The Fresno State "Audit" We Do Have

Craig Bernthal

Somewhere in the dark corners of the Henry Madden Library, there is a pdf version of an Independent Auditor's Report of June 30, 2011. Chris Henson tracked this down, not without effort, and tells me that she was told by the librarian who finally found it that several hard copies are to be distributed around the campus, though this has not occurred yet. The report, done by KMPG, LLP, is interesting. I'd like to copy and share whole pages, but the pdf will not allow me to copy any portion of it. When I try, I get a little box that tells me:

"Without the owner password, you do not have permission to copy portions of this document." Then it gives me the chance to enter the "owner password." Thus, being a mere professor and taxpayer, I am somewhat thwarted. But not entirely, since if you got notice of this blog through email, you also received the audit as an attachment.

I did find two pages of particular interest, and I will share some of the information on those.

On page 7, there is a "Condensed Summary of Revenues, Expenses, and Changes in Net Assets" for the years ended June 30, 2010 and 2011. After the operating revenues (mostly student tuition), operating expenses, and non-operating revenues are toted up, Fresno State is in the black by $861,007 for 2010. But for 2011 Fresno State is in the red by $20,093,656. I don't know that there is a problem with running in the hole by $20 million in 2011, but this is the kind of figure that makes me want to know more. Why did we run a deficit last year? How does that deficit affect budgeting at Fresno State?  For full consultation to take place, the faculty not only needs this information, but it needs explanation.

Page 12 also has interesting data. It provides an account of "Long-Term Debt Obligations" of Fresno State. Our total long-term debt at the end of 2011 was $94,964,876. This debt was apparently floated mainly through "Systemwide Revenue Bonds."

The bond issues show the following loan amounts:

Series 2004A Union:            $3,325,000
Series 2005A Union:           $15,950,000
Series 2005A Aux Org       $68,835,000

Then there is the Swimming Pool Loan:   $3,881,250
The Koch Financial--Parking Lot-- Photo Voltaic Project:  $3,403,412.

I don't want to imply that there is anything fishy about the loans, or that Fresno State ought not to have some debt. I do want to say, the faculty ought to understand what the loans are for and how they affect budgeting on the academic side. For instance, is the $68,835,000 for the library? It's my best guess, but I can only guess. Another question: what is the interest rate on the bonds?

If you want to know more about the auditors, KMPG, here is a link:

KMPG

I should add that the KMPG audit is based on other audits which KMPG did not do, but which were provided to it by the FSU administration. See the opening paragraph of KMPG's letter to Dr. John Welty:

"We have audited the accompanying financial statements of California State University, Fresno (the University) . . . which collectively comprise the University's financial statements as listed in the table of contents. These financial statements are the responsibility of the University's management. Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the aggregate discretely presented component units of the University. Those financial statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it related to the amounts included for the discretely presented component units, is based solely on the reports of the other auditors." (my italics)