REPORT NO. 2011-106 FEBRUARY 2011 FLORIDA GULF COAST UNIVERSITY Financial Audit_part2 pdf

FEBRUARY 2011 REPORT NO. 2011-106
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Cash flows from investing activities show the net source and use of cash related to purchasing or selling investments,
and earning income on those investments. Cash flows from the noncapital financing activities include those activities
not covered in other sections.
The following summarizes cash flows for the 2009-10 and 2008-09 fiscal years:
Condensed Statement of Cash Flows
(In Thousands)
2009-10 2008-09
Cash Provided (Used) by:
Operating Activities (64,038)$ (55,511)$
Noncapital Financing Activities 71,708 66,942
Capital and Related Financing Activities (15,312) (34,410)
Investing Activities (2,279) 4,784
Net Decrease in Cash and Cash Equivalents
(9,921) (18,195)
Cash and Cash Equivalents, Beginning of Year 15,212 33,407
Cash and Cash Equivalents, End of Year
5,291$ 15,212$

Major sources of funds included in operating activities are net student tuition and fees of $35.1 million; Federal and
State and local grants and contracts of $12.9 million; and sales and services of auxiliary enterprises of $16.6 million.
Major uses of funds were payments made to and on behalf of employees totaling $83.7 million; payments to suppliers
totaling $31.3 million; and payments to and on behalf of students for scholarships totaling $14.1 million. The increase
in cash used from operating activities was due primarily to an increase in tuition and fee revenue collections offset by
increased payments to students for scholarships, fellowships and waivers, as well as increased payments to suppliers
for services and supplies, and payments to employees for salaries and benefits.
The largest source of inflow of cash for noncapital financing activities was State appropriations in the amount of
$46.5 million. Also included in noncapital financing revenues was Federal and State student financial aid of
$21.5 million. The overall increase of $4.8 million in cash provided by noncapital financing activities was primarily
due to an increase in Federal and State student financial aid of $5.3 million, the receipt of $3.6 million in State

appropriated ARRA funds, offset with a decrease in State appropriations of $5.4 million.
Cash used by capital and related financing activities was $15.3 million, a decrease of $19.1 million. Net cash used was
primarily due from the purchase or construction of capital assets in the amount of $45 million and principal and
interest paid on debt and leases in the amount of $6.7 million offset with capital appropriations in the amount of
$36.4 million.
Cash used by investing activities was $2.3 million, an increase of $7.1 million from the net purchases of investments.
CAPITAL ASSETS, CAPITAL EXPENSES AND COMMITMENTS,
AND DEBT ADMINISTRATION
C
APITAL ASSETS
At June 30, 2010, the University had $479.9 million in capital assets, less accumulated depreciation of $72.4 million,
for net capital assets of $407.5 million. Depreciation charges for the current fiscal year totaled $11.7 million. The
following table summarizes the University’s capital assets, net of accumulated depreciation, at June 30:
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Capital Assets, Net at June 30
(In Thousands)
2010 2009
Land 32,681$ 32,605$
Buildings 314,566 261,108
Construction in Progress 18,450 47,659
Infrastructure and Other Improvements 19,266 16,533
Furniture and Equipment 19,137 16,392
Library Resources 1,136 1,055
Property Under Capital Leases 366 658
Works of Art and Historical Treasures 1,767 273
Other Capital Assets 128 125
Total Capital Assets, Net

407,497$ 376,408$

Additional information about the University’s capital assets is presented in the notes to financial statements.
C
APITAL EXPENSES AND COMMITMENTS
The University’s major capital commitments at June 30, 2010, are as follows:
Total Committed 51,899$
Completed to Date (18,450)
Balance Committed
33,449
$

Amount
(In Thousands)

Additional information about the University’s capital commitments is presented in the notes to financial statements.
D
EBT ADMINISTRATION
As of June 30, 2010, the University had $131.4 million in outstanding bonds payable, loan payable, and capital leases
payable, representing a decrease of $9.2 million, or 6.5 percent, from the prior fiscal year. Apart from debt service
payments of $2.7 million, a prior period adjustment occurred from a change in the accounting for State University
System Capital Improvement Trust Fund Revenue Bonds. It has been determined these bonds are not the debt of the
University since repayment is the responsibility of the Florida Board of Governors. The change is reflected in a
$6.5 million decrease in the University’s bonds payable and an increase in the University’s beginning net assets.
Additional information about the change in reporting capital debt is included in note 2 to the financial statements.
The following table summarizes the outstanding long-term debt by type for the fiscal years ended June 30:
Long-Term Debt, at June 30
(In Thousands)
2010 2009
Bonds Payable 125,783$ 134,729$

Loan Payable 5,000 5,000
Capital Leases Payable 663 897
Total
131,446$ 140,626$

Additional information about the University’s long-term debt is presented in the notes to financial statements.

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FEBRUARY 2011 REPORT NO. 2011-106
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ECONOMIC FACTORS THAT WILL AFFECT THE FUTURE
The University is not aware of any currently known facts, decisions, or conditions that are expected to have a
significant effect on its financial position or operations during the 2010-11 fiscal year. The University’s financial
outlook for the future continues to be positive. The level of State support, compensation and benefit increases, and
student tuition and fee increases impact the University’s ability to expand programs, undertake new initiatives, and
meet its core mission and ongoing operational needs. State appropriations, as a percentage of operating revenues and
nonoperating revenues, represent approximately 31.5 percent of the total of these combined revenues. The level of
State support is, therefore, one of the key factors influencing the University’s activities. Financial and political support
from State government is expected to remain at lower levels in the short term until economic conditions improve and
will be managed through tuition increases, targeted expenditure reductions, and efficiencies.
The budget that the Florida Legislature adopted for the 2010-11 fiscal year provided a 1.3 percent decrease for the
University’s State appropriations and is partially offset with $3.4 million of State appropriated ARRA funds.
Regarding the University’s legislative priorities, the Legislature did not provide a salary increase for State university
employees; however, the University will fund a two percent salary increase starting January 1, 2011, and a $1,000
one-time lump sum bonus for employees. The Legislature did not provide additional funding for enrollment growth
at State universities.
Another significant factor in the University’s economic position relates to its ability to recruit and retain high quality
students. The Fall 2010 enrollment of 12,103 students increased 7.9 percent over the Fall 2009 enrollment of 11,219
students. First time-in-college freshman admission of 2,250 students represents a 12.3 percent increase over the

2009-10 fiscal year. Efforts to improve retention such as an aggressive marketing plan to recruit qualified students
and enhanced intervention to assist academic success will help assure total enrollment continues a positive trend. In
the 2010-11 fiscal year, the University expects an increase in revenue from student tuition and fees due to a
combination of increased enrollment and increased student tuition and fees. The State has approved and
appropriated funds to the University’s capital budget for the 2010-11 fiscal year in the amount of $15.9 million.
Public Education Capital Outlay appropriations for the 2010-11 fiscal year were for the Academic VIII building in the
amount of $12.5 million, Infrastructure in the amount of $3 million, and Repairs and Maintenance in the amount of
$410 thousand.
REQUESTS FOR INFORMATION
Questions concerning information provided in the MD&A, financial statements and notes thereto, and other required
supplemental information, or requests for additional financial information should be addressed to Dr. Joseph
Shepard, Vice President of Administration and Finance, Florida Gulf Coast University, 10501 FGCU Boulevard
South, Fort Myers, Florida 33965.

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FEBRUARY 2011 REPORT NO. 2011-106
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BASIC FINANCIAL STATEMENTS
University Component
Unit
ASSETS
Current Assets:
Cash and Cash Equivalents 13,281$ 9,071,279$
Investments 48,274,273
Accounts Receivable, Net 2,622,029 89,410
Loans Receivable 58,543
Due from State 24,516,773
Other Current Assets 300,000
Total Current Assets

75,784,899 9,160,689

Noncurrent Assets:
Restricted Cash and Cash Equivalents 5,277,402
Investments 611,356
Restricted Investments 5,331,306 44,615,132
Accounts and Pledges Receivable, Net 1,832,566
Note Receivable 6,857,192 5,000,000
Real Estate Held for Investment 4,551,500
Depreciable Capital Assets, Net 354,603,085 4,021
Nondepreciable Capital Assets 52,894,407
Other Noncurrent Assets 52,512
Total Noncurrent Assets
424,963,392 56,667,087

TOTAL ASSETS
500,748,291$ 65,827,776$

LIABILITIES
Current Liabilities:
Accounts Payable 5,295,811$ 55,433$
Interest Payable 48,751
Construction Contracts Payable 2,852,862
Salaries and Wages Payable 3,658,524
Deposits Payable 2,644,670
Deferred Revenue 1,151,488 24,000
Long-Term Liabilities - Current Portion:
Bonds Payable 2,705,000
Capital Leases Payable 246,196
Compensated Absences Payable 440,595

Gifts Annuities Payable 14,360
Total Current Liabilities
18,995,146 142,544

FLORIDA GULF COAST UNIVERSITY
A COMPONENT UNIT OF THE STATE OF FLORID
A
STATEMENT OF NET ASSETS
June 30, 2010

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FEBRUARY 2011 REPORT NO. 2011-106
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University Component
Unit
LIABILITIES (Continued)
Noncurrent Liabilities:
Bonds Payable 123,078,115$ $
Loan Payable 5,000,000 7,000,000
Capital Leases Payable 416,612
Compensated Absences Payable 6,584,836
Other Postemployment Benefits Payable 3,772,000
Gift Annuities Payable 136,141
Deferred Revenue 24,000
Other Noncurrent Liabilities 52,512
Total Noncurrent Liabilities
138,851,563 7,212,653

TOTAL LIABILITIES

157,846,709
7,355,197
NET ASSETS
Invested in Capital Assets, Net of Related Debt 280,117,419 4,021
Restricted for Nonexpendable:
Endowment 42,227,890
Restricted for Expendable:
Debt Service 1,000,000
Loans 518,611
Capital Projects 25,827,262
Other 3,976,256 11,178,975
Unrestricted 31,462,034 5,061,693

TOTAL NET ASSETS
342,901,582 58,472,579
TOTAL LIABILITIES AND NET ASSETS
500,748,291$ 65,827,776$
The accompanying notes to financial statements are an integral part of this statement.
FLORIDA GULF COAST UNIVERSITY
A COMPONENT UNIT OF THE STATE OF FLORID
A
STATEMENT OF NET ASSETS
(
Continued
)
June 30, 2010


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FEBRUARY 2011 REPORT NO. 2011-106
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University Component
Unit
REVENUES
Operating Revenues:
Student Tuition and Fees, Net of Scholarship
Allowances of $ 17,529,969 35,107,487$ $
Federal Grants and Contracts 5,890,714
State and Local Grants and Contracts 2,551,548
Nongovernmental Grants and Contracts 4,227,919
Sales and Services of Auxiliary Enterprises 23,433,722
Gifts and Donations 4,159,350
Rental Income and Other 1,355,147
Other Operating Revenues 1,199,698
Total Operating Revenues
72,411,088 5,514,497
EXPENSES
Operating Expenses:
Compensation and Employee Benefits 86,226,933
Services and Supplies 28,020,181
Utilities and Communications 4,461,580
Scholarships, Fellowships, and Waivers 14,098,661 1,331,816
Depreciation 11,735,957 6,828
General and Administrative 1,044,289
University Support 1,182,154
Program Services 3,745,520
Other Operating Expenses 500,000
Total Operating Expenses
144,543,312 7,810,607

Operating Loss
(72,132,224) (2,296,110)
NONOPERATING REVENUES (EXPENSES)
State Appropriations 46,319,727
State Appropriated American
Recovery and Reinvestment Act Funds 3,573,134
Federal and State Student Financial Aid 21,536,585
Investment Income 3,096,656 4,316,567
Interest on Capital Asset-Related Debt (3,994,341) (186,242)
Other Nonoperating Expenses (228,106)
Net Nonoperating Revenues
70,303,655 4,130,325
Income (Loss) Before Other Revenues, Expenses,
Gains, or Losses
(1,828,569) 1,834,215
Capital Appropriations 8,441,266
Capital Grants, Contracts, Donations, and Fees 2,017,565 2,898,862
Increase in Net Assets
8,630,262 4,733,077
Net Assets, Beginning of Year 327,821,929 53,739,502
Adjustment to Beginning Net Assets 6,449,391
Net Assets, Beginning of Year, as Restated
334,271,320 53,739,502
Net Assets, End of Year
342,901,582$ 58,472,579$
T
he accompanying notes to financial statements are an integral part of this statement.
FLORIDA GULF COAST UNIVERSITY
A COMPONENT UNIT OF THE STATE OF FLORID
A

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
For the Fiscal Year Ended June 30, 2010

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FEBRUARY 2011 REPORT NO. 2011-106
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University
CASH FLOWS FROM OPERATING ACTIVITIES
Tuition and Fees, Net 35,120,367$
Grants and Contracts 12,941,379
Sales and Services of Auxiliary Enterprises 16,576,530
Other Operating Receipts 489,808
Payments to Employees (83,718,921)
Payments to Suppliers for Goods and Services (31,334,755)
Payments to Students for Scholarships and Fellowships (14,098,661)
Net Loans Issued to Students (14,208)
Net Cash Used by Operating Activities
(64,038,461)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
State Appropriations 46,484,520
State Appropriated American
Recovery and Reinvestment Act Funds 3,573,134
Federal and State Student Financial Aid 21,536,585
Net Change in Funds Held for Others 113,829
Net Cash Provided by Noncapital Financing Activities
71,708,068

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Capital Appropriations 36,394,250
Purchase or Construction of Capital Assets (45,013,188)
Principal Paid on Capital Debt and Leases (2,684,431)
Interest Paid on Capital Debt and Leases (4,008,926)
Net Cash Used by Capital and Related Financing Activities
(15,312,295)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Investments, Net (3,681,434)
Investment Income 1,402,438
Net Cash Used by Investing Activities
(2,278,996)

Net Decrease in Cash and Cash Equivalents
(9,921,684)
Cash and Cash Equivalents, Beginning of Year 15,212,367

Cash and Cash Equivalents, End of Year
5,290,683$

FLORIDA GULF COAST UNIVERSITY
A COMPONENT UNIT OF THE STATE OF FLORID
A
STATEMENT OF CASH FLOWS
For the Fiscal Year Ended June 30, 2010

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University
RECONCILIATION OF OPERATING LOSS
TO NET CASH USED BY OPERATING ACTIVITIES
Operating Loss (72,132,224)$
Adjustments to Reconcile Operating Loss
to Net Cash Used by Operating Activities:
Depreciation Expense 11,735,957
Change in Assets and Liabilities:
Receivables, Net (7,214,646)
Other Current Assets (300,000)
Accounts Payable 1,442,563
Salaries and Wages Payable 311,724
Deposits Payable (97,538)
Compensated Absences Payable 228,287
Deferred Revenue 19,416
Other Postemployment Benefits Payable 1,968,000
NET CASH USED BY OPERATING ACTIVITIES
(64,038,461)$
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
1,665,000$
The accompanying notes to financial statements are an integral part of this statement.
Unrealized gains were recognized as increases in investment income on the
statement of revenues, expenses, and changes in net assets, but are not cash
transactions for the statement of cash flows.
FLORIDA GULF COAST UNIVERSITY
A COMPONENT UNIT OF THE STATE OF FLORID
A
STATEMENT OF CASH FLOWS
(
Continued

)
For the Fiscal Year Ended June 30, 2010



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FLORIDA GULF COAST UNIVERSITY
A COMPONENT UNIT OF THE STATE OF FLORIDA
NOTES TO FINANCIAL STATEMENTS
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UNE 30, 2010


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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reporting Entity
. The University is a separate public instrumentality that is part of the State university
system of public universities, which is under the general direction and control of the Florida Board of
Governors. The University is directly governed by a Board of Trustees (Trustees) consisting of 13 members.
The Governor appoints six citizen members and the Board of Governors appoints five citizen members.
These members are confirmed by the Florida Senate and serve staggered terms of five years. The chair of
the faculty senate and the president of the student body of the University are also members. The Board of
Governors establishes the powers and duties of the Trustees. The Trustees are responsible for setting
policies for the University, which provide governance in accordance with State law and Board of Governors’
Regulations. The Trustees select the University President. The University President serves as the executive
officer and the corporate secretary of the Trustees, and is responsible for administering the policies
prescribed by the Trustees.
Criteria for defining the reporting entity are identified and described in the Governmental Accounting

Standards Board’s Codification of Governmental Accounting and Financial Reporting Standards, Sections 2100 and
2600. These criteria were used to evaluate potential component units for which the primary government is
financially accountable and other organizations for which the nature and significance of their relationship
with the primary government are such that exclusion would cause the primary government’s financial
statements to be misleading or incomplete. Based on the application of these criteria, the University is a
component unit of the State of Florida, and its financial balances and activity are reported in the State’s
Comprehensive Annual Financial Report by discrete presentation.
Blended Component Unit
. Based on the application of the criteria for determining component units, the
Florida Gulf Coast University Financing Corporation (Corporation) is included within the University
reporting entity as a blended component unit. The Corporation was incorporated on April 11, 2003, as a
not-for-profit Florida corporation under the provisions of Chapter 617, Florida Statutes, and is a
direct-support organization of the University. The Corporation was established to receive, hold, invest, and
administer property and to make expenditures for the exclusive benefit of the University. Due to the
substantial economic relationship between the Corporation and the University, the financial activities of the
Corporation are included in the University’s financial statements. An annual audit of the Corporation is
conducted by independent certified public accountants and is submitted to the Auditor General and the
University Board of Trustees. Additional information on the Corporation, including copies of audit reports,
is available by contacting the University Controller’s Office.
Discretely Presented Component Unit
. Based on the application of the criteria for determining
component units, the Florida Gulf Coast University Foundation, Inc. (Foundation), as provided for in
Section 1004.28, Florida Statutes, and Board of Governors Regulation 9.011, is included within the
University reporting entity as a discretely presented component unit. The Foundation was incorporated on
April 19, 1993, as a not-for-profit Florida corporation under the provisions of Chapter 617, Florida Statutes,
and is a direct-support organization of the University. Its purpose is to encourage, solicit, collect, receive,
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FEBRUARY 2011 REPORT NO. 2011-106
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A COMPONENT UNIT OF THE STATE OF FLORIDA
NOTES TO FINANCIAL STATEMENTS (C
ONTINUED)
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and administer gifts and bequests of property and funds for scientific, educational, and charitable purposes,
all for the advancement of the University and its objectives. An annual audit of the Foundation is conducted
by independent certified public accountants and is submitted to the Auditor General and the University
Board of Trustees. Additional information on the Foundation, including copies of audit reports, is available
by contacting the University Controller’s Office.
Basis of Presentation
. The University’s accounting policies conform with accounting principles generally
accepted in the United States of America applicable to public colleges and universities as prescribed by the
Governmental Accounting Standards Board (GASB). The National Association of College and University
Business Officers (NACUBO) also provides the University with recommendations prescribed in accordance
with generally accepted accounting principles promulgated by GASB and the Financial Accounting
Standards Board (FASB). GASB allows public universities various reporting options. The University has
elected to report as an entity engaged in only business-type activities. This election requires the adoption of
the accrual basis of accounting and entitywide reporting including the following components:
 Management’s Discussion and Analysis
 Basic Financial Statements:
 Statement of Net Assets
 Statement of Revenues, Expenses, and Changes in Net Assets
 Statement of Cash Flows
 Notes to Financial Statements
 Other Required Supplementary Information
Basis of Accounting

. Basis of accounting refers to when revenues, expenses, and related assets and
liabilities are recognized in the accounts and reported in the financial statements. Specifically, it relates to the
timing of the measurements made, regardless of the measurement focus applied. The University’s financial
statements are presented using the economic resources measurement focus and the accrual basis of
accounting. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and
exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, losses,
assets, and liabilities resulting from nonexchange activities are generally recognized when all applicable
eligibility requirements, including time requirements, are met.
The University’s blended and discretely presented component units use the accrual basis of accounting
whereby revenues are earned and expenses are recognized when incurred, and follow GASB standards of
accounting and financial reporting.
The University applies all applicable GASB pronouncements and, in accordance with GASB Statement
No. 20, Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary
Fund Accounting, has elected to apply only those FASB pronouncements issued on or before
November 30, 1989, not in conflict with GASB standards.
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A COMPONENT UNIT OF THE STATE OF FLORIDA
NOTES TO FINANCIAL STATEMENTS (C
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Significant interdepartmental sales between auxiliary service departments and other institutional departments
have been accounted for as reductions of expenses and not revenues of those departments.
The University’s principal operating activities consist of instruction, research, and public service. Operating

revenues and expenses generally include all fiscal transactions directly related to these activities as well as
administration, operation and maintenance of capital assets, and depreciation on capital assets.
Nonoperating revenues include State appropriations, Federal and State student financial aid, investment
income (net of unrealized gains or losses on investments), and revenues for capital construction projects.
Interest on capital asset-related debt is a nonoperating expense.
The statement of net assets is presented in a classified format to distinguish between current and noncurrent
assets and liabilities. When both restricted and unrestricted resources are available to fund certain programs,
it is the University’s policy 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 net assets is presented by major sources and is reported
net of tuition scholarship allowances. Tuition scholarship allowances are the differences between the stated
charge for goods and services provided by the University and the amount that is actually paid by a student or
a third party making payment on behalf of the student. The University applied “The Alternate Method” as
prescribed in NACUBO Advisory Report 2000-05 to determine the reported net tuition scholarship
allowances. Under this method, the University computes these amounts by allocating the cash payments to
students, excluding payments for services, on a ratio of total aid to the aid not considered third-party aid.
The statement of cash flows is presented using the direct method in compliance with GASB Statement
No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities
That Use Proprietary Fund Accounting.
Cash and Cash Equivalents - University
. Cash and cash equivalents consist of cash on hand, cash in
demand accounts, and amounts held by a trustee for the Florida Gulf Coast University Financing
Corporation (Corporation). University cash deposits are held in banks qualified as public depositories under
Florida law. All such deposits are insured by Federal depository insurance, up to specified limits, or
collateralized with securities held in Florida’s multiple financial institution collateral pool required by
Chapter 280, Florida Statutes. Cash and cash equivalents that are externally restricted to make debt service
payments, maintain sinking or reserve funds, or to purchase or construct capital or other restricted assets, are
classified as restricted.
The amount reported as restricted cash and cash equivalents for the University at June 30, 2010, includes at
fair value $4,779,662 of Corporation moneys held in the State Treasury SPIA investment pool representing

ownership of a share of the pool, not the underlying securities. The SPIA carried a credit rating of Af by
Standard & Poor’s and had an effective duration of 1.81 years at June 30, 2010. The Corporation relies on
policies developed by the State Treasury for managing interest rate risk or credit risk for this investment
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