean MD&A in their audit reports.The financial statements characterize revenues and expensesas either operating or nonoperating. The principal componentof operating revenues is Grants and Contracts ($1.1 billion).The principal component of operating expenses is EmployeeCompensation and Benefits ($1.7 billion). A significant portion ofthe University's anticipated, recurring resources is considerednonoperating as defined by GASB Statement No. 35. Theprincipal component of nonoperating revenues for the fiscalyear ended June 30, 2014, is Noncapital State Appropriations($605.9 million). Recurring nonoperating expenses consistprimarily of Interest on Capital Asset-Related Debt.Statement Of Net PositionThe Statement of Net Position reflects the assets and liabilitiesof the University, using the accrual basis of accounting, andpresents the financial position of the University at a specifiedtime. Net position, the difference between total assets andtotal liabilities, is one indicator of the University's currentfinancial condition. The changes in net position that occur overtime indicate improvement or deterioration in the University'sfinancial condition. The following table summarizes theUniversity's assets, liabilities, and net position at June 30:2014 2013activity, categorized as operating and nonoperating. Revenuesand expenses are recognized when earned or incurred,regardless of when cash is received or paid. The followingtable summarizes the University's activity for the 2013-14 and2012-13 fiscal years:2013-14 2012-13Operating RevenuesOperating ExpensesOperating Loss$ 1,659.9 $ 1,618.8J2,455.91, (2,346.6)(796.0)(727.8)687.1Net Nonoperating RevenuesIncome (Loss) Before Other Revenues,Expenses, Gains, or LossesOther Revenues, Expenses,Gains, or LossesIncrease (Decrease) in Net PositionNet'Position, Beginning of Year854.558.5 (40.7)61.3119.82,369.0$ 2,488.823.4(17.3)2,386.3$ 2,369.0Net Position, End of YearOperating RevenuesGASB Statement No. 35 categorizes revenues as eitheroperating or nonoperating. Operating revenues generallyresult from exchange transactions where each of the partiesto the transaction either gives or receives something of equalor similar value. The following table summarizes the operatingrevenues by source that were used to fund operating activitiesduring the 2013-14 and 2012-13 fiscal years:2013-14 2012-13Assets:Current AssetsCapital Assets, NetOther Noncurrent AssetsTotal Assets$ 1,338.51,714.7189.6Liabilities:Current LiabilitiesNoncurrent LiabilitiesTotal LiabilitiesNet Position:Net Investment in Capital AssetsRestrictedUnrestrictedTotal Net Position214.9539.1754.-01,565.3774.9148.6$ 1,213.41,686.3141.6_ 3,041.3244.1428.2672.31,554.4695.3119.3Grants and ContractsStudent Tuition and Fees, Net ofScholarship AllowancesSales and Services of Auxiliary EnterprisesSales and Services ofEducational DepartmentsOtherTotal Operating Revenues$ 1,115.7 $ 1,079.9358.7129.952.03.6352.4131.451.63.5$ 1,659.9 $ 1,618.8$ 2,488.8 $ 2,369.0Statement Of Revenues,Expenses, And Changesin Net Positio nThe Statement of Revenues, Expenses, and Changes in NetPosition presents the University's revenue and expenseOperating ExpensesExpenses are categorized as operating or nonoperating. Themajority of the University's expenses are operating expensesas defined by GASB Statement No. 35. GASB gives financialreporting entities the choice of reporting operating expenses inthe functional or the natural classifications. The University haschosen to report the expenses in their natural classifications14 University of Florida POW 14 wt;lp 2013-2014 Annual Financial Reporton the Statement of Revenues, Expenses, and Changes in NetPosition and has displayed the functional classifications belowand in the notes to the financial statements. The followingtable summarizes the operatina expenses for each method ofNo openat4"g RevenuesAnd Expe 3sesclassification for the 2013-14 and 2012-:Certain revenue sources that the University relies on toL3 fiscal years:provide funding for operations, including Noncapital StateAppropriations, certain gifts and grants, and investmentincome, are defined by GASB as nonoperating. Nonoperating2M13414 2012-13 expenses include capital financing costs, other costs relatedto capital assets, and transfers to component units.Natural ClassificationsEmployee Compensation and BenefitsServices and SuppliesDepreciationScholarships, Fellowships and Waivers *Utilities and CommunicationsSelf-Insured Claims and ExpensesTotal Operating ExpensesFunctional ClassificationsInstructionResearchPublic ServiceAcademic SupportInstitutional SupportDepreciationAuxiliary OperationsOperation and Maintenance of PlantScholarships, Fellowships and Waivers *Student Services$ 1,724.9$ 1,619.9472.5 480.8 The University experienced an increase in State Appropriations123. 121.4 revenue and investment income, while interest on capital78.4 82.062.8 64.7 asset-related debt increased. Noncapital Grants, Contracts,(5.8) (2.2) and Gifts decreased slightly and the net effect of these changes$ 2,455.9 $ Z increased net nonoperating revenues by $167.4 million. The.-following summarizes the University's nonoperating revenuesand expenses for the 2013-14 and 2012-13 fiscal years:201344 2012-13S 686.8584.7432.1167.2162.3123.1112.394.956.735.8$ 650.9582.4429.1154.3130.6121.4108.696.557.135.72013-14 2012-13Noncapital State Appropriations S 605.9Federal and State Student Financial Aid 117.0Noncapital Grants, Contracts, and Gifts 82.0Investment Income, Net of Expenses 33.9Increase in Fair Market Value of Investments 32.5Loss on Disposal of Capital Assets (2.)Interest on Capital Asset-Related Debt (8.0)Other Net Nonoperating Expenses (6.1)$ 485.5114.184.119.24.3(39)(6.1)(10.1)Total Operating Expenses $ 2,4A59 $ Z346.6* Net of Scholarship Allowances of $149.8 million in the 2073-14 fiscal yearand$148.1 million in the 2012-13 fiscal year.Net Nonoperating Revenues$ H%5 $ 687.1 MD&AOther Revenues, Expenses,Gains, Or LossesThis category is composed of Capital State Appropriationsand Capital Grants, Contracts, Donations, and Student Fees.The University received more in both of these categoriesdue to increases in State construction budgets and otheractivities of the University. Cash flows from capital and relatedfinancing activities include activities of the capital funds andrelated long-term debt. Cash flows from investing activitiesreflect the net source and use of cash related to the purchasesand sales of investments and income earned on thoseinvestments. Cash flows from noncapital financing activitiesinclude those activities not covered in the other sections.capital gifts. The following summarizrevenues, expenses, gains, or losse2012-13 fiscal years:Capital State AppropriationsCapital Grants, Contracts, Donations,and Student FeesTotal Other Revenues, Expenses,Gains, or Losseses the University's other Major sources of funds came from Noncapital State's for the 2013-14 and Appropriations ($605.9 million), Student Tuition and Fees, Net($361.7 million), Grants and Contracts ($1,113.8 million), andSales and Services of Auxiliary Enterprises ($130.7 million).Major uses of funds were for Payments to Employees ($1,666.5million), Payments to Suppliers for Goods and Services2013-14 2012-13 ($543.9 million), and the Purchase or Construction of CapitalAssets ($145.1 million). The following table summarizes cash$ 43.6 $ 9. flows for the 2013-14 and 2012-13 fiscal years:17.713.923.4$ 613 $Cash Provided (Used) by:Operating Activities $ (633.0) $ (557.0)Noncapital Financing Activities 770.0 734.3Capital and Related Financing Activities (58.3) (112.6)Investing Activities (78.8) (49Statement Of Cash FlowsThe Statement of Cash Flows provides information about theUniversity's financial results by reporting the major sourcesand uses of Cash and Cash Equivalents. This statement willassist in evaluating the University's ability to generate netcash flows, its ability to meet its financial obligations as theycome due, and its need for external financing. Cash flows fromoperating activities reflect the net cash used by the operatingNet Decrease in Cash andCash EquivalentsCash and Cash Equivalents,Beginning of YearCash and Cash Equivalents,End of Year(0W1) (02)030,5$ 02 $ 03 2013-2014 Annual Financial ReportCapital Assets, CapitalExpenses Anre Com i tments,And Debt AdministrationCAPITAL ASSETSAt June 30, 2014, the University had approximately S3.4billion in capital assets, less accumulated depreciation of$1.7 billion, for net capital assets of $1.7 billion. Depreciationcharges for the current fiscal year totaled $123.1 million. Thefollowing table summarizes the University's capital assets, netof accumulated depreciation, at June 30:2014 2013" 2014 2013Capital Improvement DebtLoans and NotesInstallment Purchase AgreementsCapital Leases$ 181.611.53.42.9$ 119.45.01.63.1LandBuildingsInfrastructure and Other ImprovementsFurniture and EquipmentLibrary ResourcesProperty Under Capital Leaseand Leasehold ImprovementsOther Capital AssetsConstruction in ProgressTotal Capital Assets (Nondepreciable$ 11.31,277.047.0182.953.97.94.3130.4$ 10.81,339.546.1.185.156.46.04.238.2and Depreciable, Net) $ 1,714.7 $ 1,686.3Additional information about the University's capital assets is presented inNote 8 to the financial statements.CAPITAL EXPENSES AND COMMITMENTSMajor capital expenses were incurred on the following ongoingprojects for the fiscal year ending June 30, 2014: ReitzUnion Expansion and Renovation ($18.7 million); HeavenerHall -School of Business ($13.2 million); and Harrell MedicalEducation Building (S8.3 million).The University's construction commitments at June 30, 2014,are as follows:AmountTotal Commitments $ 402.5Completed to Date 130.4Balance Committed $ 272.1Additional information about the University's capital construction commitmentsis presented in Note 15 to the financial statements.DEBT ADMINISTRATIONAt June 30, 2014, the University had $199.4 million inoutstanding Capital Improvement Debt Payable, Loans andNotes Payable, Capital Leases Payable, and InstallmentPurchase Agreements Payable, representing an increase of$70.3 million, or 54.5%, from the prior fiscal year. The followingtable summarizes the outstanding capital asset-related debtby type of debt at June 30:Total Capital Asset-Related Debt $ 199.4 $ 129.1Additional information about the University's capital asset-related debt ispresented in Note 12 to the financial statements.Econormic Factors Th-t WillThe recovery in the national economy is well underway andthe State's growth rates are returning to more typical levelsand continue to show progress. By the close of the 2013-14fiscal year, several key measures of the Florida economy hadreturned to or surpassed their prior peaks. These favorableeconomic outlooks are echoed in the State budget for thecoming fiscal year which includes more than $100 millionin new funding for the University of Florida. This reflects anextraordinary level of support from the Legislature and theGovernor for the University of Florida and the goal to becomeone of the nation's top ten public research universities.The budget for the 2014-15 fiscal year includes an additional$25.9 million in recurring dollars for meeting the performancemetrics developed by the Board of Governors. An additional$5 million was added to the preeminence initiative, bringingthe total to $20 million per year. In addition, the budgetincludes approximately $16 million for the UF Health CancerCenter to support an effort to obtain the National CancerInstitute (NCI) designation. The NCI designation will provideadditional State and Federal funding and access to moreclinical trials. Major Capital State Appropriations include $20million to complete a new chemistry building; $13.5 million forfacilities maintenance and repairs, with another S3 million forcritical deferred maintenance; and $10 million to renovate thehistoric Newell Hall into a student study center.The 2014-15 fiscal year budget provides the University withthe resources necessary to continue the advance to the topten public research universities, serve the State of Florida, andaddress critical facility needs on campus.Request.s For Informat-ionQuestions concerning information provided in the MD&Aor other required supplementary information, and financialstatements and notes thereto, or requests for additionalfinancial information should be addressed to the Office ofthe University Controller, P.O. Box 113200, Gainesville, Florida32611.A Component Unit of the State of Florida 1 17 University of Florida Component UnitsDirect-Support Health Science Shands Hospital20114 2013 Organizations Center Affiliates and OthersASSETSCurrent AssetsCash and Cash Equivalents (Note 1)Investments (Note 3)Accounts Receivable, Net (Note 4)Loans and Notes Receivable, Net (Note 4)Due From State (Note 5)Due From Component Units/University (Note 6)Inventories (Note 7)Other Current Assets$ 1521,161,02196,6302,78745,97725,1384,6902,130$ 2851,071,69490,8022,82114,79526,5034,5701,964$ 26,604 $192,289112,85846,538426,19755,716 $6,21883,40616,1702,49560,944176,322263,31815,78160,31824,44640,558Total Current AssetsNoncurrent Assets:Restricted Cash and Cash Equivalents (Note 1)Restricted Investments (Note 3)Loans and Notes Receivable, Net (Note 4)Depreciable Capital Assets, Net (Note 8)Nondepreciable Capital Assets (Note 8)Other Noncurrent Assets1,338,2514152,51036,9751,568,905145,8601,904,3273,242,8521213,43421104,05336,3751,633,26653,0721,0401,827,8273,041,261384,5269,6811,829,863178,72577,624108Z096.0012,480,529164,00519,51359,7458,7444,74592,747256,752Total Noncurrent Assets641,68719,500343,685768,822130,554218,5501,481,1112,122,79842,05263142,6832,165,481TOTAL ASSETSDEFERRED OUTFLOWS OF RESOURCESAccumulated Decrease in Fair Value of InterestRate Swap AgreementsLosses on Debt RefundingTOTAL DEFERRED OUTFLOWS OF RESOURCESTOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCESUABIUTIESCurrent Liabilities:Accounts PayableSalaries and Wages PayableDue To Component Units/University (Note 6)Unearned Revenue (Note 10)Deposits Held in CustodyOther Current Liabilities (Note 11)Long-Term Liabilities -Current Portion: (Note 12)Capital Improvement Debt PayableBonds PayableLoans and Notes PayableInstallment Purchase Agreements PayableCapital Leases PayableCompensated Absences PayableLiability for Self-Insured ClaimsTotal Current Uabilities$ 3242,852 $ 3,041261 $ 2,480,529 $256,752 $$ 64,13324,30446,54729,53619,0552018,6052811,26313711,6589,196$ 66,99219,25280,17425,43016,0867,1337,3078461299,14311,596$ 14,4293,85066,59862,0142,885$ 20,3867,09012,8271,70481$ 152,58471,14147,47123,6872,33910,58014,43024426,240201,2702,011193214,916244,0884429229722218 1 University of Florida University of FloridaComponent UnitsDirect-Support Health Science2013 Organizations Center AffiliatesShands Hospitaland Others2014Noncurrent Liabilities: (Note 12)Capital Improvement Debt Payable $Bonds PayableLoans and Notes PayableInstallment Purchase Agreements PayableCapital Leases PayableCompensated Absences PayableOther Postemployment Benefits PayableLiability for Self-Insured ClaimsOther Noncurrent LiabilitiesTotal Noncurrent LiabilitiesTOTAL LIABILITIESDEFERRED INFLOWS OF RESOURCESGains on Debt RefundingTOTAL UABILITIES AND DEFERRED INFLOWS OF RESOURCESNET POSITIONNet Investment in Capital AssetsRestricted:Nonexpendable:EndowmentExpendable:EndowmentLoansCapital ProjectsDebt ServiceOtherUnrestrictedTOTAL NET POSIONTOTAL UABIUTIES, DEFERRED INFLOWS OF RESOURCES,AND NET POSITIONThe accompanying notes are an integral part of these financial statements.172,974 $11,1922,0972,810114,293180,69036,60618,482539,144754,060754,0601,565,31336,31779,2944,433654,8661488,7923,2424Z52 $112,0945,0007722,947104,305139,77544,55118,76843.212672,300$80,6301,4723,11922,392107,613306,883$33,0368,0003495,677S672,2055,2602,3867500A91,018,10111,6681,059,769195,2259711,931898,4591,105,7126723001,554,44535,85364,2175,453589,690119,3032,368,961117,5601,196,686380,075326,610--15071,5Z.171,64685.67724,901146,174171,0753,041,261 $ 2Z480,529 $ 256,752 $ 2Z165,481A Component Unit of the State of Florida i 19 Basic Financial Statementsr~ ~~t4~ 4University of FloridaOPERATING REVENUESStudent Tuition and FeesScholarship AllowancesStudent Tuition and Fees, Net of Scholarship AllowancesFederal Grants and ContractsState and Local Grants and ContractsNongovernmental Grants and ContractsSales and Services of Auxiliary Enterprises (Note 13)Sales and Services of Educational DepartmentsSales and Services of Component UnitsHospital RevenuesGifts and Donations -Component UnitsRoyalties and Licensing Fees -Component UnitsInterest on Loans and Notes ReceivableOther Operating RevenuesTotal Operating RevenuesOPERATING EXPENSESEmployee Compensation and BenefitsServices and SuppliesUtilities and CommunicationsScholarships, Fellowships and Waivers, NetDepreciationSelf-Insured Claims and Expenses (Note 16)Total Operating Expenses (Note 18)Operating Income (Loss)NONOPERATING REVENUES (EXPENSES)Noncapital State AppropriationsFederal and State Student Financial AidNoncapital Grants, Contracts, and GiftsInvestment IncomeNet Increase (Decrease) in the Fair Value of InvestmentsInvestment ExpensesOther Nonoperating RevenuesGain (Loss) on Disposal of Capital AssetsInterest on Capital Asset-Related DebtOther Nonoperating ExpensesNet Nonoperating Revenues (Expenses)Income (Loss) Before Other Revenues, Expenses, Gains, or LossesCapital State AppropriationsCapital Grants, Contracts, Donations, and Student FeesAdditions to Permanent EndowmentsTotal Other Revenues, Expenses, Gains, or LossesIncrease (Decrease) in Net PositionNet Position, Beginning of YearAdjustment to Beginning Net Position (Note 2)Adjusted Net Position, Beginning of Year, as RestatedNet Position, End of Year2013-14$ 508,448(149,793)358,655366,31544,638704,749129,94252,0121,178................. ........ 2,3 8 .11,659,8701,724,914472,50762,76178,418123,114(5,784)Z455,930(796,060)605,890116,99482,04137,47432,524(3,598)422(2,699)(8,048)(6,483)854,51758,45743,66717,70761,374119,8312,358,9612,3M8,9612012-13$ 500,508(148,064)352,444391,53644,783643,612131,35051,555976....................... ...... 5.. 4..512 41,618,1901,619,868460,77664,74882,024121,356(2,183)2,346,589(727,809)485,479114,09484,09121,8504,304(2,566)(3,898)(6,134)(10,128)687,092(40,717)9,46413,92223,386(17,331)2,3862922,386,292CDirect-SupportOrganizations C$ $s108,566102,59829,9588,5.. .......... ... ..249,7731,512305,0499,944316,505(66,732)6,912202,79212,736(793)48,5101,219(2,349)(42,262)226,765160,03331,58331,583191,6161,980,03011,981,M0omponent UnitsHealth Science Shands HospitalCenter Affiliates and Others663,083..................... .-.. _.... o .. .........739,08679,505178,9707,803266278472,808583(412)(876)31,655(655)(490,544)(460,249)12,55912,559158,873(357)158,5161,695,98844,868......11 .... ...... .44 es .1,740,856793,749754,54877,2201,625,517115,3397,05037,5873,452(7,586)4,858(2,047)(20,372)(68,803)(45,861)69,47869,4781,036,2341,036,234$ 2,488,792 $ 2,368,961 $ 2,171,646 $ 171,075 $ 1,105,712The accompanying notes are an integral part of these financial statements.20 1 University of Florida 2013-2014 Annual Financial ReportUniv2013-14CASH FLOWS FROM OPERATING ACTIVITIESTuition and Fees, Net $ 361,659Grants and Contracts 1,113,838Sales and Services of Auxiliary Enterprises 130,706Sales and Services of Educational Departments 51,328Repayment of Loans and Notes Receivable from Students 5,667Interest on Loans Receivable 1,158Other Operating Receipts 2,247Payments to Employees (1,666,456)Payments to Suppliers for Goods and Services (543,917)Payments to Students for Scholarships and Fellowships (78,418)Loans Issued to Students (6,234)Payments on Self-Insured Claims and Expenses (4,562)Net Cash Used by Operating Activities (632,984)CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIESNoncapital State Appropriations 605,890Federal and State Financial Aid 116,994Noncapital Grants, Contracts, and Gifts 82,041Direct Loan Program Receipts 249,032Direct Loan Program Disbursements (249,035)Net Change in Funds Held for Others (31,147)Other Nonoperating Receipts 422Other Nonoperating Disbursements (4,242)Net Cash Provided by Noncapital Financing Activities 769,955CASH FLOWS FROM CAPITAL AND RELATED FNANCING ACTIVITIESProceeds from Capital Debt 76,647Capital State Appropriations 12,485Capital Grants, Contracts, Donations, and Student Fees 15,711Proceeds from Sales of Capital Assets 532Other Receipts for Capital ProjectsPurchase or Construction of Capital Assets (145,059)Principal Paid on Capital Debt and Leases (10,595)Interest Paid on Capital Debt and Leases (8,048)Net Cash Used by Capital and Related Financing Activities (58,327)CASH FLOWS FROM INVESTING ACTIVITIESSale of Investments 1,688,033Purchase of Investments (1,799,918)Investment Income 33,101Net Cash Used by Investing Activities (78,784)Net Decrease in Cash and Cash Equivalents (140)Cash and Cash Equivalents, Beginning of Year 306Cash and Cash Equivalents, End of Year $ 166RECONCILATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIESOperating Loss $ (796,060)Adjustments to Reconcile Operating Loss to NetCash Used by Operating Activities:Depreciation Expense 123,114Change in Assets and Liabilities:Receivables, Net (5,607)Due From Component Units 1,365Inventories (120)Other Assets (145)Accounts Payable (8,387)Salaries and Wages Payable 5,041Unearned Revenue 4,106Deposits Held in Custody 636Other Postemployment Benefits Payable 40,915Compensated Absences Payable 12,503Liability for Self-Insured Claims (10,345)NET CASH USED BY OPERATING ACTIVITIES $ (632,984)SUPPLEMENTAL DISCLOSURE OF NONCASH OPERATING, INVESTING, AND CAPITAL AND RELATED FINANCING ACTIVITIESersity of Florida2012-13$ 355,1961,082,254138,64051,5387,7551,2093,073(1,567,072)(523,864)(82,024)(6,305)............ (1.7,397)(556,997)485,479114,09484,091253,278(253,275)58,500948734,2815,00026,2049,54835817(139,187)(8,436)..... (6,14.......). ......(112,630)1,564,849(1,650,132)20,416(64,867)(213)519$ 306$ (727,809)121,35654,879(13,183)110(68)1,617(106)(145)13637,31715,584(46,685)$ (556,997)The following items are recognized on the Statement of Net Position or the Statement of Revenues, Expenses and Changes in Net Position, but are not cashtransactions for the Statement of Cash Flows:Unrealized gains on investments $ 32,524Acquisition of equipment under installment purchase agreements $ (2,920)Loss on disposal of capital assets $ (2,699)The accompanying notes are an integralpart of these financial statements. A Component Unit of the State of Florida 1 21 NOTES TO THE FINANCIAL STATEMENTSFor the Fiscal Year Ended June 30,2014ASummary Of SignificantAccounting PoliciesThe significant accounting policies followed by the Universityof Florida are described below to enhance the usefulness ofthe financial statements.A. REPOPTING ENTITYThe University of Florida is a separate public instrumentalitythat is part of the State university system of public universities,which is under the general direction and control of the FloridaBoard of Governors. The University is directly governed by aBoard of Trustees (Trustees) consisting of thirteen members.The Governor appoints six citizen members and the FloridaBoard of Governors appoints five citizen members. Thesemembers are confirmed by the Florida Senate and servestaggered terms of five years. The chair of the faculty senateand the president of the student body of the University arealso members. The Florida Board of Governors establishes thepowers and duties of the Trustees.The Trustees are responsible for setting policies for theUniversity, which provide governance in accordance withState law and Florida Board of Governors' Regulations. TheTrustees select the University President. The UniversityPresident serves as the executive officer and the corporatesecretary of the Trustees, and is responsible for administeringthe policies prescribed by the Trustees.Criteria for defining the reporting entity are identified anddescribed in the Governmental Accounting StandardsBoard's (GASB) Codification of Governmental Accountingand Financial Reporting Standards, Sections 2100 and2600. These criteria were used to evaluate potentialcomponent units for which the primary government isfinancially accountable and other organizations for whichthe nature and significance of their relationship with theprimary government are such that exclusion would cause theprimary government's financial statements to be misleadingor incomplete. Based on the application of these criteria,the University of Florida is a component unit of the State ofFlorida, and its financial balances and activities are reportedin the State's Comprehensive Annual Financial Report bydiscrete presentation.22 1 University of Florida 2013-2014 Annual Financial ReportB. BLENDED COMPONENT UNITSBased on the application of the criteria for determiningcomponent units, the University of Florida Self-InsuranceProgram (the Program), and the University of Florida HealthcareEducation Insurance Company (HEIC), are included withinthe University reporting entity as blended component units.Although legally separate from the University of Florida, theProgram's and the HEIC's sole purpose is to assist in providingliability protection for the University and its affiliated individualsand entities, and are therefore reported as if they are part of theUniversity. The Program was created by the Florida Board ofGovernors, pursuant to Section 1004.24, Florida Statutes. TheHEIC was created on September 1, 1994, as a self-insurancemechanism created pursuant to Section 1004.24, FloridaStatutes. Annual audits of the Program's and HEIC's financialstatements are conducted by independent certified publicaccountants. See Notes 16 and 19 for more details.C. DISCRETELY PRESENTEDCOMPONENT UNITSBased on the application of the criteria for determiningcomponent units, certain affiliated organizations are requiredto be included within the University reporting entity asdiscretely presented component units because of thesignificance of their relationship with the University. Theseorganizations are legally separate from the Universityand are governed by separate boards. The Universityfurther categorizes its component units as Direct-SupportOrganizations, Health Science Center Affiliates, and ShandsHospital and Others. An annual audit of each organization'sfinancial statements is conducted by independent certifiedpublic accountants. The annual reports are submitted tothe Auditor General and the University Board of Trustees.Additional information on the University's discretelypresented component units, including copies of audit reports,is available by contacting the Office of University Relations.Condensed financial statements for the University's discretelypresented component units are shown in Note 19.However, financial activities of certain component units arenot included in the University's financial statements andare denoted below with an asterisk (*). The total assets andoperating revenues related to these component units are $43million and $23 million, respectively. These amounts representless than one percent of the total aggregate component units'assets and operating revenues.D. DIRECT-SUPPORT ORGANIZATIONSThe University's direct-support organizations, as provided forin Section 1004.28, Florida Statutes, and Board of Governors'Regulation 9.011, are considered component units of theUniversity of Florida and therefore the latest audited financialstatements of these organizations are included in the financialstatements of the University by discrete presentation. Theselegally separate, not-for-profit corporations are organizedand operated exclusively to assist the University to achieveexcellence by providing supplemental resources from privategifts and bequests, and valuable education support services.The Statute authorizes these organizations to receive, hold,invest, and administer property and to make expenditures toor for the benefit of the University. These organizations andtheir purposes are explained as follows:University of Florida Foundation, Inc., solicits, collects,manages, and directs contributions to the various academicdepartments and programs of the University, and assists theUniversity in fund raising, public relations, and maintenance ofalumni records. Their financial statements include the activitiesof the University of Florida Alumni Association, Inc.The University Athletic Association, Inc., conducts variousinter-collegiate athletic programs for and on behalf of theUniversity.University of Florida Research Foundation, Inc., promotes,encourages, and assists research activities of the Universitythrough income derived from or related to the developmentand commercialization of intellectual properties, which includeinventions, discoveries, processes, and work products.GatorCare Health Management Corporation coordinatesand facilitates the management of the self-insured healthinsurance plan of the University and its participating affiliatedemployers, collecting and paying employer and employeepremiums.Gator Boosters, Inc., supports athletic activities at theUniversity.University of Florida Development Corporation developsand maintains Innovation Square where the University-ownedFlorida Innovation Hub is located.Citrus Research and Development Foundation, Inc., wasformed to advance disease and production research andproduct development activities to ensure the survival andcompetitiveness of Florida's citrus growers through innovation.University of Florida Alumni Association, Inc., supportsactivities of the alumni of the University of Florida. Its financialtransactions are reflected in the financial statements of theUniversity of Florida Foundation, Inc.Florida Foundation Seed Producers, Inc.,* supplies Floridafarmers and producers with crop seed and nursery stock.This organization stocks foundation seed of the best-knownvarieties acceptable to Florida climate and soils in adequatequantities and at reasonable prices.The University of Florida Law Center Association, Inc.,*supports the Levin College of Law.Florida 4-H Club Foundation, Inc.,* promotes the educationalobjectives of the 4-H Youth Development Program, an officialpart of the Florida Cooperative Extension Service.A Component Unit of the State of Florida 1 23 NotesUniversity of Florida Leadership and Education Foundation,Inc.,* was formed to further agriculture and natural resourceeducation and related activities, promote agriculture andnatural resources leadership, and make contributions to andconfer benefits upon the University.University of Florida Investment Corporation* promotes theeducational purposes of the University of Florida by providinginvestment research, advice, counsel, and managementto and for the University Board of Trustees and affiliatedorganizations of the University.Citrus Research and Education Foundation, Inc.,* expeditescitrus production, propagates new plant materials, collectsand analyzes environmental impact research data, andprovides research and education support to the University ofFlorida Citrus Research and Education Center at Lake Alfred.Treasure Coast Agricultural Research Foundation, Inc.,*supports, encourages, and fosters research, education, andextension at the Institute of Food and Agricultural Sciencesof the University on issues related to the citrus industry withinthe Indian River region.UF Historic St. Augustine, Inc.,* ensures the long-termpreservation and interpretation of State-owned historicproperties in St. Augustine.Southwest Florida Research and Education Foundation, Inc.,*provides research and educational support to the Universityof Florida Southwest Florida Research and Education Center.E. HEALTH SCIENCE CENTER AFFILIATESSeveral corporations closely affiliated with the Universityof Florida J. Hillis Miller Health Science Center (JHMHC) areconsidered to be component units of the University of Florida.These corporations are as follows:* Florida Clinical Practice Association, Inc.* University of Florida Jacksonville Physicians, Inc.* Florida Veterinary Medicine Faculty Association, Inc.University of Florida Jacksonville Healthcare, Inc.Faculty Associates, Inc.* Faculty Clinic, Inc.** University of Florida College of Nursing FacultyPractice Association, Inc.** Florida Health Professions Association, Inc.** University of Florida College of Pharmacy FacultyPractice Association, Inc.*The corporations listed above, except University of FloridaJacksonville Healthcare, Inc., and Faculty Clinic, Inc.,are Faculty Practice Plans, as provided for in Board ofGovernors' Regulation 9.017 The Faculty Practice Plansprovide educationally-oriented clinical practice settings andopportunities through which faculty members provide health,medical, and dental care to patients as an integral part oftheir academic activities and their employment as faculty.Because these faculty practice activities generate income,the colleges are authorized to regulate fees generated fromfaculty practice and maintain Faculty Practice Plans for theorderly collection and distribution of fees. These organizationsprovide significant support for the clinical instruction functionof the JHMHC.University of Florida Jacksonville Healthcare, Inc., a HealthServices Support Organization, as provided for in Boardof Governors' Regulation 9.011, engages in strategicalliances and partnerships with non-academic entities,effecting managed care contracting and provider networkdevelopment for the JHMHC. Faculty Clinic, Inc., wasoriginally organized to operate a multi-specialty clinic.However, effective January 1, 1995, Faculty Clinic, Inc., wasrestructured to operate as a facilities management company.F. SHANDS HOSPITAL AND OTHERSShands Teaching Hospital and Clinics, Inc. (Shands),was incorporated October 15, 1979, as a not-for-profit corporation. Shands, a major tertiary careteaching institution, is a leading referral center in theState of Florida and the southeast United States andfacilitates medical education programs at the University.Shands entered into a contractual agreement, as of July 1,1980, as subsequently restated and amended, with the FloridaBoard of Education, to provide for the use of hospital facilitiesat the JHMHC through December 31, 2030, with renewalprovisions. The contractual agreement also provides for thetransfer to Shands of all other assets and liabilities arising fromthe operation of the hospital facilities prior to July 1, 1980. Attermination of the contractual agreement, the net position ofShands reverts to the State Board of Education. Legal title toall buildings and improvements transferred to Shands remainswith the State of Florida during the term of the contractualagreement. The contractual agreement provides for a12-month grace period for any event of default, other than thebankruptcy of Shands. In addition, the contractual agreementlimits the right of the State Board of Education to terminatethe contractual agreement solely to the circumstance in whichShands declares bankruptcy and, in such event, requires netrevenues derived from the operation of the hospital facilitiesto continue to be applied to the payment of Shands' debts.Under the terms of the contractual agreement, Shands isobligated to manage, operate, maintain, and insure thehospital facilities in support of the programs of the JHMHCand further agrees to contract with the State Board ofEducation for the provision of these programs. By operationof law, the University of Florida Board of Trustees has becomethe successor-in-interest to the State Board of Education.24 1 University of Florida 2013-2014 Annual Financial ReportShands Jacksonville HealthCare, Inc. (Shands Jacksonville),is a Florida not-for-profit corporation. Shands Jacksonvillewas organized primarily to provide healthcare and relatedservices to the community including the City of Jacksonvilleand surrounding counties, and to support the teaching andresearch missions of the University.University Village Apartments, Inc. (the Corporation), wasestablished in 1969, for the purpose of providing housing forlow- and moderate-income families, especially those affiliatedwith the University of Florida. Capital was contributed atinception by the University of Florida Foundation, Inc., but nocapital stock was issued because the Corporation does notoperate for the benefit of any special interest. The Corporationprovided housing under Section 221(d)(3) of the NationalHousing Act. The facility consists of 28 two-story buildingsand was regulated by the United States Department ofHousing and Urban Development (HUD) as to rent charges andoperating methods. The Corporation is no longer regulatedby HUD since it has repaid in full its Section 221 insured loan.The Corporation is in the process of dissolving and merginginto the University Department of Housing and ResidenceEducation. All transactions during the 2013-14 fiscal year areincluded in the University's financial statements.G. BASIS OF PRESENTATIONThe University's accounting policies conform with accountingprinciples generally accepted in the United States of Americaapplicable to public colleges and universities as prescribedby GASB. The National Association of College and UniversityBusiness Officers (NACUBO) also provides the University withrecommendations prescribed in accordance with generallyaccepted accounting principles promulgated by GASB and theFinancial Accounting Standards Board (FASB). GASB allowspublic universities various reporting options. The Universityof Florida has elected to report as an entity engaged in onlybusiness-type activities. This election requires the adoptionof the accrual basis of accounting and entity-wide reportingincluding the following components:* Management's Discussion and Analysis* Basic Financial Statements:1) Statement of Net Position2) Statement of Revenues, Expenses,and Changes in Net Position3) Statement of Cash Flows4) Notes to the Financial Statements* Other Required Supplementary InformationH. BASIS OF ACCOUNTINGBasis of accounting refers to when revenues, expenses, andrelated assets, deferred outflows of resources, liabilities, anddeferred inflows of resources are recognized in the accountsand reported in the financial statements. Specifically, itrelates to the timing of the measurements made, regardlessof the measurement focus applied. The University's financialstatements are presented using the economic resourcesmeasurement focus and the accrual basis of accounting.Revenues, expenses, gains, losses, assets, deferred outflowsof resources, liabilities, and deferred inflows of resourcesresulting from exchange and exchange-like transactionsare recognized when the exchange takes place. Revenues,expenses, gains, losses, assets, deferred outflows ofresources, liabilities, and deferred inflows of resourcesresulting from nonexchange activities are generally recognizedwhen all applicable eligibility requirements, including timerequirements, are met. The University follows GASB standardsof accounting and financial reporting.The University's blended and discretely presented componentunits use the economic resources measurement focus andaccrual basis of accounting whereby revenues are recognizedwhen earned and expenses are recognized when incurred.Twenty-three component units follow GASB standards ofaccounting and financial reporting. Eight component units(University of Florida Foundation, Inc., Florida Foundation SeedProducers, Inc., Southwest Florida Research and EducationFoundation, Inc., Citrus Research and Education Foundation,Inc., Citrus Research and Development Foundation, Inc.,Treasure Coast Agricultural Research Foundation, Inc.,University of Florida Alumni Association, Inc., and Universityof Florida Investment Corporation) follow FASB standardsof accounting and financial reporting for not-for-profitorganizations.Significant interdepartmental sales between auxiliary servicedepartments and other institutional departments have beenaccounted for as reductions of expenses and not revenues ofthose departments.The University's principal operating activities consist ofinstruction, research and public service. Operating revenuesand expenses generally include all fiscal transactions directlyrelated to these activities as well as administration, operationand maintenance of capital assets, and depreciation oncapital assets. Nonoperating revenues include NoncapitalState Appropriations, Federal and State student financialaid, investment income and Capital State Appropriations forconstruction projects. Interest on capital asset-related debt isa nonoperating expense.The Statement of Net Position is presented in a classifiedformat to distinguish between current and noncurrent assetsand liabilities. When both restricted and unrestricted resourcesare available to fund certain programs, it is the University'spolicy to first apply the restricted resources to such programs,followed by the use of the unrestricted resources.The Statement of Revenues, Expenses, and Changes in NetPosition is presented by major sources and is reported netof tuition scholarships, discounts, and allowances. Tuitionscholarships, discounts, and allowances are the differencesA Component Unit of the State of Florida 1 25 Notesbetween the stated charge for goods and services providedby the University and the amount that is actually paid by astudent or a third party making payment on behalf of thestudent. The University applied "The Alternate Method"as prescribed in NACUBO Advisory Report 2000-05 todetermine the reported net tuition scholarships, discounts,and allowances. Under this method, the University computesthese amounts by allocating the cash payments to students,excluding payments for services, on a ratio of total aid to theaid not considered to be third-party aid.The Statement of Cash Flows is presented using the directmethod in compliance with GASB Statement No. 9, ReportingCash Flows of Proprietary and Nonexpendable Trust Funds andGovernmental Entities That Use Proprietary Fund Accounting.I. CASH AND CASH EQUIVALENTSThe amount reported by the University as cash and cashequivalents consists of cash on hand and cash in demandaccounts. University cash deposits are held in banks qualifiedas public depositories under Florida law. All such depositsare insured by Federal depository insurance, up to specifiedlimits, or collateralized with securities held in Florida's multiplefinancial institution collateral pool required by Chapter 280,Florida Statutes. Cash and cash equivalents that are externallyrestricted to make debt service payments, maintain sinkingor reserve funds, or to purchase or construct capital assetsor other restricted assets, are classified as restricted. TheUniversity considers cash balances in overnight sweep accountsto be investments, as permitted by GASB Statement No. 9.J. CAPITAL ASSETSUniversity capital assets consist of land, construction inprogress, buildings, infrastructure and other improvements,furniture and equipment, library resources, property undercapital lease and leasehold improvements, works of artand historical treasures, computer software, and othercapital assets. These assets are capitalized and recordedat cost at the date of acquisition or at estimated fair valueon the date received in the case of gifts and purchasesof State surplus property. Additions, improvements, andother outlays that significantly extend the useful life of anasset are capitalized. Other costs incurred for repairs andmaintenance are expensed as incurred. The University hasa capitalization threshold of S4 million for intangible assets,which includes computer software, and 35,000 for tangiblepersonal property. The costs of all new buildings and projectsadding new square footage are capitalized. Infrastructureand leasehold improvements have a S250,000 capitalizationthreshold. For building renovations, the threshold is $250,000or less if the amount expended is at least 25% of the cost basisof the building. Depreciation is computed on the straight-linebasis over the following estimated useful lives:* Buildings -5 to 50 years, depending on constructionInfrastructure and Other Improvements -10 to 50 yearsFurniture and Equipment -3 to 20 yearsLibrary Resources -10 years* Property Under Capital Lease and LeaseholdImprovements -10 to 50 years* Computer Software -5 yearsK. NONCURRENT LIABILITIESNoncurrent liabilities include principal amounts of capitalimprovement debt payable, loans and notes payable,installment purchase agreements payable, capitalleases payable, compensated absences payable, otherpostemployment benefits payable, liability for self-insuredclaims, and other noncurrent liabilities that are not scheduledto be paid within the next fiscal year. Capital improvementdebt payable is reported net of unamortized premiums,discounts, and losses on refunding. The University amortizesdebt premiums and discounts over the life of the debt usingthe straight-line method. Losses on refundings are amortizedover the life of the old debt or new debt (whichever is shorter)using the straight-line method.L. OTHER SIGNIFICANT ACCOUNTING POLICIESOther significant accounting policies are set forth in thefinancial statements and subsequent notes hereafter.Adjustments 71 Beg-inning Net~SPoisito Component UnitsTable 1 summarizes the Adjustments to Beginning NetPosition reported in the Statement of Revenues, Expenses,and Changes in Net Position to reflect prior year accountingchanges of the University's discretely presented componentunits.Health ScienceDescription Center AffiliatesFlorida Clinical Practice Association, Inc. -Write-offbond issuance costs per GASB 65 implementationUniversity of Florida Jacksonville Physicians, Inc.-Write-off bond issuance costs per GASB 65implementationTotal Adjustments to Beginning Net PositionS. (281,880)(75,143)$ (357,023)26 1 University of Florida 2013-2014 Annual Financial ReportInvestmentsSection 1011.42(5), Florida Statutes, authorizes universitiesto invest funds with the State Treasury and State Board ofAdministration (SBA), and requires that universities complywith the statutory requirements governing investment ofpublic funds by local governments. Accordingly, universitiesare subject to the requirements of Chapter 218, Part IV,Florida Statutes. The University's Board of Trustees hasadopted a written investment policy providing that surplusfunds of the University shall be invested in those institutionsand instruments permitted under the provisions of FloridaStatutes. Pursuant to Section 218.415(16), Florida Statutes,the University is authorized to invest in the Florida PRIMEinvestment pool administered by the SBA; interest-bearingtime deposits and savings accounts in qualified publicdepositories, as defined in Section 280.02, Florida Statutes;direct obligations of the United States Treasury; obligationsof Federal agencies and instrumentalities; securities of, orinterests in, certain open-end or closed-end managementtype investment companies; Securities and ExchangeCommission registered money market funds with the highestcredit quality rating from a nationally recognized ratingagency; and other investments approved by the University'sBoard of Trustees, as authorized by law. Investments set asideto make debt service payments, maintain sinking or reservefunds, or to purchase or construct capital assets are classifiedas restricted. Investments of the University and its componentunits at June 30, 2014, are reported at fair value and shown inTables 2 and 3.I el-itTypes of InvestmentsExternal Investments Pools:State Treasury Special Purpose Investment AccountState Board of Administration Florida PRIMEInvestment PoolUnited States Government andFederally-Guaranteed ObligationsBonds and NotesInvestment AgreementsReal Estate AgreementsStocksMoney Market FundsEquity Mutual FundsBond Mutual FundsCommercial PaperTotal Component Unit InvestmentsFair Value$ 215,454,72576,8362,900,382.18,008,5662,114,594,4128,255,259802,40240,137,63461,268,79687,344,97519,046,000$ 2,567,889,987Types of InvestmentsExternal Investments Pool:State Treasury Special Purpose Investment Account $State Board of Administration Debt Service AccountRepurchase AgreementsStocksCertificates of DepositInvestment AgreementsEquity Mutual FundsBond Mutual FundsFair Value665,870,0467,750,49321,064,206516750,000458,646,45161,290,94398,158,648A. EXTEPNAL INVESTMENT POOLSThe University and its discretely presented componentunits (see Note 1) reported investments at fair value totalingS665,870,046 and $215,454,725, respectively, at June 30,2014, in the State Treasury Special Purpose InvestmentAccount (SPIA) investment pool, representing ownership ofa share of the pool, not the underlying securities. The SPIAcarried a credit rating of A+f by Standard & Poor's, an effectiveduration of 2.57 years, and a fair value factor of 1.0074 at June30, 2014. The University relies on policies developed by theState Treasury for managing interest rate risk or credit riskfor this investment pool. Disclosures for the State Treasuryinvestment pool are included in the notes to the financialstatements of the State's Comprehensive Annual FinancialReport.At June 30, 2014, the University's component units reportedinvestments totaling S76,836 in the Florida PRIME investmentpool, administered by the SBA pursuant to Section 218.405,Florida Statutes. The investments in the Florida PRIMEinvestment pool, which the SBA indicates is a Securities andExchange Commission Rule 2a7-like external investmentpool, at June 30, 2014, are similar to money market funds inwhich shares are owned in the fund rather than the underlyinginvestments. The Florida PRIME investment pool carrieda credit rating of AAAm by Standard & Poor's and had aweighted-average days to maturity (WAM) of 40 days as ofJune 30,2014. A portfolio's WAM reflects the average maturityin days, based on final maturity or reset date, in the case offloating rate instruments. WAM measures the sensitivity ofthe Florida PRIME investment pool to interest rate changes.The investments in the Florida PRIME investment pool arereported at fair value, which is amortized cost.Total University Investments$ 1,313,531,303A Component Unit of the State of Florida 1 27 NotesB. STATE BOAPD OF ADMINISTPATION DEBTSERVICE ACCOUNTSThe University reported investments at fair value totaling$7,750,493 at June 30,2014, in the SBA Debt Service Accounts.These investments are used to make debt service paymentson bonds issued by the State Board of Education for thebenefit of the University. The University's investments consistof United States Treasury securities, with maturity dates ofsix months or less. The University relies on policies developedby the SBA for managing interest rate risk and credit risk forthese accounts. Disclosures for the Debt Service Accounts areincluded in the notes to the financial statements of the State'sComprehensive Annual Financial Report.C. OTHER INVESTMENTSIn addition to external investment pools, the University and itsdiscretely presented component units invested in various debtand equity securities, money market funds, mutual funds,and certificates of deposit. For the University, the majority ofthe other investments are those reported by the Universityof Florida Self-Insurance Program, and the University ofFlorida Healthcare Education Insurance Company, blendedcomponent units (see Note 1), plus amounts managed by theUniversity of Florida Investment Corporation for the Universityof Florida. Forthe University's discretely presented componentunits, other investments are those reported primarily by theUniversity of Florida Foundation, Inc., The University AthleticAssociation, Inc., University of Florida Research Foundation,Inc., Florida Clinical Practice Association, Inc., ShandsTeaching Hospital and Clinics, Inc., and Shands JacksonvilleHealthCare, Inc. The following risks apply to the University'sand its discretely presented component units' investmentsother than external investment pools:Interest Rate Risk: Interest rate risk is the risk that changesin interest rates will adversely affect the fair value of aninvestment. Pursuant to Section 218.415(16), Florida Statutes,the University's investments in securities must providesufficient liquidity to pay obligations as they come due. Perthe Statement of Investment Guidelines and Objectives ofthe University of Florida Healthcare Education InsuranceCompany, the weighted-average duration of the fixed incomeportfolio shall at all times be less than five years. Investmentsof the University and its discretely presented component units(excluding those reporting under FASB standards) in debtsecurities and bond mutual funds, and their future maturitiesat June 30, 2014, are shown in Tables 4 and 5, respectively.Investment Maturities (in Years)Types of InvestmentsBond Mutual FundsFair Value$ 98,158,648 $Less than 1.. : 1-56-10More than 10$ 98,158,648 $-$* .27. 7~ :N I~uJInvestment Maturities (in Years)STypes Of InvestmentsUnited States Government andFederally-Guaranteed ObligationsBonds and NotesBond Mutual FundsTotal Component UnitsFair Value$ 2,640,00017,874,11374,900,532$ 95,414,645Less than 1$1,000,83610,607,839$ 11,608,6751-56-10$. 2,640,000 $ -15,874,464 998,8136,171,693 58,121,000$ 24,686,157 $ 59,119,13More than 10$$-.~-.qLess than A/Baor Not RatedTypes of InvestmentsBond Mutual FundsFair Value AAAIAaa AA/Aa................... I... $ i_, -.... ................ .... .................9 1 ,.... ...50 0 7 , 1$ 98,158,648" $ 11,760,512 ".$ "50,047,115A/Ba$ 30,340,93 $ 6,010,92828 1 University of Florida 2013-2014 Annual Financial ReportV.. .iLTypes of InvestmentsBonds and NotesBond Mutual FundsTotal Component UnitsFair Value$ 17,874,11374,900,532$ AAA/Aaa$ 3,859,082$ 3,859,092AA/AaA/Ba$ 6,981,872 $ 4,039,9672,570,839 -$ 9,552,711 $ 4,039,967Less than A/Baor Not Rated$ 2,993,19272,329,693$ 75,322,885Credit Risk: Credit risk is the risk that an issuer or othercounterparty to an investment will not fulfill its obligations.Obligations of the United States Government or obligationsexplicitly guaranteed by the United States Governmentare not considered to have credit risk and do not requiredisclosure of credit quality. At June 30, 2014, the Universityand its discretely presented component units (excludingthose reporting under FASB standards) had bonds and notes,and bond mutual funds, with quality ratings by nationallyrecognized rating agencies (e.g., Moody's Investors Service),as shown in Tables 6 and 7, respectively.Custodial Credit Risk: Custodial credit risk is the risk that inthe event of the failure of the counterparty to a transaction,the University will not be able to recover the value of itsinvestments or collateral securities that are in the possessionof an outside party. Exposure to custodial credit risk relatesto investment securities that are held by someone otherthan the University and are not registered in the University'sname. The University has no formal policy on custodial creditrisk. The component units manage their custodial credit riskbased on various investment policies, which may be obtainedseparately from the component units.Concentration of Credit Risk: Concentration of creditrisk is the risk of loss attributed to the magnitude of theUniversity's investments in a single issuer. The Universityhas no formal policy on concentration of credit risk.The component units manage their concentration ofcredit risk based on various investment policies, whichmay be obtained separately from the component units.Recei'vablesA. ACCOUNTS RECEIVABLEAccounts receivable represent amounts for grant andcontract reimbursements due from third parties, various salesand services provided to students and third parties, studenttuition and fees, and interest accrued on investments andloans receivable. Accounts receivable, net of an allowancefor uncollectible accounts, reported as of June 30, 2014, aresummarized in Table 8.'I f, $6 0- 'ýtý 4 ;;- 4 ADescriptionGrants and ContractsSales and Services of Auxiliary EnterprisesStudent Tuition and FeesSales and Services of Educational DepartmentsInterestTotal Accounts Receivable, NatAmount$ 77,098,9117,785,5857,401,3562,693,6901,650,434$ 96,629,976B. LOANS AND NOTES RECEIVABLELoans and notes receivable represent all amounts owedon promissory notes from debtors, including student loansmade under the Federal Perkins Loan Program and other loanprograms.C. ALLOWANCES FOR UNCOLLECTIBLERECEIVABLESAllowances for uncollectible accounts, and loans and notesreceivable, are reported based upon management's bestestimate as of fiscal year-end, considering type, age, collectionhistory, and other factors considered appropriate. Accountsreceivable for student tuition and fees, various sales andservices provided to students and third parties, and interest arereported net of an allowance of $6,474,327, which is 24.9% oftotal related accounts receivable. Loans and notes receivableare reported net of an allowance of $4,273,148 which is 9.7%of total related loans and notes receivable. No allowancehas been accrued for grants and contracts receivable.University management considers these to be fully collectible.DUe From StateThis amount consists of S45,976,604 of Public EducationCapital Outlay due from the State to the University forconstruction of University facilities.A Component Unit of the State of Florida 29 NotesDue From And To ComponentU ~/Ui v~~Uifts/ nivoersityThe University's financial statements are reported for thefiscal year ended June 30, 2014. The University's discretelypresented component units' financial statements are reportedfor the most recent fiscal year for which an audit report isavailable. Some component units are not presented (seeNote 1). Additionally, component units' due from and due toamounts include receivables and payables between the variouscomponent unit columns. Accordingly, amounts reportedby the University as due from and to component units onthe Statement of Net Position may not agree with amountsreported by the component units as due from and to theUniversity.InventoriesDepartmental Inventories -Those inventories maintainedby departments and not available for resale. Departmentalinventories are comprised of such items as classroom andlaboratory supplies, teaching materials, and office supplyitems, which are consumed in the teaching and work process.These inventories are normally expensed when purchased andtherefore are not reported on the Statement of Net Position.Merchandise Inventories -Those inventories maintainedwhich are available for resale to individuals and otherUniversity departments, and are not expensed at the time ofpurchase. These inventories are reported on the Statement ofNet Position and are valued at cost using either the movingaverage method or the first-in, first-out method.: Capital AssetsCapital assets activity for the fiscal year ended June 30, 2014,is presented in Table 9.Inventories have been categorized into the following twotypes:........ jDescriptionNondepreciable Capital Assets:LandConstruction in ProgressWorks of Art and Historical TreasuresBeginningBalance$ 10,841,23638,219,651.4,011,28453,072,171AdditionsReductionsEndingBalance$. 1,400,000108,923,437129,060110,452,497$ 962,637 $ 11,278,59916,701,755 130,441,3334,140,34417,664,392 145,860276Total Nondepreciable Capital AssetsDepreciable Capital Assets:BuildingsInfrastructure and Other ImprovementsFurniture and Equipment.Library ResourcesProperty Under Capital Lease and Leasehold ImprovementsWorks of Art and Historical TreasuresComputer SoftwareOther Capital AssetsTotal Depreciable Capital AssetsLess Accumulated Depreciation:BuildingsInfrastructure and Other ImprovementsFurniture and EquipmentLibrary ResourcesProperty Under Capital Lease and Leasehold ImprovementsWorks of Art and Historical Treasures,Computer SoftwareOther Capital AssetsTotal Accumulated DepreciationTotal Depreciable Capital Assets, NetTotal Capital Assets, Net2,284,054,228108,260,867534,362,432314,817,4339,815,002419,69524,533,0009,5003,276,272,1579,630,7344,893,65537,515,0408,875,8672,325,63613,20045,61063,299,742944,552,42562,177,410349,233,846258,372,9113,863,574268,73624,533,0004,1171,643,006,0191,633,266,138$ 1,686,,30971,721,4013,941,22535,620,523* :11,414,070385,12624,9916,961123,114,297........ ......... .2 ..........(59,814,555)$ 50,637,9421,597,861235,47621,177,9651,935,77024,947,0721,155,462235,47617,060,0781,935,77013,40020,400,186....... ....... .......... .. .. = ... .I..4,546,986$ 22,11272,292,087,101112,919,046550,699,507321,757,53012,140,638432,89524,533,00055,1103,314,624,8271,015,118,36465,883,159367,794,291267,851,2114,248,700280,32724,533,00011,0781,745,720,1301,568,904,697$ 1,714,764,97330 1 University of Florida 2013-2014 Annual Financial ReportMuseum, And ArtThe Florida Museum of Natural History, which is part of theUniversity, maintains a depository of biological, geological,archaeological, and ethnographic materials. The Museum'scollections contain approximately 32 million specimens,more than half of which are catalogued, either individually orin lots. While many of the collections are undoubtedly quitevaluable and irreplaceable, the University has not placed adollar value on these items and, accordingly, the financialstatements do not include these assets.The Samuel P. Harn Museum of Art, which is also part of theUniversity, maintains a collection of over 9,500 works of art.Donations of artwork to the Museum are recorded by theUniversity of Florida Foundation, Inc. (Foundation), and areincluded with reported "Permanent Collections" as furtherexplained in Note 9 of the Foundation's audited financialstatements for the fiscal year ended June30, 2014. Purchasesof artwork by the Museum are included with the University'sreported Nondepreciable Capital Assets as presented inTable 9.UnearnedlRevenuUnearned Revenue includes amounts received prior to theend of the fiscal year but related to subsequent accountingperiods. Unearned Revenue, as of June 30, 2014, issummarized in Table 10.Description AmountGrants and ContractsSales and Services of Auxiliary EnterprisesStudent Tuition and Fees$ 18,841,7206,963,3123,730,503$ 29,535,535Total Unearned RevenueOther Currenit LiabilitiesThe University maintained accounts with a local bank toprocess general operating expenses and payroll transactions.Funds in excess of current need, including float, were invested.As a result, the University's records showed a temporary cashoverdraft for the amount of outstanding checks not presentedas of June 30, 2014. This did not, however, represent anoverdraft in the University's depository accounts.Lng-T rm Liabl' esLong-term liabilities of the University at June 30, 2014,include capital improvement debt payable, loans and notespayable, installment purchase agreements payable, capitalleases payable, compensated absences payable, otherpostemployment benefits payable, liability for self-insuredclaims, and other noncurrent liabilities. Long-term liabilityactivity for the fiscal year ended June 30, 2014, is presentedin Table 11.Am ADescriptionBeginningBalanceCapital Asset-Related Debt:Capital Improvement Debt Payable $ 119,401,170Loans and Notes Payable 5,000,000Installment Purchase Agreements Payable 1,618,078Capital Leases Payable 3,075,763Total Capital Asset-Related Debt 129,095,011Additions$ 71;005,0906,472,5382,919,71580,397,343Reductions$ 8,827,5481,177,907128,78010,134,235EndingBalance$ 181,578,71211,472,5383,359,886....-__2,946,983199,358,119125,950,609180,690,00045,801,53418,481,891$ 570,m153CurrentPortonOther Long-Term Liabilities:Compensated Absences PayableOther Postemployment Benefits PayableLiability for Self-Insured Claims (Note 16)Other Noncurrent Liabilities$ 8,605,000280,4761,262,710137,08610,285,27211,657,8929,195,899$ 31,139,063113,448,325139,775,00056,147,46118,768j20124,145,957 11,643,67348,595,000 7,680,000(5,784,153) 4,561,774286,310Total Long-Term Liabilities$ 457,233,998 $ 147,354,147$ 34,35A.992A Component Unit of the State of Florida 1 31 NotesA. CAPITAL IMPPOVEMENT DEBT PAYABLECapital improvement debt is issued to construct studenthousing facilities, parking garages, and various otherUniversity facilities. The outstanding debt for student housingand parking garages is secured by a pledge of a portion ofhousing rental revenues and parking fees. The outstandingdebt for the Clinical Translational Research Building is securedby a pledge of a portion of indirect costs revenues receivedby the College of Medicine. Pledged revenues are equal tothe remaining debt service requirements to maturity for thecapital improvement debt.On September 10, 2013, the Florida Board of Governors, onbehalf of the University, issued $41,540,000 of Universityof Florida Student Activity Revenue Bonds, Series 2013. Thebonds are repaid from student activity and service fees andthe proceeds are used to renovate and expand the J. WayneReitz Union, the community center of the University. Thebonds will mature in annual increments starting on July 1,2014, and ending on July 1, 2033. Interest payments are duesemiannually on January 1 and July 1 beginning January 1,2014.On November 20, 2013, the Florida Board of Governors, onbehalf of the University, issued $24,805,000 of University ofFlorida Housing Dormitory Revenue Bonds, Series 2013A. Thebonds are repaid from dormitory fees charged to students.$19,600,000 of the proceeds are used to construct a 255-beddormitory with state-of-the-art features complying with theAmericans with Disabilities Act. The remaining $5,205,000 willrefund portions of the Student Housing Auxiliary Debt Bonds,Series 2005A, maturing in years 2016 through 2023. The newbonds will mature in annual increments starting on July 1,2014, and ending on July 1, 2033. Interest payments are duesemiannually on January I and July I beginning July 1, 2014.A summary of the University's capital improvement debtpayable at June 30, 2014, appears in Table 12.Annual requirements to amortize all capital improvementdebt outstanding as of June 30, 2014, appear in Table 13.Amount OutstandingType and SeriesStudent Housing Auxiliary Debt:2005A Housing2011A Housing2012A Housing2013A HousingTotal Student Housing DebtParking Garage Auxiliary Debt:1998 Parking Garage2007A Parking GarageTotal Parking Garage DebtOther University of Florida Revenue Bonds:2011 Clinical Translational Research Building2013 Student ActivityTotal Other University of Florida Revenue BondsPlus: Unamortized PremiumsLess: Unamortized DiscountsLess: Unamortized Refunding LossesTotal Capital Improvement DebtAmount ofOriginal Issue$ 37,610,00016,350,00026,500,00024,805,0001105,26M,0Principal$ 28,870,00012,795,00024,590,00024,445,00090,700,0003,475,00016,110,000119,585,00Interest$ 12,312,9483,035,8008,309,08810,129,50633,787,342InterestRatesMaturityDate4.000 to 5.125%3.000 to 4.000%3.000 to 4.000%3.000 to 5.000%4.500 to 4.750%3.600 to 4.375%4.433%4.000 to 5.000%2030202820312033201920282030203310,000,00020,770,00030,770,000.428,1745166,1795,594,35329,838,000 26,615,00041,540,000 40,495,00071378,000 67,110,000.r5,725;879(295,280)(1,246,887)$ 207,413,000 $ 181,578,71210,822,81520,932,27231,755,087$ 71,136,78232 1 University of Florida 2013-2014 Annual Financial ReportIT, a"!Fiscal YearEnding June 30201520162017201820192020-20242025-20292030-2034Total Principal & InterestPrincipal$ 8,605,0009,484,0009,873,00010,357,00010,797,00050,770,00052,657,00024,852,000177,95,8000Interest$ 7,630,3487,284,5416,881,4336,443,3315,968,28822,943,63311,730,4492,254,75971,136,782Total$16,235,34816,768,54116,754,43316,800,33116,765,28873,713,63364,387,44927,106,759248,531,782Fiscal YearEnding June_3020152016201720182019Total Minimum PaymentsPrincipal....... .............$ 1,262,710784,928677,952419,419214,877$ 3,359,886Interest............... ... .. ... ..$ 66,41541,22223,5109,3752,511$ 143,033Total$ 1,329,125826,150701,462428,794217,388$ 3,502,919Plus: Unamortized Premiums 5,725,879Less: Unamortized Discounts (295,280)Less: Unamortized Refunding5,725,879(295,280)D. CAPITAL LEASES PAYABLELossesTotalB. LOANS AND NOOn August 30, 2013,at an interest rate of 2ventilation, and airrenovation of J. Wayneand interest cost is exthe newer system. Theprincipal and interest p.17, 2013, the Universityrate of 3.58% for a similThe note matures oninterest payments areto amortize the two ouappear in Table 14.Fiscal YearEnding June 302015R(1,246,887) -(1,246,887) On June 8, 1994, the former Board of Regents, on behalf of$181,578,712 $71,135,781$25 2,715,44 the University of Florida, entered into a lease agreement withthe University of Florida Foundation, Inc. (the Foundation), adirect support organization (component unit) of the University.Under the terms of the agreement, the University agreed toITES PAYABLE lease from the Foundation a 607-space parking garage (thethe University borrowed $6,472,538 garage) located nearthe Health Science CenterAdministrative.33%, to finance the cost of heating, Offices for a period of thirty years beginning July 1, 1994.conditioning (HVAC) update and Lease payments of $100,000 annually are due each July 1.e Reitz Student Union. The principal The garage was simultaneously acquired by the Foundationpected to be met by cost savings of from Shands Teaching Hospital and Clinics, Inc. (Shands), alsonote matures on August 31, 2029, and a component unit, and financed by the Foundation throughayments are made annually. On June the issuance of a promissory note secured by a non-recourseborrowed $5,000,000 at an interest mortgage containing payment terms similar to those in thear renovation at Willard M. Fifield Hall. lease agreement between the Foundation and the University.qovember 1, 2033, and principal and Lease payments from the University to the Foundation andmade annually. Annual requirements from the Foundation to Shands were based on an originalitstanding notes as of June 30, 2014, construction cost of $3,000,000 and no interest. For reportingpurposes, the lease is considered a capital lease under GASSStatement No. 62, Codification of Accounting and FinancialReporting Guidance Contained in Pre-November 30, 1989FASB and AICPA Pronouncements. The initial obligation wasdiscounted at an imputed interest rate of 6.45% and wasPrincipal ..Interest Total recorded at $1,382,470. The asset, which is included in the$ 280A476 $ 523,747 $ 804,223 Property Under Capital Lease and Leasehold Improvements,527465 ..17 57R R4 041 was recorded at cost to Shands of $3,000,000.20162017201820192020-20242025-20292030-2034.TotalC. INSTALLMENT PPAYABLEThe University has enteagreements for the p$5,973,451. The stated5.38%. Future minimumpurchase agreements as551,318 .303,364 854,682572,130 288,408 860,538 On March 1, 2000, the University, acting for and on behalf of597,825 272,820 870,645 the former Board of Regents, entered into a lease agreement3,099,954 1,121,935 4,221,8893,818,784 658,504 4A477,288 with Shands. Under the terms of the agreement, the University2,024,586 217,699 2,242,285 agreed to lease from Shands an 800-space parking garage$11,472,538 $ 3,704,E53 $15,175,591 located near the Health Science Center Administrative Offices.= for a period of thirty years beginning March 1, 2000. Annuallease payments of $227,167 are due each May 1. beginning'UPCHASE AGPEEMENTS May 1, 2001. Lease payment amounts were based on anoriginal construction cost of $6,815,002 and no interest. Forreporting purposes, the lease is considered a capital leasered into several installment purchase under GASB Statement No. 62. The initial obligation wasurchase of equipment reported at discounted at an imputed interest rate of 6.45% and wasinterest rates ranged from 0.00% to recorded at $2,981,939. The asset, which is included in thepayments remaining under installment Property Under Capital Lease and Leasehold Improvements,of June 30, 2014, appear in Table 15. was recorded at cost to Shands of $6,815,002. A summaryA Component Unit of the State of Florida 1 33 Notesof pertinent information related to the two capital leasesappears in Table 16.Interest Original OutstandingCapital Leases Rate Balances BalanceShands Garage (607 spaces) 6.45% $ 1,382,470 $ 720,568Shands Garage (800 spaces) 6.45% 2,981,939 2,226,415Total $ 4,364,409 $ 2,946,983Future minimum payments underthe capital lease agreementsand the present value of the minimum payments as of June30, 2014, are presented in Table 17.F. OTHEP POSTEMPLOYMENTBENEFITS PAYABLEThe University follows GASB Statement No. 45, Accountingand Financial Reporting by Employers for PostemploymentBenefits Other Than Pensions, for certain postemploymenthealthcare benefits administered by the State Group HealthInsurance Program.Plan Description. Pursuant to the provisions of Section112.0801, Florida Statutes, all employees who retire from theUniversity are eligible to participate in the State Group HealthInsurance Program, an agent multiple-employer, defined-benefit plan (Plan). The University subsidizes the premiumrates paid by retirees by allowing them to participate in thePlan at reduced or blended group (implicitly subsidized)premium rates for both active and retired employees. Theserates provide an implicit subsidy for retirees because, on anactuarial basis, their current and future claims are expectedto result in higher costs to the Plan, on average, than those ofactive employees. Retirees are required to enroll in the FederalMedicare program for their primary coverage as soon as theyare eligible. A stand-alone report is not issued and the Planinformation is not included in the report of a public employeeretirement system or another entity.Fiscal YearEnding June_30201520162017201820192020-20242025-20292030TotalPrincipal$ 137,086145,928155,341165,360* InterestS 190,080181,238171,826161,806$ 327,166327,166327,167327,166176,026 151,141 327,167 Funding Policy. Plan benefits are pursuant to provisions1,065,809 570,025 1,635,834 of Section 112.0801, Florida Statutes, and benefits and888,030 247,804 1,135,834213,403 13,765 227,168 contributions can be amended by the Florida Legislature. The..... .........-.. ....................... University has not advance-funded or established a funding$ 2,946,983 $ 1,687,685 $ 4,611468 methodology for the annual Other Postemployment Benefit(OPEB) costs or the net OPEB obligation, and the Plan isfinanced on a pay-as-you-go basis. For the 2013-14 fiscalyear, 2,412 retirees received postemployment healthcareABSENCES PAYABLE benefits. The University provided required contributions oft to be compensated during absences $7,680,000 toward the annual OPEB cost, comprised of benefit)n) and sick leave earned pursuant to payments made on behalf of retirees for claims expenses (netulations, University Regulations, and of reinsurance), administrative expenses, and reinsuranceLeave earned is accrued to the credit premiums. Retiree contributions totaled $14,385,000, whichare kent on each emnlnvee'sj represents 1.3% of covered payroll.E. COMPENSATEDEmployees earn the righfor annual leave (vacaticBoard of Governors Regbargaining agreements.rnf reunpaid (unused) leave balance. The University reports aliability for the accrued leave in accordance with its policyregarding leave payment upon separation from employment.However, Noncapital State Appropriations fund only theportion of accrued leave that is used or paid in the currentfiscal year. Although the University expects the liability tobe funded primarily from future appropriations, generallyaccepted accounting principles do not permit the recordingof a receivable in anticipation of future appropriations.At June 30, 2014, the estimated liability for compensatedabsences, which includes the University's share of theFlorida Retirement System and FICA contributions, totaled$125,950,609. The current portion of the compensatedabsences liability is the amount expected to be paid in thecoming fiscal year, and is based on actual payouts over thelast three years, calculated as a percentage of those years'total compensated absences liability.Annual OPEB Cost and Net OPEB Obligation. The University'sannual OPEB cost (expense) is calculated based on theannual required contribution (ARC), an amount actuariallydetermined in accordance with the parameters of GASB45. The ARC represents a level of funding that if paid on anongoing basis, is projected to cover normal cost each year andamortize any unfunded actuarial liabilities over a period not toexceed 30 years. Table 18 shows the University's annual OPEBcost for the fiscal year, the amount actually contributed to thePlan, and the changes in the University's net OPEB obligation.34 1 University of Florida 2013-2014 Annual Financial ReportDescription Amountthat shows whether the actuarial value of plan assets isincreasing or decreasing over time relative to the actuarialaccrued liabilities for benefits.Normal Cost (service cost for one year)Amortization of Unfunded Actuarial Accrued LiabilityInterest on Normal Cost and AmortizationAnnual Required ContributionInterest on Net OPEB ObligationAdjustment to Annual Required ContributionAnnual OPEB Cost (Expense)Contribution Toward the OPEB CostIncrease in Net OPEB ObligationNet OPEB Obligation, Beginning of YearNet OPEB Obligation, End of Year$ 23,897,000 Actuarial Methods and Assumptions. Projections of22,113,000 benefits for financial reporting purposes are based on the1,840,000 substantive plan provisions, as understood by the employer47,850000 and participating members, and include the types of benefits5,591,000 provided at the time of each valuation and the historical(4,846,000) pattern of sharing of benefit costs between the employerand participating members. The actuarial methods and(7,680,000) assumptions used include techniques that are designed toreduce the effects of short-term volatility in actuarial accrued40,915,000 liabilities and the actuarial value of assets, consistent with the139,775,000.................... long-term perspective of the calculations.$ 180,690,000The University's annual OPEB cost, the percentage of annualOPEB cost contributed to the Plan, and the net OPEB obligationas of June 30, 2014, and for the two preceding fiscal years, arepresented in Table 19.Percentageof AnnualAnnual OPEB Cost Net OPEBFiscal Year OPEB Cost Contributed Obligation2011-122012-132013-14$ 47,652,00047,382,00048,595,00019.7% $ 102,458,00021.2% 139,775,00015.8% 180,690,000Funded Status and Funding Progress. As of July 1, 2013, themost recent actuarial valuation date, the actuarial accruedliability for benefits was $663,395,000 and the actuarialvalue of assets was SO, resulting in an unfunded actuarialaccrued liability of $663,395,000 and a funded ratio of 0%.The covered payroll (annual payroll of active participatingemployees) was $1,072,983,725 for the 2013-14 fiscal year,and the ratio of the unfunded actuarial accrued liability to thecovered payroll was 61.8%.Actuarial valuations of an ongoing plan involve estimatesof the value of reported amounts and assumptions aboutthe probability of occurrence of events far into the future.Examples include assumptions about future employment andtermination, mortality, and healthcare cost trends. Amountsdetermined regarding the funded status of the plan and theannual required contributions of the employer are subject tocontinual revision as actual results are compared with pastexpectations and new estimates are made about the future.The Schedule of Funding Progress, presented as requiredsupplementary information following the Notes to theFinancial Statements, presents multiyear trend informationThe University's OPEB actuarial valuation as of July 1, 2013,used the entry-age cost actuarial method to estimate theactuarial accrued liability as of June 30, 2014, and theUniversity's estimated 2013-14 fiscal year annual requiredcontribution. This method was selected because it is thesame method used for the valuation of the Florida RetirementSystem. Because the OPEB liability is currently unfunded,the actuarial assumptions included a 4% rate of return oninvested assets. The actuarial assumptions also included apayroll growth rate of 4% per year and an inflation rate of3%. Healthcare trend rates were 7.4%, 7.0%, and 8.2% forthe first three years respectively for all retirees in the PPO(Preferred Provider Organization) Plan and were 3.9%, 7.8%,and 8.3% for the first three years for all retirees in the HealthMaintenance Organization (HMO) Plan. The PPO and HMOhealthcare trend rates both grade down to an ultimate rate of5.0% over 70 years. The unfunded actuarial accrued liability isbeing amortized over 30 years using the level percentage ofprojected payroll on an open basis.InterdepartmentalInterdepartmental sales between auxiliary servicedepartments and other institutional departments havebeen eliminated from expenses and revenues for reportingpurposes. The interdepartmental transactions eliminated inthe financial statement preparation totaled $114,768,852 forthe fiscal year ended June 30, 2014.Retirement ProgramsA. FLORIDA RETIREMENT SYSTEMEssentially all regular employees of the University are eligibleto enroll as members of the State-administered FloridaRetirement System (FRS). Provisions relating to the FRSA Component Unit of the State of Florida 1 35 Notesare established by Chapters 121 and 122, Florida Statutes;Chapter 112, Part IV, Florida Statutes; Chapter 238, FloridaStatutes; and Florida Retirement System Rules, Chapter 60S,Florida Administrative Code; wherein eligibility, contributions,and benefits are defined and described in detail. The FRS isa single retirement system administered by the Departmentof Management Services, Division of Retirement, and consistsof two cost-sharing, multiple employer retirement plans andother nonintegrated programs. These include a defined-benefit pension plan (Plan), with a Deferred Retirement OptionProgram (DROP), and a defined-contribution plan, referred toas the FRS Investment Plan (Investment Plan).Employees enrolled in the Plan prior to July 1, 2011, vest at sixyears of creditable service and employees enrolled in the Planon or after July 1, 2011, vest at eight years of creditable service.All vested members, enrolled prior to July 1, 2011, are eligiblefor normal retirement benefits at age 62 or at any age after30 years of service, except for members classified as specialrisk, who are eligible for normal retirement benefits at age 55or at any age after 25 years of service. All members enrolled inthe Plan on or after July 1, 2011, once vested, are eligible fornormal retirement benefits at age 65 or any time after 33 yearsof creditable service, except for members classified as specialrisk, who are eligible for normal retirement benefits at age 60or at any age after 30 years of service. Members of both Plansmay include up to 4 years of credit for military service towardcreditable service. The Plan also includes an early retirementprovision; however, there is a benefit reduction for each year amember retires before his or her normal retirement date. ThePlan provides retirement, disability, and death benefits, andannual cost-of-living adjustments.DROP, subject to provisions of Section 121.091, FloridaStatutes, permits employees eligible for normal retirementunder the Plan to defer receipt of monthly benefit paymentswhile continuing employment with an FRS employer. Anemployee may participate in the DROP for a period not toexceed 60 months after electing to participate. During theperiod of DROP participation, deferred monthly benefits areheld in the FRS Trust Fund and accrue interest.The State of Florida establishes contribution rates forparticipating employers and employees. Effective July 1, 2011,employees were required to contribute 3% of gross salarytowards retirement. Contribution rates during the 2013-14fiscal year are presented in Table 20.Percent of Gross SalaryClass Employee Employer(AlFlorida Retirement System, RegularFlorida Retirement System, SeniorManagement ServiceFlorida Retirement System, Special RiskDeferred Retirement Option Program-Applicableto members from all of the above classesFlorida Retirement System, Reemployed Retiree3.00%6.95%3.00% 18.31%3.00% 19.06%0.00%(B)12.84%(B)(A) Employer rates for each membership class include 1.20% for healthinsurance subsidy. Also, employer rates, other than for DROP participants,include .03% for administrative costs of the Investment Plan.(B) Contribution Rates are dependent upon retirement class in whichreemployed.The University's liability for participation is limited to thepayment of the required contribution at the rates andfrequencies established by law on future payrolls of theUniversity. There were 8,431 University participants duringthe 2013-14 fiscal year. The University's contributions for thefiscal years ended June 30, 2012, June 30, 2013, and June30, 2014, totaled S16,712,175, $17,809,204, and $26,821,475respectively, which were equal to the required contributionsfor each fiscal year. For the fiscal year ended June 30, 2014,the employee contributions totaled $8,939,009.As provided in Section 121.4501, Florida Statutes, eligible FRSmembers may elect to participate in the Investment Plan inlieu of the FRS defined-benefit plan. University employeesalready participating in the State University SystemOptional Retirement Program or the DROP are not eligibleto participate in this program. Employer contributions aredefined by law, but the ultimate benefit depends in part onthe performance of investment funds. The Investment Planis funded by employer and employee contributions that arebased on salary and membership class (Regular Class, SeniorManagement Service Class, etc.). Contributions are directedto individual member accounts, and the individual membersallocate contributions and account balances among variousapproved investment choices. Employees in the InvestmentPlan vest at one year of service. There were 1,823 Universityparticipants during the 2013-14 fiscal year. Required employercontributions made to the Investment Plan totaled S5,289,277and employee contributions totaled $2,225,208.Financial statements and other supplementary informationof the FRS are included in the State's ComprehensiveAnnual Financial Report, which is available from the FloridaDepartment of Financial Services. An annual report onthe FRS, which includes its financial statements, requiredsupplementary information, actuarial report, and otherrelevant information, is available from the Florida Division ofRetirement's web site (www.frs.myflorida.com).36 University of Florida 2013-2014 Annual Financial ReportB. STATE UNIVERSITY SYSTEM OPTIONALRETIREMENT PROGRAMSection 121.35, Florida Statutes, provides for an OptionalRetirement Program (Program) for eligible universityinstructors and administrators. The Program is designed toaid State universities in recruiting employees by offering moreportability to employees not expected to remain in the FRS foreight or more years.The Program is a defined-contribution plan, which providesfull and immediate vesting of all contributions submittedto the participating companies on behalf of the participant.Employees in eligible positions can make an irrevocableelection to participate in the Program, ratherthan the FRS, andpurchase retirement and death benefits through contractsprovided by certain insurance carriers. The employinguniversity contributes 5.14% of the participant's salary to theparticipant's account, 2.19% to cover the unfunded actuarialliability and 0.01% to cover the administrative costs, for atotal of 7.34%. Effective July 1, 2011, employees are requiredto contribute 3.0% of the employee's salary. Additionally, theemployee may contribute, by payroll deduction, an amountnot to exceed the percentage contributed by the Universityto the participant's annuity account. The contributions areinvested in the company or companies selected by theparticipant to create a fund for the purchase of annuities atretirement.There were 5,765 University participants during the 2013-14 fiscal year. Required employer contributions made to theProgram totaled S31,843,739 and employee contributionstotaled $23,799,258.C. INSTITUTE OF FOOD AND AGRICULTURALSCIENCES SUPPLEMENTAL RETIREMENTIn 1984, the Florida Legislature enacted the Institute ofFood and Agricultural Sciences Supplemental RetirementAct to provide a supplement to the monthly retirementbenefit being paid under the Federal Civil Service RetirementSystem to retirees of the Institute of Food and AgriculturalSciences (IFAS) at the University of Florida. The supplementis designated for IFAS cooperative extension employeesemployed before July 1, 1983, who are not entitled to benefitsfrom either a State-supported retirement system or socialsecurity based on their service with IFAS. It was intended tocompensate these I FAS employees for the difference betweentheir Civil Service benefit and the benefits an FRS memberreceives, which include a social security benefit. No additionalpersons can become eligible for this supplement.There were 25 University participants during the 2013-14fiscal year. Required employer contributions made to theprogram totaled $430,243. Employees do not contribute tothis program.D. OTHER RETIREMENT PROGRAMSSome University employees participate in the U.S. Civil ServiceRetirement System. Thirty-one employees were covered bythe U.S. Civil Service Retirement System during the 2013-14 fiscal year. Employer contributions totaled S178,938, andemployee contributions totaled $178,938.

NotesT o nstruction." omin anitmJne 1 , eThe University's construction commitments at June 30, 2014, are presented in Table 21.BalanceProject Title Total Commitment Completed to Date Committed.................... .. .......... ........... .........,. ....... ............. ......... ... .......... ...... .........Reitz Union Expansion and RenovationChemical Biology Building -ChemistryHarrell Medical Education BuildingJoint Use Library Storage FacilityHeavener Hall -School of Business BuildingCypress Hall -Single Student Housing 2015PK Yonge Middle and High School ExpansionEnergy Efficiencies for HVAC, Roof and Building Automation ControlsEntomology and NematologyBroward Hall -Bathrooms, Lounges, Apartment RenovationCorry Village Building 288 RenovationChilled Water Plant Boiler ReplacementMarston Science Library RenovationDasburg President's HouseThomas Hall Window ReplacementBuckman Hall Air Conditioning Design & InstallationCorry Village Building 282 RenovationCorry Village Building 277 RenovationBuckman Hall Bathroom, Kitchen, and Plumbing RenovationCorry Village Building 286 RenovationCorry Village Building 283 RenovationBuckman Hall Window ReplacementCorryVillage Building 276 RenovationSCADA-(Steam Piping) Infrastructure-CampusAustin Cary Conference CenterFume Hoods Chemical Lab 28Air Handling Units Replacement, Fire Sprinkler Installationand Reroof- Dental Science BuildingChilled Water Plant 10Gator Corner Dining AdditionElectrical Sub Station 10Communicore Basement Sprinkler Installation and Ductwork ReplacementMarstonScience Library Renovation -Smathers Map RoomBroward Hall -Fire Sprinkler and Alarm SystemsBroward Hall -Electrical UpgradesAnatomical Pathology and Clinical Pathology Areas Renovation -NecropsyGovernment House Rehabilitation -St Augustine -Phase IIWeil Hall Chiller Plant ReplacementLacy C. Rabon Chilled Water PlantStetson Medical Science Building Lab Suite Renovation -PulmonaryGainesville Communication Services BuildingCampus Security System EnhancementMcKnight Brain Institute Lab Li -151 RenovationSubtotalProjects Under $1,000,000Total$ 70,172,87765,166,29345,419,00026,660,00022,650,00021,900,00018,830,8005,879,2685,786,4454,927,6254,461,3174,099,339:4,000,0003,258,4002,952,8002,735,6402,719,7302,659,0002,533,2552,431,8652,274,757.2,141,3342,046,2971,920,8401,901,6091,901,500.1,832,6111,785,8181,686,8321,459,0071,441,506.1,371,5101 :1;291,1171,281,0061,200,0001,152,3071,120,8341,106,9161,096,8161,004,9001,000,000351,261,17151,279,984$21,092,7915,007,97810,042,4431,516,63614,822,5133,957,784285,9504,289,0644,179,9083,030,3442,589,4352,732,843529,5491,061,3611,446,4511,770,353348,4801,454,5591,956,515373,2711,011,7451,111,2031,779,0001,809,7802,5001,375,37369,2631,621,928306,470.1,023,203806,535217,6838,7171,220 ,160:872,56867,8491,025,219831,7261,061,651655,579928,421100,294,80130,146,532S 49,080,08660,158,31535,376,55725,143,3647,827,48717,942,21618,544,8501,590,2041,606,5371,897,2811,871,8821,366,4963,470,4512,197,0391,506,349965,2872,371,2501,204,441576,7402,058,5941,263,0121,030,131267,297111,0601,899,109526,1271,763,348163,8901,380,362435,804634,9711,153,8271,282,40060,846327,4321,084,45895,615275,19035,165349,32171,579250,966,37021,133,452$ 402,541,155 $ 130,441=333 $ 272,099,822R isk Management ProgramsA. STATE SELF-INSUPANCE PPOGPAMSThe University is exposed to various risks of loss related totorts; theft of, damage to, and destruction of assets; errorsand omissions; injuries to employees; and natural disasters.Pursuant to Section 1001.72(2), Florida Statutes, the University38 University of Floridaparticipates in State self-insurance programs providinginsurance for property and casualty, workers' compensation,general liability, fleet automotive liability, Federal Civil Rights,and employment discrimination liability. During the 2013-14 fiscal year, for property losses, the State retained thefirst $2 million per occurrence for all perils except namedwindstorm and flood. The State retained the first $2 millionof losses per occurrence with an annual aggregate retentionof $40 million for named windstorm and flood losses. After 2013-2014 Annual Financial Reportthe annual aggregate retention, losses in excess of S2 millionper occurrence were commercially insured up to $50 millionfor named windstorm and flood losses through February 15,2014, and increased to S54 million starting February 16, 2014.For perils other than named windstorm and flood, losses inexcess of S2 million per occurrence were commercially insuredup to $200 million; and losses exceeding those amountswere retained by the State. No excess insurance coverage isprovided for workers' compensation, general and automotiveliability, Federal Civil Rights and employment action coverage;all losses in these categories are completely self-insured bythe State through the State Risk Management Trust Fundestablished pursuant to Chapter 284, Florida Statutes.Payments on tort claims are limited to $200,000 per person,and $300,000 per occurrence as set by Section 768.28(5),Florida Statutes. Calculation of premiums considers the cashneeds of the program and the amount of risk exposure foreach participant. There have been no significant reductions ininsurance coverage from the prior year coverage. Settlementshave not exceeded insurance coverage during the past threefiscal years.Pursuant to Section 110.123, Florida Statutes, Universityemployees may obtain healthcare services throughparticipation in the State's group health insurance plan orthrough membership in a health maintenance organizationplan under contract with the State. The State's risk financingactivities associated with State group health insurance, suchas risk of loss related to medical and prescription drug claims,are administered through the State Employees' Group HealthInsurance Trust Fund. It is the practice of the State not topurchase commercial coverage for the risk of loss covered bythis Fund. Additional information on the State's group healthinsurance plan, including the actuarial report, is available fromthe Florida Department of Management Services, Division ofState Group Insurance.B. UNIVERSITY SELF-INSURANCE PROGRAMSThe University of Florida Self-Insurance Program wasreestablished by the Florida Board of Governors effective July1, 2006, by amending Board of Governors' Regulation 10.001,merging the then JHMHC Self-Insurance Program and theprior University of Florida JHMHC/Jacksonville Self-InsuranceProgram. The Self-Insurance Program provides general andprofessional liability protection for the University of FloridaBoard of Trustees (UFBOT) on behalf of the six health collegesof the JHMHC, the College of Veterinary Medicine teachinghospitals, the Student Health Care Center, its direct supportorganization, and their employees and agents. Hospitalprofessional liability protection, including general liability, isprovided to ShandsTeaching Hospital and Clinics, Inc. (Shands),Shands Jacksonville Medical Center, Inc. (a subsidiary ofShands Jacksonville HealthCare, Inc. -Shands Jacksonville),other entities statutorily authorized to participate in theSelf-Insurance Program, and their employees and agents.The UFBOT and other immune entities are protected forlosses which are subject to Section 768.28, Florida Statutes,including legislative claims bills, that in combination with thewaiver of immunity limits described in Section 768.28, FloridaStatutes, do not exceed Sl million per claim and, for voluntarysettlements defined by the Program's Memorandum ofProtection, S2 million per claim. For those protected entitiesnot subject to Section 768.28, Florida Statutes, the Programprovides $2 million per claim. The per claim limit of liabilityprotection for the participants does not exceed S2 million perclaim in the event more than one protected entity is involvedin the same claim or action.Pursuant to Board of Governors' Regulation 10.001(2), theUniversity of Florida Self-Insurance Program Council hascreated the University of Florida Healthcare EducationInsurance Company (H EIC), a captive insurancecompanywhichis wholly owned by the Board of Governors and domiciled inthe State of Vermont. HEIC is managed by a Board of Directorscreated by the Board of Governors. HEIC provides coveragefor claims that are in excess of the protections afforded bythe University of Florida Self-Insurance Program, at limitsof $4 million per-legislative claims bill coverage for insuredparticipants subject to Section 768.28, Florida Statutes, and$3 million per claim for voluntary settlements entered into bythe Self-Insurance Program Council and insured participantsthat are not subject to Section 768.28, Florida Statutes. HEICprovides additional limits of liability coverage of $50 millionper claim and in the aggregate, which is in excess of thecoverages described above. The excess insurance is paid toclaimants on a first-come, first-serve basis.Claims settlement and adjustment expenses are accruedas expenses and liabilities of the University of Florida Self-Insurance Program and University of Florida HealthcareEducation Insurance Company, for the estimated settlementvalue of claims that is reported as a Liability for Self-Insured Claims. The estimated settlement value of claimswas determined based on the judgment and experience ofmanagement and the Self-Insurance Program Council througha case-by-case review. Estimated losses from incurred butunreported incidents are accrued based upon the findings ofcasualty actuaries.The amount of Liability for Self-Insured Claims accruedfor the Self-Insurance Programs at June 30, 2014, was$45,801,534 for compensatory losses and for allocatedexpenses. The Liability for Self-Insured Claims was accrued atan undiscounted present value. The liability declined becausethe actuary recommended a decrease in funding that can beattributed to: the sovereign immunity granted to Shands andShands Jacksonville as of July 1, 2011; lower case reservesrequired for more mature years; and the decrease in thepossibility of claims reaching the HEIC layer. As a result, theSelf-Insurance Claims and Expenses on the Statement ofRevenues, Expenses and Changes in Net Position are negativefor the 2013-14 fiscal year.The aggregate amount of claims liabilities for which annuitycontracts have been purchased in the claimants' names,A Component Unit of the State of Florida 1 39 Notesresulting in the removal of the related liabilities from theStatement of Net Position, totals $117,162 for the Self-Insurance Program at June 30, 2014. These annuities havebeen assigned to third parties, and all claimants have fully andcompletely released the Self-insurance Program participantsfrom all actual and contingent liability.Changes in the balances of claims liabilities for the Self-Insurance Program and HEIC during the 2012-13 and 2013-14fiscal years are presented in Table 22.CurrentClaims Liabilities Claims/ Changes Claims Claims LiabilitiesFiscal Year Beginning of Year in Estimates (A) Payments End of Year2012-13 $ 102,831,592 $ (29,286,713) $ (17,397,418) $ 56,147,4612013-14 56,147,461 (5,784,153) (4,561,774) 45,801,534(A) The change in estimates of claim costs for the 20124 13 and 2013-14 fiscal years, as determined by actuary, resulted in:neg:ative Current Claims/Changesin Estimates. See Note 16B for more details.Litigation And ContingoenciesThe University is involved in several pending and threatenedlegal actions. The range of potential loss from all such claimsand actions, as estimated by the University's legal counsel andmanagement, should not materially affect the University'sfinancial position.The United States Department of Health and Human Services'and National Science Foundation's Offices of Inspector General,with the United States Department of Justice (civil division),are investigating the University's practices relating to Federalawards finances and accounting. University management isunable to make a determination of the outcome or estimatecosts that the University may incur as a result of this audit.0 Functional Distribution Of.j Operati..E3, ExpeI sesThe functional classification of operating expenses (instruction,research, etc,) is assigned to each individual transactionbased on the nature of the activity. The operating expenseson the Statement of Revenues, Expenses, and Changes inNet Position are presented by natural classifications. Table 23presents those same expenses in functional classifications asrecommended by NACUBO.* ,: ,*.***Functional ClassificationsAmountInstructionResearchPublic ServiceAcademic SupportInstitutional SupportDepreciationAuxiliary OperationsOperation and Maintenance of PlantScholarships, Fellowships and Waivers, NetStudent Services$ 686,759,685584,733,991432,100,137167,247,282162,252,432123,114,297112,306,71994,904,61656,659,18135,851,320$ Z455,929,660Total Operating Expenses..... int U itA. BLENDED COMPONENT UNITSThe University has two blended component units as discussedin Note 1. Financial information for the University's blendedcomponent units is presented in Table 24.B. DISCRETELY PRESENTED COMPONENTUNITSThe University's financial statements include 14 discretelypresented component units as discussed in Note 1. Thesecomponent units comprise 100% of the transactions andaccount balances of the aggregate discretely presentedcomponent units' columns of the financial statements.Summary financial information from the most recentlyavailable audited financial statements for these componentunits is presented on the following pages inTables 25,26, and 27.40 1 University of Florida 2013 201-1 Annual Financial Poport'XI..... .....A4., 0.!. 44jkAII6AV-!"owitA..............'IFA Coirponent Unit of thc, State of Flonchi 411 NotesI Segment InformationA segment is defined as an identifiable activity (or groupingof activities) that has one or more bonds or other debtinstruments outstanding, with a revenue stream pledgedin support of that debt. In addition, the activity's relatedrevenues, expenses, gains, losses, assets, and liabilities arerequired to be accounted for separately. Transportationand Parking Services provides the University with safe andadequate parking facilities. Several parking garages havebeen constructed from the proceeds of revenue-backeddebt instruments. The Department of Housing and ResidenceEducation provides safe and affordable living space forstudents of the University of Florida. Capital improvementdebt has been issued over the years to provide funding for theconstruction of facilities to house students of the University.A summary of the financial activity for these segments ispresented in Table 28.

2013-2014 Annual Financial Report-o ~ v~ *oo -~ 4* HealthcareEducationSelf-Insurance InsuranceProgram Company.......... 3 2 ,8 82............. .. ... .......CONDENSED STATEMENT OF NET POSITIONAssetsDue from University/Blended Component UnitsCurrent AssetsCapital Assets, Net.Other Noncurrent AssetsTotal AssetsLiabilitiesDueto University/Blended Component UnitsCurrent LiabilitiesNoncurrent LiabilitiesTotal LiabilitiesNet PositionNet Investment in Capital AssetsRestricted -Expendable OtherUnrestrictedTotal Net Position$165,875165,87532,8821,12834,95268,96296,913$ 96,913$ 32,88219,33952,221410,85010,854.TotalBlendedComponentUnits$ 32,882185,214218,09632,8821,13245,80279,816TotalPrimaryUniversity Eliminations Government$1,155,1711,714,765189,5623,059,498215,644493,342708,986$ (32,882) $ -(1,860) 1,338,525-1,714,765189,562(34,742) 3,242,852(32,882)... .......................(32,882)(1,860)(34,742)214,916539,144754,0601,565,31341,67 138,280 636,630S- 148,569$ 41.367 $ 13828 $ 2,350,512CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONOperating Revenues $ 10,976 $ 684Depreciation ExpenseOther Operating Expenses (6,348) 6,444Operating Income (Loss) 4,628 7,128Nonoperating Revenues (Expenses)* Investment Income, Net of Expenses 1,972 564Net Increase in the Fair Value of Investments 9,944 2,363Other Nonoperating RevenuesNet Nonoperating Revenues ..11,916 2,927Other Revenues, Expenses, Gains,or Losses-1,565,313-774,910148,5695, -$ 488,792....... .......... ..... ~$ (7,752) S 1,659,870-(123,114)7,752 (2,332,816)-(796,060)$ 11,6609611,7562,53612,30714,84326,599111,681$ 138,280$ 1,655,962(123,114)(2,340,664)(807,816)31,34020,217788,117839,67461,37493,2322,257,280$ 2,350W51233,87632,524788,117854,517Increase (Decrease) in Net PositionNet Position, Beginning of YearNet Position, End of Year16,54480,369$ 96,91310,05531,312$ 41,36761,374119,831-2,368,961$ -$ Z.488,792CONDENSED STATEMENT OF CASH FLOWSNet Cash Provided (Used) byOperating ActivitiesNoncapital Financing ActivitiesCapital and*Related Financing ActivitiesI Investing ActivitiesNet Increase (Decrease) in Cash and Cash EquivalentsCash and Cash Equivalents, Beginning of Year.Cash and Cash Equivalents, End of Year..$ 1,0106401,650152$ ....$ 509(509)$S 1,5191311,650152$ 180=$ (630,364)763,957(58,327)(78,915)(3,649)200$ (3,449)$ (4,139)5,9981,859(46)$ 1,813$ (632,984)769,955(58,327)(78,784)(140)306$ 166A Component Unit of the State of Florida 1 43 NotesUniversityUniversity The University of Floridaof Florida Athletic ResearchFoundation, Inc. Association, Inc. Foundation, Inc.CONDENSED STATEMENT OF NET POSITIONAssetsDue from Component Units/University $ 24,582 $ 17,557 $Other Current Assets 101,223 59,424 139,732Capital Assets, Net 73,524 171,919Other Noncurrent Assets 1,772,521 ....57,008Total Assets 1,971,850 305,908 139,732T t ! A s t. ..... ............. .......... ................... ....+ .... ....... .................... ........ ...... ............. ..... .... .... .............................. *............................ ............LiabilitiesDue to Component Units/University 22,405 1,339 25,388Other Current Liabilities 21,634 69,011 10,965Noncurrent Liabilities 24,737 82,747Total Liabilities 68,776 153,097 36,353., ....... .... .. ..... .. ............. .... ...... ............. .... .... ... ..... ........:.... :. ........ .. ..... ..... ................. ...Net PositionNet Investment in Capital Assets 19,445 87,209 .Restricted-Nonexpendable Endowment 1,196,244Restricted-Expendable Endowment 380,075Restricted-Expendable Other 311,209 15,122Unrestricted (3,899) 50,480 103,379Total Net Position $ 1,903,074 $ 152,811 $ 103,379CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONOperating Revenues $ .101,807 $ 67,846 $ 30,031Operating Expenses (154,695) (107,117) (31,310)Operating Income (Loss) (52,888) (39,271) (1,279)Nonoperating Revenues (Expenses) and Other Revenues,Expenses, Gains, or LossesInvestment Income, Net of Expenses 188,348 1,712 10,184Net Increase in the Fair Value of Investments 3,259 8,343 1,134,Other Nonoperating Revenues -46,211 2,300Other Nonoperating Expenses 487 (6,380) (540)Addition to Permanent Endowments 31,577 * -_.Change in Net Position 170,783 10,615 11,799.. .. .... ... ........ ... .... .... ...Net Position, Beginning of Year 1,732,291 142,196 91,580.Adjustments to Beginning Net PositionNet Position, Beginning of Year! as Restated 1,732,291 142,196 91,580Net Position, End of Year $ 1,903,074 $ 152,811 $ 103,37944 1 University of Florida 2013-2014 Annual Financial ReportGatorCareHealthManagementCorporationUniversityof FloridaDevelopmentCorporationCitrusResearch andDevelopmentFoundation, Inc.TotalDirect-SupportOrganizationsGatorBoosters, Inc.$17,0819,68126,76226,374$4,39913,381:46442$82610,86011,686$18,2686,3236,3236,1786,178$26,37417,013131129.17,2734644250745337983246,538337,990256,3491,839,6522,480,52966,598134,672107,613308,883117,5601,196,686380,075326,610150,7152,171,64610,860(6)10,854279(134)388$ 388.$995$$145 $$406(103)$39,230(2,748)36,482S1,085(2,098)$ 9,368(18,434)$249,773(316,505)303(1,013)(9,066)(66,732)1,7021,219536,911(38,178)6201,99912,73656,641(44,611)31,583191,6163038512206(2,102)98310,6482,2471,980,0301,980,0308598310,6482,247$ 145$ 398$ 995 .10,854.$ 2,171,646A Component Unit of the State of Florida 1 45 NotesFloridaFlorida University of Veterinary University of TotalClinical Florida Medicine Florida HealthPractice Jacksonville Faculty Jacksonville Faculty ScienceAssociation, Physicians, Association, Healthcare, Associates, CenterInc. _ _ Inc., Inc. Inc. *

• _ Inc. AffiliatesCONDENSED STATEMENT OF NET POSITIONAssetsDue from Component Units/UniversityOther Current AssetsCapital Assets, NetOther Noncurrent AssetsTotal AssetsLiabilitiesDue to Component Units/UniversityOther Current LiabilitiesNoncurrent LiabilitiesTotal LiabilitiesNet Position$ 3,598 $93,22447,73724,258168,817.10,70337,61517,16965,487t 1,004 $ 8657,797 3,033-3,5838,801 7,4814,987923 2,125923 ..7,923 7,112$ -$ 16,1706,166 147,835-. 68,489..24,2586,166 256,752-12,827" 112 31,465... .._41,385112 85,6777,384 45616,368 11,93735,354 6,03159,106 18,424Net Investment in Capital Assets 10,925 10,393Unrestricted 98,786 36,670Total Net Position $ .109,711 $ 47,063CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONOperating Revenues $ 483,336 $ 229,534Operating Expenses (115,015) (118,723)Operating Income (Loss) 368,321 110,811Nonoperating Revenues (Expenses)Investment Income, Net of Expenses (352) 40Net Decrease in the Fair Value of Investments (412)Other Nonoperating Revenue * *Other Nonoperating Expense (357,864) (110,657)Change in Net Position 9,693 194Net Position, Beginning of Year 100,300 46,944Adjustments to Beginning Net Position (Note 2) (282) (75)Net Position, Beginning of Year, as Restated 100,018 46,869Net Position, End of Year $ 109,711 $ 47,0633,5837,878 (3,214)$ 7,878 369......~ ~~~~~ ~~~~~.... ... ....-.-.: :.::-. -.... v .:. :-24,9016,054 146,174$ 6,054 $ 171,075$ 18,008 $ 739,086(250) (266,278)17,758 472,808$ 7,984 $ 224(411) (31,879)7,573 (31,655)15 4 (293)---(412)31,655 -31,655(7,448), (15,230) (491,199)... ...... .......... ... .... ..... .... ,5 32..... ..... ................ !2 .5..140 -2,532 12,5597,738 ... 369 3,522 158,873(357)7,738 369 3,522 158,516$ 7,878 $ 369 $ 6,054 $ 171,07546 1 University of Florida

Notes0 ~*<~<; tK:~2&.~ShandsTeachingHospital& Clinics, Inc.ShandsJacksonvilleHealthCare, Inc.TotalShandsHospitaland OthersCONDENSED STATEMENT OF NET POSITIONAssetsDue from Component Units/UniversityOther Current AssetsCapital Assets, NetOther Noncurrent Assets$ 60,318391,220728,652512,5221,692,712$190,149170,72469,213$ 60,318581,369899,376581,735........ 2.................. 5. .. .2,122,798Total Assets430,086Deferred Outflows of ResourcesAccumulated Decrease in Fair Value of Interest Rate Swap AgreementsLosses on Debt RefundingTotal Assets and Deferred Outflows of Resources42,0526311,735,395UabilitiesDue to Component Units/UniversityOther Current LiabilitiesNoncurrent Uabilities10,129161,362614,871786,362430,08637,34288,389136,008261,73942,0526312,165,48147,471249,751750,8791,048,101Total LiabilitiesDeferred Inflows of ResourcesGains on Debt Refunding 11t668Total Liabilities and Deferred Inflowsof ResourcesNet PositionNet Investment in Capital AssetsRestricted-Nonexpendable EndowmentRestricted-Expendable EndowmentUnrestricted798,030154,382977,848775,038$ 937,365.,:261,739.40,843.4,083123,42111,6681,059,769195,2259711,931898,459Total Net Position$ 168,347 $ 1,105,712CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONOperating RevenuesOperating ExpensesOperating IncomeNonoperating Revenues (Expenses)Investment Income (Loss), Net of ExpensesNet Increase in the Fair Value of InvestmentsOther Nonoperating RevenueOther Nonoperating Expense$ 1,199,789'11,114,905)84,884*33,3773,45211,377(66,399)66,691870,674870,674$ 937=65$ 541,067(510,612)30,455(3,376)531(24,823)2,787165,560$ 1,740,856(1,625,517)1.15,33930,0013,45211.908(91,222)...............................( .!. ' 2..... ... ..69,4781,036,2341,036,234$ 1,105,712Change in Net PositionNet Position, Beginning of YearAdjustments to Beginning Net PositionNet Position, Beginning of Year, as Restated165,560Net Position, End of Year$ 168,34748 1 University of Florida 2013-2014 Annual Financial ReportDepartment of HousingTransportation and and ResidenceParking Services EducationCONDENSED STATEMENT OF NET POSITIONAssetsCurrent AssetsCapital Assets, NetOther Noncurrent AssetsTotal AssetsliabilitiesCurrent LiabilitiesNoncurrent LiabilitiesTotal LiabilitiesNet PositionNet Investment in Capital AssetsRestrictedUnrestrictedTotal Nat Position$ 8,006,72037,284,9438,444,17353,735,8363,280,28520,854,41024,134,69516,293,4478,413,7744,893,920$ 29,601,141$ " 2,423,077123,451,97334,317,019160,192,06912,877,11887,212,297100,089,415.. .. ... ...: ........... ............ .........150,235(6,074,585)$ 60,102,654CONDENSED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITIONOperating Revenues (Expenses):Operating RevenuesDepreciation ExpenseOther Operating ExpensesOperating IncomeNonoperating Revenues (Expenses):Investment IncomeInterest on Capital Asset-Related DebtOtherTransfersNet Nonopereting Revenues (Expenses)Change in Net PositionNet Position, Beginning of YearNot Position, End of YearCONDENSED STATEMENT OF CASH FLOWSNet Cash Provided (Used) by:Operating ActivitiesNoncapital Financing ActivitiesCapital and Related Financing ActivitiesInvesting ActivitiesNet Decrease in Cash and Cash EquivalentsCash and Cash Equivalents, Beginning of YearCash and Cash Equivalents, End of Year$ 22,713,921(2,329,606)(16,120,771)4,263,544181,295(1,068,428)(781,151)(3,550,742)(5,219,026)(955,482)30,556,623$ 29,601.141$ .52,304,777(4,244,004)(39,921,633)8,139,140594,516(4,882,718)(2,299,104).4,070,573(2,516,733)5,622,40754,480,247$ 60,102,664$ .. 13,963,577(8,036,469)4,361,215(11,967,134).(1,678,811)3,006,107S .......... 1.320o6$1I,327,296$7,140,487(2,429,555)(4,261,119)(453,039)(3,226)3,226$ _______A Component Unit of the State of Florida 1 49 Other Required Supplementary InformationUAALosaActuarial Actuarial Accrued PercentageActuarial Value of Liability (AAL) Unfnded Funded Covered of CoveredValuation Assets (1) AM. (UAAL) Ratio Payroll PayrollDate (a) (b) (b-a) (aib) (c) ((b-a)/c)7/1/2009 $ -455,677 $ 455,677 0% $ 948,375 48%7/11/2011 643,742 643,742 0% 996,686 65%7/1/2013 663,395 663,395 0% 1,072,984 62%(1) The entry-age cost actuarial method is used by the University.Notes to Required Supplementary Information:Scbedule of Funding Progress -Otlher Postm owineIt Benerft PlanThe July 1, 2013, unfunded actuarial liability of $663.4 million was higher than the July 1,2011, liability of $6433 million due to several factors. While there were fewerretirees and the healthcare trend rates are lower, the rising age of retirees and the impact of the potential excise tax from the Affordable Care Act increased the implicitrate subsidy and offset the decreasing factors.

Supplemental Information2013-2014 Annual Financial Report~q#~<~ ~.:06-Number ofRecipientsAidDisbursedFederal ProgramsPell GrantsSupplemental Educational Opportunity GrantsNoyce-Scholarship LoansTEACH GrantPerkins Student LoansHealth Professions Student Loans (PCL, LDS, HPSL)Direct LoansTOTAL FEDERAL FINANCIAL AID ADMINISTEREDState ProgramsLoans:University of Florida Short-Term LoansStudent Aid For Education (SAFE) LoansUniversity of Florida Long-Term LoansTotal Loans AdministeredScholarships and Grants:State of Rorida Financial Aid ProgramLottery Trust Grant Funded WaiversTotal State Scholarships and Grants AdministeredTOTAL STATE FINANCIAL AID ADMINISTEREDOther Scholarships and GrantsInstitutional Grants:College Awarded ScholarshipsGraduate Tuition Remission WaiversGeneral ScholarshipsTotal Institutional Scholarships and GrantsCustodial Scholarships:Tuition, Trusts, Clubs, Service Organizations, etc.TOTAL OTHER SCHOLARSHIPS AND GRANTS12,1332,1885101,5998719,87035,892$47,492,4042,088,80150,00035,4314,773,863716,603249,035,362.51994164777$ 304,192,464$ 647,503222,545648,7791,518,82728,915 .66,039,123403 1,548,75129,318 " 67,587,87430,095 $ 69,106,70111,639 $ 38,894,0002,775 20,119,6077,924 20,026,21022,338 79,039,8174,3869,805,45926,724 $ 88,845276Fee WaiversNon-Resident Tuition WaiversOther WaiversTOTAL FEE WAIVERS ADMINISTEREDTOTAL FINANCIAL AID ADMINISTERED4535,303$ 5,560,20734,411,8025,756 $ 39,972,009$ 502,116,450A Component Unit of the State of Florida I 51 AUDITOR GENERALSTATE OF FLORIDADAVID W. MARTIN, CPA G74 Claude Pepper Building PHONE: 850-412-2722AUDITOR GENERAL Peppe r FAX: 850-488-6975111 West Madison StreetTallahassee, Florida 32399-1450The President of the Senate, the Speaker of theHouse of Representatives, and theLegislative Auditing CommitteeINDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERSBASED ON AN AUDIT OF THE FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENTAUDITING STANDARDSReport on the Financial StatementsWe have audited, in accordance with the auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Governiment Auditing Standards issued by the Comptroller General of the United States, thefinancial statements of the University of Florida, a component unit of the State of Florida, and its aggregate discretely presentedcomponent units as of and for the fiscal year ended June 30, 2014, and the related notes to the financial statements, which collectivelycomprise the University's basic financial statements, and have issued our report thereon dated December 16, 2014, included under theheading INDEPENDENT AUDITOR'S REPORT. Our report includes a reference to other auditors who audited the financialstatements of the blended and aggregate discretely presented component units, as described in our report on the University's financialstatements. This report does not include the results of the other auditors' testing of internal control over financial reporting orcompliance and other matters that are reported on separately by those auditors.Internal Control Over Financial ReportingIn planning and performing our audit of the financial statements, we considered the University's internal control over financial reporting(internal control) to determine audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions onthe financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University's internal control.Accordingly, we do not express an opinion on the effectiveness of the University's internal control.A deicien', in internal cont/,v exists when the design or operation of a control does not allow management or employees, in the normalcourse of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A mateiial weakness is adeficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement ofthe University's financial statements will not be prevented, or detected and corrected on a timely basis. A significant de/icienq, is adeficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough tomerit attention by those charged with governance.Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed toidentify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, duringour audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, materialweaknesses may exist that have not been identified.52 1 University of Florida 2013-2014 Annual Financial ReportCompliance and Other MattersAs part of obtaining reasonable assurance about whether the University's financial statements are free of material misstatement, weperformed tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements, noncompliancewith which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinionon compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The resultsof our tests disclosed no instances of noncompliance or other matters that are required to be reported under Goverument AuditingStandards.Purpose of this ReportThe purpose of the INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE FINANCIALSTATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS is solely todescribe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on theeffectiveness of the University's internal control or on compliance. This report is an integral part of an audit performed in accordancewith Government Auditing Standards in considering the University's internal control and compliance. Accordingly, this report is not suitablefor any other purpose.Respectfully submitted,David W. Martin, CPATallahassee, FloridaDecember 16, 2014Audit Report No. 2015-074A Component Unit of the State of Florida 1 53 Executive OfficersDr. J. Bernard MachenPresidentJane AdamsVice President for University RelationsElias G. EldayrieVice President and Chief Information OfficerPauia Varnes FussedVice President for Human Resource ServicesDr. Joseph GloverProvost and Senior Vice President for Academic AffairsDrn -avid S. GuzickSenior Vice President for Health AffairsJamie Lewis Ke&thVice President and General CounselPrincipal Finance andAccounting OfficialsXim C 5imnso,Interim Assistant Vice President and University ControllerBrad S. StactsAssistant Vice President for Contracts and Grants Accounting ServicesSenior Associate Controller for University Disbursement Services,Asset Management, and Cost AnalysisKathleen M. TiliettSenior Associate Controller for General Accounting, Financial Reporting,Payroll and Tax ServicesAlan M. WestSenior Associate Controller for University Bursar and Treasury ManagementDavid E. KratzerVice President for Student AffairsIn loving memory ofDr. Charfes E, LaneSenior Vice President and Chief Operating OfficerMichael V, McKeeInterim Vice President and Chief Financial OfficerThomas .J, MitchellVice President for Development and Alumni AffairsDr. David D_ NortonVice President for ResearchDr. Jack M. PayneSenior Vice President for Agriculture and Natural ResourcesCurtis A. ReynoldsVice President for Business AffairsSheela Moudgil, CPA:." Associate.ControllerGeherdlI'Accountifig..and Financial ReportingFinance and AccountingA Dedicated and Valued Colleague,, Alurnnu'l and Friend54 1 University of Florida University of Florida Board of TrusteesDr. Stevo M, FIcON David L, BrandoChair Palm Horbar, aLBo)ca Paton, FLwmndcrnr t L UttwLrrdChnraophor 7 Cot,ake Lure, NCChIrles B Brwoths James W. HeasertceOr Prosier p motorUV$'tNC5' of UIorid~Porolhi tO tow rhoPoOerlDr. Jason J. PasenberrpAlochoa. ana.Juliet M. David ° "ThemeaPlan tation, FL Windermnorr, FLCcnP-rsity tf I'DESIGN:University Relations Creative ServicesPHOTOGRAPHY:University Relations, Lester Photography,Gaylor Photography, photos~com 1i