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Edinboro University of
Pennsylvania of the StateI
System of Higher EducationI
Financial Statements and

.Supplementary

InformationI
June 30, 2010 and 2009

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Edinboro University of Pennsylvania of the State System of Higher Education
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Table of ContentsI
June 30, 2010 and 2009

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Independent Auditors' Report

1

Financial StatementsI
Balanae Sheet -Primary Institution

3

Statement of Revenues, Expenses, and Changes in Net Assets -Primary Institution

5I

Statement of Cash Flows -Primary Institution

6I

Combined Balance Sheet -Component Units

7

Combined Statement of Revenues, Expenses, and Changes in Net Assets Component Units

8I

Notes to Financial Statements

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Supplementary Information

III

Schedule of Funding Progress for the System Plan and REHP (OPEB)

36

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.discretely
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.financial
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Independent
Auditors'Report
Council of Trustees
Edinboro University of Pennsylvania
of the S,ate System of Higher Education
have

audited

the

accompanying

:
!:
basic financial

statements

of Edinboro

University

of

Pennsylvania of the State System of Higher Education (the "University") and its aggregate
presented component units as of and for the years ended June 30, 2010 and 2009.
These financial statements are the responsibility of the University's management. Our responsibility
is to express an opinion on these financial statements based on our audits. We did not audit the
statements
of Edinboro University of Pennsylvania Alumni Association,
Edinboro
University of Pennsylvania Student Government Association, or Edinboro University Services, Inc.,
which collectively represent 5%, 44% and 49% of the assets, net assets and revenues of the
presented component units for 2010, and 9%, 44%, and 69%, respectively, of the assets,
net assets and revenues of the discretely presented component units for 2009. Those financial
statements were audited by other auditors whose reports thereon have been furnished to us, and
opinion, insofar as it relates to the amounts included for Edinboro University of Pennsylvania
Alumni Association, Edinboro University of Pennsylvania Student Government Association, and
Edinboro University Services, Inc., is based on the reports of the other auditors.

-We

conducted our audits in accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit
.includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
~
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
.presentation.
We believe that our audits and the reports of the other auditors provide a reasonable
~
basis for our opinion.

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In our opinion, based on our audits and the reports of the other auditors, the financial statements
referred to above present fairly, in all material respects, the respective financial position of the
University and its aggregate discretely presented component units as of June 30, 2010 and 2009,.
and the respective changes in financial position and cash flows, where applicable, thereof, for the
years then ended in conformity with accounting principles generally accepted in the United States of
America.

.The

University has not presented Management's Discussion and Analysis (MD&A) that accounting
principles generally accepted in the United States of America have determined is necessary to
supplement, although not required to be part of, the basic financial statements.

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The Schedule of Funding Progress for the System Plan and REHP (OPEB) on page 36 is not a
required part of the basic financial statements but is supplementary information required by
accounting principles generally accepted in the United State of America. We have applied certain
limited procedures, which consisted principally of inquiries of management regarding the methods
of measurement and presentation of the required supplementary information. However, we did not
audit the information and express no opinion on it.

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Williamsport, Pennsylvania
December 6,2010

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Balance Sheet -Primary
June30,2010and2009

Institution

2010

2009

.,..

Assets
Current Assets
Cash and cash equivalents:
Unrestricted cash and cash equivalents
Restricted cash and cash equivalents

$

Tbtal cash and cash equivalents
Accounts receivable:
Governmental grants and contracts
Students, net of allowance for doubtful
accounts of $2,684,716 in 2010 and
$2,513,675 in 2009
Other
Investment income receivable
Inventory
Prepaid expenses
Loans receivable, net of allowance for
doubtful accounts of $507,560 in 2010
and $495,993 in 2009
Other current assets
Total current assets
Noncurrent Assets
Endowment investments
Loans receivable
Capital assets, net
Other assets
Total noncurrent assets
Total assets

See notes to financial statements

3
--

46,785,758
1,824,634

$

45,265,546
2,039,946

48,610,392

47,305,492

3,981,039

1,054,477

2,059,475
766,767
31,904
56,758
175,865

1,667,602
558,887
67,861
60,025
80,504

238,582
1,483,645

289,430
567,337

57,404,427

51,651,615

4,754,326
1,363,790
67,531,534
459,702

4,443,706
1,370,988
71,452,866
504,176

74,109,352

77,771,736

$ 131,513,779

$ 129,423,351

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Edinboro University of Pennsylvania of the State System of Higher Education
Balance Sheet -Primary Institution-June
30, 2010 and 2009-";'

2010
Liabilities
-Current

.Current

..Other

-Net

2009

and Net Assets

Liabilities.Accounts
payable and accrued expenses
Deferred revenue
Students' deposits
Workers' compensation
absences and postretirement
benefit obligations
portion of bonds payable, net
Due to component units
Due to PASSHE, Academic FacilitiesI
Renovation Bond Program (AFRP)
current liabilities

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$

current liabilities

13,412,489
2,665,209
277,972
297,196
3,986,515
2,495,127
231,264
275,297
441,894

$

9,294,248~
2,622,419
255,116
266,451-Compensated
3,841,297
2,682,327~
154,646
238,010
445,270-Total

24,082,963

19,799,784

Noncurrent

Liabilities
revenue
Workers' compensation
Compensated absences and postretirement
obligations

78,068
391,495

106,760
266,469

56,687,368

52,794,808

Bonds payable
Due to PASSHE, AFRP
noncurrent liabilities

32,053,439
3,705,024
1,905,763

34,548,972
3,861,125-Other
1,943,008

94,821,157

93,521,142-Total

Total noncurrent liabilities
liabilities

118,904,120

113,320,926

29,646,446

30,909,154

3,004,180

2,974,468

Assets
Invested in capital assets, net of related debt
Restricted for:-Nonexpendable,
Scholarships and fellowships
Expendable:-Scholarships
and fellowships
Student loans
Unrestricted
net assets
liabilities and net assets

-See

notes to fin~nCial statements

~-

2,402,323
313,616
(22,756,906)

2,301,774
342,449
(20,425,420)-Total

12,609,659

16,102,425-Total

$ 131,513,779

$ 129,423,351

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Edinboro University of Pennsylvania of the State System of Higher Education

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Years Ended June 30, 2010 and 2009I

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.Interest
.Investment

Statement

of Revenues,

Expenses,

and Changes

in Net Assets

-Primary

Institution

.,.

2010

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Operating Revenues
,,'
Tuition and fees
Less scholarship discounts and allowances

$

56,623,612
22,723,742

Net tuition and fees
Governmental grants and contracts:
Federal
State
Nongovernmental
grants and contracts
SaleS and services of educational departments,
Auxiliary enterprises
Other revenues

net

Total operating revenues
Operating ExpensesI
Instruction
Research
Public service
Academic support
Student services
Institutional support
Operations and maintenance
Depreciation
Student aid
Auxiliary enterprises

of plant

operating expenses
Operating

Nonoperating
Revenues (Expenses)
State appropriations, general and restricted
ARRA state fiscal stabilization funds
Gifts for other than capital purposes
expense on capital asset-related debt
income, net of related investment
expense of $142,360 in 2010 and $156,476 in 2009
Other nonoperating revenue
Loss on disposal of assets
revenues,

in net assets

Ending

32,310,584

13,997,375
8,207,171
279,915
1,113,683
16,013,178
1,206,169

9,476,402
8,251,756I
201,607
1,119,179
16,636,713
807,640

74,717,361

68,803,881

45,473,227
72,994
205,238
11413218
10:336: 104
12,623,386
8,463,641
8,496,914
958,503
12,420,754

42,640,278
94,676
377,183
11772430
10:007:741
12,605,078
8,46,6,429I
8,018,753
1,024,763
12,955,076-Total

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107,962,407
(39,158,526)

25,812,507
4,014,4622,084,131
(1,620,663)

28,550,436
1,764,556
(1,794,930)

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965,023
172,978
(710,944)
28,947,119I
(10,211,407)

250,110
111,193

66,775
747,340

361,303

814,115-Decrease

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(3,492,766)

(9,397,292)

16,102,425
$

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(35,746,618)

-(3,854,069)

Total other revenues

Net Assets,

33,899,870

31,892,549

Other RevenuesI
Capital gifts and grants
State appropriations, capital

Beginning

49,314,491
17,003,907

1,508,220
151,740
(57,848)

net

Loss before other revenues

Net Assets,

$

110,463,979

loss

Nonoperating

2009

12,609,659

25,499,717
$

16,102,425-See

notes to fin~nCial statements

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Edinboro University of Pennsylvania of the State System of Higher Education
~

Statement

of Cash Flows -Primary

InstitutionI

Years EndedJune 30,2010 and 2009I

2010
Cash Flows from Operating
Activities
Net tuition and fees
Grants and contracts
Payments to suppliers for goods and services
Payments to employees
Loans issued to students
Loans collected from students
Student aid
Auxiliary enterprise charges
Sales and services of educational departments
Other operating receipts

$

33,869,784
19337486
(20:749:818)
(72,046,818)
(317,709)
375755
(958:503)
16,005,632
747752
433'542
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N~i cash used in operating activities
Cash Flows from Noncapital
Financing ActivitiesI
State appropriations
Gifts for other than capital purposes
PLUS, Stafford, and other loans receipts (non-Perkins)
PLUS, Stafford, and other loans disbursements (non-Perkins)
Agency transactions, net
Other
Net cash provided by noncapital financing activities
Cash Flows from Capital Financing Activities
Proceeds from issuance of bonds
Capital
appropriations
Costs associated
with abandonment of building

2009
32,674,326I
18033582
(25:727:592)
(71,018,866)
(701,843)I
429313
(1,024: 763)
16,710,407
1 377 566
'601'756
---,.-- I

$

(23,302,897)

(28,646,114)

29,826,969
2,084,131
46,233,487
(46,233,487)
1,710
151740
---,.

28,550,436
1,764,556
49,108,077
(49,108,077)
(20,480)
172978
,- --

32,064,550

30,467,490

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186,010
3,999,518
111193
747340
,
-(542:947)

Capital
andsales
grantsof capital
receivedassets
Proceedsgifts
from

250 ' 110-204'495

66775I

Purchases of capital assets
Principal paid on debt including AFRP

(4,633,430)
(2,833,439)

(10,709:222)
(5,146,187)

Interest paid on debt

(1,770,754)

(1,929,520)I

Net cash used in capital financing activities

(8,690,310)

(13,309,748)

2,237,073
1,143,580
(2,147,096)

876,130
1,675,579
(699,108)

Net cash provided by investing activities

1,233,557

1,852,601I

Net increase (decrease)

1,304,900

(9,635,771)

47,305,492

56,941,263I

Cash Flows from Investing ActivitiesI
Proceeds from sales of investments
Interest income
Purchase of investments

in cash and cash equivalents

Cash and Cash Equivalents,

Beginning

Cash and Cash Equivalents,

Ending

Reconciliation
of Operating
in Operating ActivitiesI
Operating

$

$
to

reconcile

$

47,305,492

Loss to Net Cash Used

loss

Adjustments

48,610,392

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operating

loss

to

net

cash

used

(35,746,618)

$

(39,158,526)

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operating activities:
Depreciation expense
Changes in assets and liabilities:
Receivables, net
Inventories
Other assets
Accounts payable and accrued expenses
Deferred revenue
Students' deposits
Compensated absences
Loans to students
Other liabilities including workers' compensation
Net cash used in operating activities

$

Seenotesto fin~nCial
statements

8,496,914

8,018,753

(3,546,573)
3,267
(879,259)
4,123,154
14,098
22,856
276,159
58,046
3,875,059

714,344
36,712
(25,928)I
(1,651,186)
(87,307)
23,621
155,401
(272,530)I
3,600,532

(23,302,897)

$

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(28,646_114)

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.Current

-Noncurrent

.Permanently

..
-

Combined

Balance

Units.Years

Sheet -Component

Ended June 30, 2010 and 2009.""

2010

2009

-.

,;

Assets

Assets
Cash and cash equivalents
Trustee held funds
Accounts receivable
Inventory
Prepaid expenses
Du~ from University
Other current assets

$

current assets
Noncurrent Assets.
Endowment investments
Trustee held funds
Capital assets, net
Deferred financing costs
assets
Total noncurrent assets
assets

5,333,841
3,089,755
58,570
774,979
30,557
231,244
2,873,114

$

5,472,544.
3,811,031
68,211
729,827
44,965.
154,646
2,388,546.Total

12,392,060

12,669,770

11,094,782
64,610,273
54,781,525
875,862
1,127,368

9,035,326
12,499,552
47,185,108
496,824.Other
1,877,328

132,489,810

71,094,138.Total

:::;:~~~~~~

~=::~~;;:;;:-Liabilities

and Net Assets
Current Liabilities.
Accounts payable and accrued expenses
Other current liabilities

$

Total current liabilities

5,554,476
1,362,538

$

6,917,014

5,687,967
456,697
6,144,664

Liabilities
Funds under investment management for.
Edinboro Unversity of Pennsylvania
Other noncurrent liabilities

4,755,146
117,648,152

4,438,706
57,391,416.Total

noncurrent liabilities

122,403,298

61,830,122

129,320,312

67,974,786

Net Assets
Unrestricted
Temporarily restricted
restricted

6,750,106
2,585,400
6,226,052

6,892,538
3,124,415
5,772,169

Total net assets

15,561,558

Total liabilities

liabilities and net assets

$

notes to fin~nCial statements

144,881,870

.

15,789,122.Total
$

83,763,908-See

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Edinboro University of Pennsylvania of the State System of Higher Education
Combined Statement of Revenues, Expenses,
Years Ended June 30, 2010 and 2009I

and Changes

in Net Assets

";'

-Component

2010

UnitsI

2009

I

Changes in Unrestricted
Net Assets
Revenues and other additions:
Rental income
University store and services
Net assets released from restrictions
Student activity fees
Other revenues
Contributions
Special activities
Unrealized gain on investments
Investment income

$

Total revenues and other additions

5,646,981
4,898,743
1,439,420
1,164,797
516,465
322,640
173,028
132,80097,392

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$

1,264,125
4,731,109I
1,441,098
1,034,366
511,682
217,754I
55,352
683,774I

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Expenses and other deductions:
Program expenses
University store
Supporting services expenses
Management and general
Special activities

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8,687,828
3,421,219
1,573,485
537,847
85,301

Scholarships
Other expenses
Unrealized loss on investments

3,701,281
3,260,793
1,153,897
489,808
70,395

153,962
75,056
-647,767I

Total expenses and other deductions
(Decrease) Increase in unrestricted

14,534,698
net assets

88,399I
51,751

9,464,091

(142,432)

475,169I

563,599
291,941
105,555
(64,484)
(1,435,626)

472,470
28,613I
(71,005)
(66,493)
(1,447,248)

(539,015)

(1,083,663)

493,976
(36,299)
(3,794)

421,119
(100,004)
6,150

Increase in permanently restricted net assets

453,883

327,265I

Decrease in net assets

(227,564)

(281,229)

15,789,122

16,070,351I

Changes. in !emporarily
Restricted Net Assets
Contributions and support
Investment income
Unrealized gain (loss) on investments
Other reductions, net
Satisfaction of donor restrictions
Decrease in temporarily restricted net assets
Changes in Permanently Restricted
Contributions
Other changes, net
Satisfaction of donor restrictions

Net Assets,

Beginning

Net Assets,

Ending

Net Assets

$

15,561,558

See
notes
tofin~ncial
st~tements

$

,

15,789,122

-.

Notes to Financial StatementsI
June 30, 2010 and 2009I

1. Nature of Operation~
Organization

and Summary

of Significant

Accounting

Policies

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Edinboro University of Pennsylvania of the State System of Higher Education (the
"University"), a public four-year institution located in Edinboro, Pennsylvania, was founded inI
1857. The University is one of fourteen universities of the State System of Higher Education
("PASSHE"). PASSHE was created by the State System of Higher Education Act of
November 12,1982, P.L. 660, No. 188, as amended ("Act 188"). PASSHE is a componentI
~nit of the Commonwealth of Pennsylvania (the "Commonwealth").

Reporting EntityI
In accordance with Government Accounting Standards Board ('GASB') Statement No. 39,
Determining Whether Certain Organizations Are Component Units, an amendment of
GASB 14, The Financial Reporting Entity, it has been determined that Edinboro UniversityI
Foundation (the "Foundation"), Edinboro University of Pennsylvania Student Government
Association (the "Association"), Edinboro University Services, Inc. ("USI") and Edinboro
University of Pennsylvania Alumni Association ("Alumni") should be included in theI
University's financial statements as discretely presented component units. A component unit
is a legally separate organization for which the primary institution is financially accountable
or closely related.I
The Foundation is a legally separate, tax-exempt entity that acts primarily as a fund-raising
organization to supplement the resources that are available to the University in support of itsI
programs. Although the University does not control the timing or amount of receipts from the
Foundation, the majority of resources or incomes thereon that the Foundation holds are
restricted to the activities of the University by the donors. Because these restricted
resources held by the Foundation can only be used by, or for the benefit of, the University,I
the Foundation is considered a component unit of the University and is included within the
University's financial reporting entity. The financial activity of the Foundation is presented as
of June 30, 2010 and 2009.I
During the years ended June 30, 2010 and 2009, the Foundation contributed $575,000 and
$427,800, respectively, to the University for both restricted and unrestricted purposes.I
The Association is a legally separate, tax-exempt entity responsible for the planning and
sponsoring of University social and cultural events and providing budget oversight to allI
student organizations. Although the University does not control the resources of the
Association, the activities of the Association are solely for the benefit of the University and
its students. Because these resources are held by the Association and can only be used toI
benefit the University and its students, the Association is considered a component unit of the
University and is included within the University's financial reporting entity. The financial
activity of the Association is presented as of June 30, 2010 and 2009.I
During the year ended June 30, 2010, the Association contributed $125,100 to the
University for both restricted and unrestricted purposes. No contributions were made to the
University during the year ended June 30, 2009.

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Edinboro University of Pennsylvania of the State System of Higher Education
Notes to Financial StatementsI
June 30, 2010 and 2009

"I
1. Nature of Operations

~nd Summary of Significant

Accounting

Policies

(Continued)

USI is a legally separate, tax-exempt entity that is responsible for the University bookstoreI
as well as the provision of a variety of other services such as recreation, vending, cable and
internet, which supplement services provided by the University. Although the University
does not control the resources of USI, the activities of USI are solely for the benefit of the
University and its students. Because these resources are held by USI and can only be used
to benefit the University and its students, USI is considered a component unit of the
University and is included within the University's financial reporting entity. The financial
activity of USI is presented as of June 30, 2010 and 2009.

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r.

During the years ended June 30, 2010 and 2009, USI contributed $589,800 and $156,400,
respectively, to the University for both restricted and unrestricted purposes.I
Alumni is a legally separate, tax-exempt entity that serves to promote the general interests
and welfare of the University by making gifts, scholarships, grants and other financial
assistance available for the advancement of higher education. Although the University does
not control the resources of Alumni, the activities of Alumni are solely for the benefit of the
University. Because these resources are held by Alumni and can only be used to benefit the
University, Alumni is considered a component unit of the University and is included within
the University's financial reporting entity. The financial activity of Alumni is presented as of
June 30, 2010 and 2009.I
During the years ended June 30, 2010 and 2009, the Alumni contributed $84,600 and
$85,500, respectively, to the University for both restricted and unrestricted purposes.I
Complete financial statements for the component units may be obtained at the University's
administrative office.I
Measurement

Focus, Basis of Accounting

and Basis of Presentation

The University functions as a business-type activity, as defined by GASB.I
The accompanying financial statements have been prepared using the economic resources
measurement focus and the accrual basis of accounting in accordance with accounting
principles generally accepted in the United States of America, as prescribed by GASB.
Revenues are recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Grants and similar items areI
recognized as revenue as soon as all eligibility requirements have been met. ~he University
applies only the Financial Accounting Standards Board pronouncements Issued before
November 30, 1989, except for those that conflict with GASB pronouncements. I

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Notes to Financial Statements
June 30, 2010 and 2009

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1. Nature of Operations

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Operating

,and Summary

of Significant

Accounting

Policies

(Continued)

Revenues-Operating

revenues of the University consist of tuition, all academic, instructional, and other
student fees, grants and contracts, sales and services of educational activities and auxiliary
enterprise revenues. In addition, governmental and private grants and contracts in which the
grantor receives equal value for the funds given to the University are recorded as operating
revenue. All expenses, with the exception of interest expense, loss on the sale ofI
investments, loss on the disposal of assets, and extraordinary expenses are recorded as
operating expenses. Appropriations, gifts, interest income, capital grants, gains on the sale
of investments, gains on the disposal of assets, parking and library fines, and governmental
and private research grants and contracts in which the grantor does not receive equal value
for the funds given to the University are reported as nonoperating revenue.
Scholarship

Discounts

and Allowance

Student tuition and fee revenues, and certain other revenues from students, are reported net
of scholarship discounts and allowances in the statement of revenues, expenses and
changes in net assets. Scholarship discounts and allowances are the difference between
the stated charge for goods and services provided by the University and the amount that is
paid by students and/or third parties making payments on students' behalf. To the extentI
that revenues from such programs are used to satisfy tuition and fees and other student
services, the University has recorded a scholarship discount and allowance.

NetAssets
The University maintains the following net asset classifications:
Invested in capital assets, net of related debt: Capital assets, net of accumulated
depreciation and outstanding principal balances of debt attributable to the acquisition,
construction, repair, or improvement of those assets.I
Restricted -nonexpendable:
Net assets subject to externally
requiring that they be maintained by the University in perpetuity.

imposed

conditions

Restricted -expendable:
Net assets whose use is subject to externally imposed
conditions that can be fulfilled by the actions of the University or by the passage of time.I
Unrestricted: All other categories of net assets. Unrestricted net assets
designated for specific purposes by the University's Council of Trustees.I
When both restricted and unrestricted funds are available for expenditure,
which funds are used first is left to the discretion of the University.I
Cash Equivalents

may be

the decision as to

and Investments

The University considers all demand and time deposits and money market funds to be cashI
equivalents. Investments purchased are stated at fair value. Investments received as gifts
are recorded at their fair value as of the date of the gift.

I

..,.,,~11
I

.Inventory

-Equipment

8

Edinboro

University -- of Pennsylvania

of the State System of Higher Education

Notes to Financial Statements-June
30, 2010 and 2009I

1. Nature of Operations,and
Accounts

Summary of Significant

Accounting

Policies

(Continued)

and Loans Receivable-Accounts

and loans receivable consist of tuition and fees charged to current and former
students,
amounts due from federal and state governments
in connection withI
reimbursements of allowable expenditures made pursuant to grants and contracts and other
miscellaneous sources..Accounts
and loans receivable are reported at net realizable
they are determined to be uncollectible based upon
individual accounts. The allowance for doubtful accounts
University's historical losses and periodic review of individual

value. Accounts are written off.When
management's assessment of
is estimated based upon theI
accounts.

Inventory
of the University consists mainly of housekeeping, maintenance, and office.supplies
and is stated at the lower of cost or market, with cost determined principally on the
weighted average method.I
Capital Assets.Land
and buildings at the University's campus acquired or constructed prior to the creation.of
PASSHE on July 1, 1983, are owned by the Commonwealth and made available to the
University. Since the University neither owns such assets nor is responsible to service
associated bond indebtedness, no value is ascribed thereto in the accompanying financialI
statements. Li~~~ise, no. value is ascribed. to the portion of any land or buildings acquired or
constructed utilizing capital funds appropriated by the Commonwealth after June 10, 1983,
and made available to the University.I
All assets with a purchase cost, or fair value if acquired by gift, in excess of $5,000, with an
estimated useful life of two years or greater, are capitalized. Buildings, portions of buildings,.and
capital improvements acquired or constructed by the University after June 30, 1983,.through
the expenditure of University funds or the incurring of debt are stated at cost less
accumulated depreciation.
and furnishings are stated at cost less accumulated depreciation. All library
books are capitalized and depreciated. The University provides for depreciation on the
straight-line method over the estimated useful lives of the related assets. Buildings and

i
1
!

improvements are depreciated over useful lives ranging from 10 to 40 years. Equipment and
furnishings are depreciated over useful lives ranging from 3 to 10 years. Library books areI
depreciated over 10 years. Normal repair and maintenance expenditures are not capitalized
because they neither add to the value of the property nor materially prolong its useful life.

,
!

Where applicable, intangible assets (i.e., assets lacking physical substance, which are non-I
financial in nature and having an initial useful life extending beyond a single reporting
period) are stated at cost less accumulated amortization. The University provides
for
amortization on the straight line method over the estimated useful lives of the relatedI
intangible assets. Intangible capital assets considered to have indefinite useful lives are not
amortized. Intangible assets considered to have indefinite useful lives which existed as of
July 1, 2009 are not reported.

I

12 ~:;

J

.contingent

.Edinboro

University

of Pennsylvania

of the State System of Higher Education

Notes to Financial Statements-June
30, 2010 and 2009.1.

Nature of Operations
Trustee

and Summary

of Significant

Accounting

Policies (Continued)

Held Funds (Foundation).Trustee

held funds include cash equivalents held by a trustee under the terms of a loan
agreement the Foundation has entered into with the Pennsylvania Higher EducationalI
Facilities Authority ("PHEFA") (Note 6).
Deferred

RevenueI

[)eferred revenue includes amounts received for tuition and fees, grants, corporate
sponsorship payments and certain auxiliary activities prior to the end of the fiscal year but
related to the subsequent accounting period.

I

Compensated

I

Absences

Employees' right to receive annual leave and sick leave payments
retirement for services already rendered is recorded as a liability.I
Pension

upon termination

or

Plans

Employees

of the University are required to enroll in one of three available cost-sharing.multiple-empl
retirement plans immediately
upon employment.
The University.recognizes
annual pension expenditures equal to its contractually required contributions to
the Plan.-Income
Taxes
The University, as a member of PASSHE, which is tax-exempt; accordingly, no provision for-income
taxes has been made in the accompanying financial statements.
Use of EstimatesI
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of
assets and liabilities at the date of the financial statements, and the reported.amounts
of revenues and expenses during the reporting period. Actual results could differ
from those estimates.I
Reclassifications
Certain amounts in the 2009 financial statements have been reclassified to conform to the-2010

I

presentation.II

"':..~..
13

I

Edinboro

University

of Pennsylvania

of the State

System

of Higher

Education

Notes to Financial StatementsI

June 30, 2010 and 2009I

1. Nature of Operations
New Accounting

a,nd Summary

of Significant

Accounting

Policies

(Continued)

StandardsI

In June 2007, GASB issued Statement No. 51, Accounting and Financial Reporting for
Intangible Assets. Statement No. 51 establishes accounting and financial reportingI
requirements for intangible assets, specifically with regard to whether and when intangible
assets should be considered capital assets for financial reporting purposes. Statement No.
51 is effective for the fiscal year ending June 30, 2010.I
In ~une 2008, GASB issued Statement No. 53, Accounting and Financial Reporting for
Derivative Instruments. Statement No. 53 provides a comprehensive framework for the
measurement, recognition and disclosure of derivative instrument transactions. StatementI
No. 53 is effective for the fiscal year ending June 30, 2010.
In February 2009, GASB issued Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions.
Statement No. 54 establishes fund balanceI
classifications for governmental funds. The University is required to adopt Statement No. 54
for the fiscal year ending June 30, 2011.I
In December 2009, GASB issued Statement No. 57, OPEB Measurements by Agent
Employers and Agent Multiple-Employer Plans. Statement No. 57 amends Stateme.nt
No. 45, Accounting and Financial Reporting by Employers for Postemployment BenefIts
Other Than Pensions and Statement No. 43, Financial Reporting for PostemploymentI
Benefit Plans Other Than Pension Plans. The University is required to adopt Statement No.
57 for the fiscal year ending June 30, 2012.I
In December 2009, GASB issued Statement No. 58, Accounting and Financial Reporting for
Chapter 9 Bankruptcies. Statement No. 58 provides accounting and financial reporting
guidance for governments that have petitioned for protection from creditors by filingI
bankruptcy under Chapter 9 of the United States Bankruptcy Code. The University is
required to adopt Statement No. 58 for the fiscal year ending June 30, 2011.
In June 2010, GASB issued Statement No. 59, Financial Instruments Omnibus. StatementI
No. 59 updates existing standards regarding financial reporting and disclosure requirements
of certain financial instruments and external investment pools. The University is required to
adopt Statement No. 59 for the fiscal year ending June 30, 2011.I

IIIII

The University has determined that Statements No. 51, 53, 54, 57, 58, a~d 59 have no
effect on its balance sheet or statement of revenues, expenses, and changes In net assets.

...~
.,.:0.-

14

.Edinboro
.June

University

of Pennsylvania

of the State System of Higher Education

Notes to Financial Statements
30, 2010 and 2009
i

.2.

Condensed Compo~ent Unit Information

.component

The following represents combining
units as of June 30:

.

of net asset information

Due from the University

.Total

assets

Funds

under

68,567

$

52,992,200
83,895,596
$

Total

162,677

$

1,789,325
5,973,505

136,956,363

$

4,755,146

$

231,244

$

54,781,525
89,869,101

7,925,507

$

Non-Major
Component
Units

Foundation

34,697

$

45,392,139
30,381,535

144,881,870

$

4,755,146

$

119,949

Total

$

1,792,969
6,042,619

75,808,371

$

4,438,706

$

7,955,537

154,646
47,185,108
36,424,154

$

83,763,908

investment

management
University
Long-term

$

net

for the

2009

Non-Major
Component
Units

Foundation

Capital assets,
Other assets

.

statement

2010

i

.

condensed

for Edinboro

of Pennsylvania

$

debt

Other liabilties
.Total

liabilities

$

-$

$

4,438,706

115,876,300

186,470

116,062,770

55,627,416

218,966

55,846,382

7,637,643

864,753

8,502,396

6,909,657

780,041

7,689,698

128,269,089

$

1,051,223

$

129,320,312

$

1,254,433

$

5,495,673

$

6,750,106

$

66,975,779

$

999,007

$

67,974,786

1,243,790

$

5,648,748

$

6,892,538

Net assets:

.

Unrestricted
Temporarily
Permanently

.

Total

$
restricted
restricted
net assets

$

2,123,553

461,847

2,585,400

2,708,871

415,544

3,124,415

5,309,288

916,764

6,226,052

4,879,931

892,238

5,772,169

8,687,274

$

6,874,284

$

15,561,558

0

15

$

8,832,592

$

6,956,530

$

15,789,122

Edinboro University-- of Pennsylvania of the State System of Higher Education
Notes to Financial StatementsI
June 30, 2010 and 2009
I

'I

2. Condensed Compol1ent Unit Information (Continued)
The following represents combining statement of revenues, expenses, and changes in netI
assets for the component units for the years ended June 30:

I

2010

2009

Non-Major

Non-Major

Component
Foundation

I

Changes in Unrestricted Net Assets
Revenues and other additions:
Rentlllincome
University store and services
Net assets released from restrictions
Student activity fees
Other revenues
Contributions
Special activities
Unrealized gain on investments
Investment income

_

I

$

5,646,981

Expenses and other deductions:
University store
Program expenses
Supporting services expenses
Management and general
Special activities
SCholarships
Other expenses
loss on investments

6,976,002

7,162,151

1..525,677
3,421,219
1,573,485
318,377
153,962
85,301
51,056

~~;~

338,629
231,896
87,876
(60,740)
(1,182,979)

Foundation

$

1,264,125

Units

Total

$

$

1,264,125
4,731,109
1,441,098
1,034,366
511,682
217,754
55,352

169,706
53,292
30,647

4,731,109
227,561
1,034,366
341,976
164,462
24,705

636,519

47,255

14,392,266

3,367,826

6,571,434

9,939,260

8,687,828
3,421,219
1,573,485
537,847
153,962
85,301
75,056

2,308,221

1,393,060
3,260,793
1,153,897
267,158
70,395
88,399
51,751
24657

3,701,281I
3,260,793
1,153,897
489,808
70,395
88,399
51,751-Unrealized
647767

~~~

1,213,537

222,650

=~:=

683,774-Total

~~~~~~
213,845

=~~:~~

(153,075)

(142,432)

261,324

224,970
60,045
17,679
(3,744)
(252,647)

563,599
291,941
105,555
(64,484)
(1,435,626)

266,501
134,017
(10,431)
(48,780)
(1,219,687)

205,969
(105,404)
(60,574)
(17,713)
(227,561)

472,470
28,613
(71,005)~
(66,493)~
(1,447,248)

(1,083,663)~

(585,318)

46,303

(539,015)

(878,380)

(205,283)

469,450
(36,299)
(3,794)

24,526

493,976
(36,299)
(3,794)

392,831
(100,004)
6150

28,288

475,169~

Net Assets~

Contributions
Other reductions, net
Satisfaction of donor restrictions
in permanently restricted net assets

429,357

(Decrease) increase in net assets
Net Assets, Beginning
Net Assets, Ending

7,416,264

10,643

(Decrease) increase in temporariiy
restricted net assets

I

5,646,981
4,898,743
1,439,420
1,164,797
516,465
322,640
173,028
132,800
97,392

=~~~

Changes in Temporarily Restricted Net Assets
Contributions and support
Investment income
Unrealized gain (loss) on investments
Other reductions, net
Satisfaction of donor restrictions

Restricted

$

24,000
--623110

Increase (decrease) in unrestricted net assets

Changes in Permanently

129,844
130,956
142,277
122,695
56,738

4,898,743
252,647
1,164,797
386,621
191,684
30,751
10,105
40,654

219,470

Total expenses and other deductions

Total

$

1,186,773

revenues and other additions

Component

Unit

$

===~~~~

453,883

(145,318)

(82,246)

(227,564)

8,832,592

6,956,530

15,789,122

8,687,274

$

6,874,284

[

$

~"

15,561,558

=~~

421,119
(100,004)
-6150..Increase

==~~
(365,558)

8,832,592

~

84,329

9,198,150
$

==~=
(281,229)

6,872,201
$

6,956,530

16,070,351
$

-.. I

16
-

.1.[.[

15,789,122

Edinboro

University

of Pennsylvania

of the State

System

of Higher

Education

Notes to Financial Statements~
June 30, 2010 and 2009~I

3.

Deposits
Primary

and Investments
Government~I

The University predominantly maintains its cash balances on deposit with PASSHE.
PASSHE maintains these and other PASSHE funds on a pooled basis. Although PASSHE~
I

I
I
.$46,716,444

I
I

I
I

I

I

I
J
J

pools its funds in a manner similar to an internal
entities do not hold title to any assets in the fund.

investment
pool, individual
PASSHE as a whole owns

PASSHE~
title to all

assets. The University does not participate in the unrealized gains or losses on the
investment pool; instead, the University holds shares equal to its cash balance. Each share~
has a constant value of $1, and income is allocated based on the number of shares owned.
Revenue realized at the PASSHE level is calculated on a daily basis and posted monthly to
each entity's account as interest income. The University's portion of pooled funds totals
and $44,972,892 at June 30,2010 and 2009, respectively.
PASSHE invests its funds in accordance with the Board of Governor's Investment Policy,.
which authorizes PASSHE to invest in repurchase agreements,
commercial paper,
obligations of the United States Treasury, agencies and sponsored entities, certificates of
deposit, municipal bonds, mortgage-backed securities, asset-backed securities, banker's
acceptances,
and corporate bonds. Restricted nonexpendable
funds and amounts
designated by the Board of Governors or University trustees may be invested in the
investments described above, as well as in corporate equities and approved pooled.
common funds. For purposes of convenience and expedience, the University uses local
financial institutions for activities such as cash deposits. In addition, the University may
accept gifts of investments from donors as long as risk is limited to the investment itself.I
Restricted gifts of investments fall outside the scope of the investment policy.
In keeping with its legal status as a system of public universities, PASSHE recognizes a
fiduciary responsibility to invest all funds prudently in accordance with ethical and prevailing
legal standards. In addition, PASSHE recognizes that the funds in its custody can be
classified according to purpose, time frame for use, source, and other similar classifications.
Differential investment guidelines and objectives are required to manage various funds
classifications appropriately and optimally.
Regardless of funds classifications,
certain general tenets apply. Investments in all
classifications seek to minimize exogenous risks while maintaining or expanding purchasing
power. Adequate liquidity is maintained so assets are held to maturity. In all classifications,
high quality investments are preferred. Reasonable portfolio diversification is pursued to
e~sure th~t no single. se~.urity ~r investment or class of s~curities or investments will. have a
disproportionate or significant Impact on the total portfolio. Investments are made In U.S.based corporations. Investment performance in all classifications is monitored on a frequent
and regular basis to ensure that objectives are attained and guidelines are followed. A
portfolio duration target of 1.8 years is maintained with an upper limit of 2.2 years.

I
itI

I
~

17

.-0:

~

I

Edinboro

I

University

-

of Pennsylvania

of the State

System

of Higher

Education

Notes to Financial Statements
June30,2010and2009

I

I

3. Deposits

and Investments

(Continued)

Safety of principal and liquidity are the top priorities for the investment of PASSHE's
operating funds. Within those guidelines, income optimization is pursued. Speculative
investment activity is not allowed; this includes investing in asset classes such as
commodities, futures, short-sales, equities, real or personal property, options, ventureI
capital investr:nen!s, private placements, I~tter stocks, and unlisted securities. Collateralized
mortgage obligations (CMOs) are sometimes based on cash flows from interest-only (10)
payments or principal-only (PO) payments and are sensitive to prepayment risks. The CMOsI
i~ PASSHE's portfolio do not have 10 or PO structures; however, they are subject to
extension or contraction risk based on movements in interest rates. PASSHE's operating
funds are invested and reinvested in the following types of instruments with qualifications asI
provided.
Investment

I

Limit

Categories

Single

(% of MarketValue)

Government

I

securities/repurchase
agreements

Issuer

(maximum)

Rating

Limit

(Moody's)

Greater than 20%

5% Repurchase

N/A

Less than 30%
Less than 20%
Less than 20%

5% of each type
5%
NA

P-1
Aa or higher
Aa or higher

Less than 20%
Less than 20%
Less than 20%

NA
NA
5%

Aaa
Aaa
N/AI

Commercial
paper/certificates

I

of

deposiUbanker's
acceptances
Municipal bonds
Corporate bonds
Collateralized mortgage
obligations (CMO's)
Asset-backed securities
System notes

I

At June 30, 2010 and 2009, the carrying amount of the University's demand and time
deposits were $1,893,948 and $2,332,598, respectively, as compared to bank balances ofI
$2,027,304 and $2,921,788, respectively. The differences are primarily caused by items intransit and outstanding checks. All bank balances were covered by federal depository
insurance or were collateralized by a pledge of United States Treasury obligations held by
Federal Reserve banks in the name of the banking institutions, or uninsured andI
uncollateralized, but covered under the collateralization provisions of the Commonwealth of
Pennsylvania Act 72 of 1971 ("Act 72"), as amended. Act 72 allows banking institutions to
satisfy the collateralization required by pooling eligible investments to cover total publicI
funds on deposit in excess of federal insurance. Such pooled collateral is pledged with the
financial institutions' trust departments. At June 30, 2010, none of the University's demand
and time deposits are exposed to foreign currency risk.
I

Investment

Risk FactorsI

There are many factors that can affect the value of investments. Some, such as custodial
credit risk, concentration of credit risk and foreign currency risk may affect both equity and
fixed income securities. Equity securities respond to such factors as economic conditions,I
individual company earnings performance, and market liquidity, while fixed income securities
are particularly sensitive to credit risks and changes in interest rates.

I

18

I

Edinboro

University

I

-

of Pennsylvania

of the State

System

of Higher

Education

Notes to Financial Statements
June 30, 2010 and 2009

I

3.

Deposits

and Investments

(Continued)

Interest Rate Risk
I

I

Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of
the investment. Modified duration of a security is a measure of interest rate risk and
expresses the amount of time in years until principal is returned. This calculation takes into
account the coupon rate, interest and principal payment frequency, call options and
sensitivity to price changes in interest rates. Duration will also change as the level of interestI
r~tes in the economy rise and fall.
The carrying value (fair value) of investments for the University at June 30 is as follows:

I

I

Modified
Duration
Investments:
Equity-based mutual funds
Common stocks
Fixed income mutual funds
U.S. government and agency
obligations

2010

N/A
N/A
2.74

$

2,192,565
833000
1,460:011

1.57

$

1,386,591
1 262747I
1 :397:688

268,750

Total investments
Major Component

2009

$

4,754,326

396,I680
$

4,443,706I

Unit

I
2010

The fair value of investments for the Foundation at June 30 is as follows:

Investments:
Cash and cash equivalents

$

Equity-based mutual funds
Governmental securities
Corporate bonds
Debt-based

mutual

j

funds

$

4,816,512
543,069
85,955
3

Common stock

I

226,933

2009I

, 299

, 226

2,123,087

Total

$ 11,094,782 $

I

I

I
I

~c_~-

19

358,130

I

3,271,844
786,746
125,754
2

, 480

, 891

2,011,961

9,035,326

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

4.

Capital

Assets

..'

Capital assets acquired or constructed
by the University
funds or the incurrence of debt consist of the following:

I

through

the expenditures

of University

I

FortheyearendedJune30,2010:

Estimated

Beginning

Lives

Balance

(in years)

Ending
Reclassifica-

July 1, 2009

Additions

Retirements

I

Balance

tions

June 30, 2010

[
Land

$

Construction in progress
I

Total capital
assets not
being
depreciated

I

511,567

$

-$

-$

-$

511,567

6,451,661

2,815,061

-(7,845,192)

1,421,530

6,963,228

2,815,061

-(7,845,192)

1,933,097

Buildings, including

I

improvements

Furnishings

I

10-40

77,155,680

-(1,108,764)

7,625,077

83,671,993

and

equipment (including
cost of capital leases)
Library books

39,376,762
7,376,912

1,689,902
128,467

(469,199)
(11,766)

123,909,354

1,818,369

(1,589,729)

(28,678,665)

(4,156,038)

1,065,284

-(31,769,419)

(24,113,811)
(6,627,240)

(4,207,854)
(133,022)

454,831
11,766

-(27,866,834)
-(6,748,496)

(59,419,716)

(8,496,914)

1,531,881

-(66,384,749)

depreciated,
net

64,489,638

(6,678,545)

(57,848)

Capital assets,
net

$ 71,452,866

$ (3,863,484) $

(57,848)

Total capital
assets beingI
depreciated
Less accumulated
depreciation:
Buildings, including
Improvements
Furnishings and
equipment
Library books

3-10
10

220,115
40,817,580
-7,493,613

7,845,192

131,983,186

I

I

I

Total
accumulated
depreciation

I

Total
assets
capital
being

I

I

I
G"

I

,

-'",'

20

7,845,19~

$

65,598,437

$ 67,531,534

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

4.

Capital Assets (Continued)
For the year ended June 30, 2009:

I

I

Estimated
Lives
(in years)
land
Constructionin progress

Beginning
Balance
July 1,2008

Additions

~--~~~~:~
~
3,843,996

Retirements

~ ~
8,941,493

Ending
ReclassificaBalance
tions
June30,2009

~ -~
~
-(6,333,828)

~

:~:-::
6,451,661I

Tbtal
capital
assets not
beingI
depreciated

4,355,563

8,941,493

-(6,333,828)

6,963,228

Buildings,includingI
improvements
Furnishings

I

10-40

79,259,524

663,773

(2,767,617)

-77,155,680

34,779,057
7,348,858

947,524
156,433

(2,683,647)
(128,379)

6,333,828
39,376,762
-7,376,912

121,387,439

1,767,730

(5,579,643)

6,333,828

(27,137,280)

(3,943,041)

2,401,656

-(28,678,665)

(22,839,550)

(3,951,376)

2,677,115

-(24,113,811)

and

equipment(including
cost of capital leases)
Librarybooks

3-10
10

Total capital
assetsbeingI
depreciated

123,909,354

I

less accumulated
depreciation:
Buildings,including
Improvements'"
FurnishingsandI
equipment
Library

books

,.

(6,631,283)

(124,336)

I

128,379

-(6,627,240)

Total
accumulated
depreciation

(56,608,113)

(8,018,753)

64,779,326

(6,251,023)

I

5,207,150

-(59,419,716)

Total
assets
capital
being
depreciated,
net

I

6,333,828

64,489,638

Capital
assets,
net

$ 69,134,889

$

2,690,470

I

I

I

I

(372,493)

21

$

(372,493)

$

$ 71,452,866

I

Edinboro

University

-

of Pennsylvania

of the State

System

of Higher

Education

Notes to Financial StatementsI
June 30, 2010 and 2009I

4.

Capital Assets (Continued)
Major Component

UnitI

I
2009

Fixed asset of the Foundation at June 30, 2010 and 2009 are summarized as follows:

2010
Buildings
Construction in progress -Student Housing Facility
Furniture and fixtures
Equipment
land

$ 46,870,091
5,151,747
1,648,883
909,447

improvements

$

161,366-

Vehicles

81,214

Total

51,614

54,822,748

less accumulated depreciation

Payable and Accrued

45,796,026I

(1,830,548)

Total fixed assets, net

5. Accounts

22,892,173I
21,784,751
739,284
328,204I

$

(403,887)I

52,992,200

$

45,392,139I

Expenses

I

Accounts payable and accrued expenses consisted of the following at June 30:

2010
Employees
Suppliers

$
and

services

7,960,478

2009I
$

5,386,029

Accrued interest payable

2,732,015

65,982

Total

$

13,412,489

6,491,338

70,895I
$

9,294,248I

6. Bonds Payable
Bonds payable consist of several outstanding tax-exempt revenue bonds issued by theI
PASSHE through the Pennsylvania Higher Educational Facilities Authority ("P~EFA"). In
connection with the bond issuances, the PASSHE entered into a loan agreement with PHEFA
on behalf of the University under which PASSHE has pledged its full faith and credit for theI
repayment of the bonds. The loans constitute an unsecured general obligation of the PASSHE.
The PASSHE's Board of Governors has allocated portions of certain bond issuances to the
University to undertake various capital projects or to advance refund certain previously issuedI
bonds. The University is responsible for the repayment of principal and interest on its applicable
portion of each obligation.

II

22

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

June 30, 2010 and 2009

I

6.

Notes to Financial Statements

Bonds

Payable

The various

(Continued)

bond series

allocated

to the University

for the year ended

June 30, 2010 are asI

follows:

I

Weighted
Average
Interest
Rate

Series S used for inside
wiring 'and PBX

5.52%

Series T used for inside
wiring, PBX, data
equipment, and in-ground
wiring
Series U used for Residence
Hall renovations
Series W used for
renovations to the Student
Union
Series X used for renovations
to Student Union and
Residence Halls
Series Z used for renovations
to the Student Union
Series AC used for
renovations to Residence
Halls and the University
Center
Series AE used for Energy
Savings projects and
renovations to the
University Center
Series AG used for
renovations to the Student
Union
Series AH used for
renovations to the
University Center
Series AI used for Sprinkler
System
Series AK used for inside
wiring and PBX

$

Balance
July 1,

Bonds

Bonds

June
Balance
30,

2009

Issued

Redeemed

2010

180,584

$

-$

180,584

I

$

-

I

I

I

4.87%

969,941

-235,441

734,500

4.38%

994,559

-60,136

934,423

4.74%

296,415

-55,990

240,425I

4.37%

3,417,241

-269,818

3,147,423

3.96%

368,047

-180,731

187,316

4.91%

7,615,491

-322,177

7,293,314

4.99%

17,626,647

-877,434

16,749,213

4.53%

697,795

-166,519

531,276

4.69%

1,409,555

-47,311

1,362,244

3.98%

2,438,837

-132,474

2,306,363I

I

I
I
I

I

Total bonds payable
Plus premium/issuance

costs

Outstanding at end of year

3.68%

-186,010
36,015,112

$

186,010

$

186,010

-

2,714,625

33,486,497

1,216,187

1,062,069I

$ 37,231,299

$ 34,548,566

I

I

."-"
23

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

6. BondsPayable
(Continued)
The various

I

bond series

allocated

to the University

for the year ended

June 30, 2009

are as

follows:

I
I

Weighted
Average

Series S used for inside
wiring and PBX
Series T used for inside
wiring, PBX, data
equipment, and in-ground
wiring
Series U used for Residence
Hall renovations
Series V used for Sprinkler
Installation
Series W used for
renovations to the Student
Union
Series X used for renovations
to Student Union and
Residence Halls
Series Y used for Sprinkler
Installation
Series Z used for renovations
to the Student Union
Series AB used for SprinklerI
Installation
Series AC used for
renovations to Residence
Halls and the UniversityI
Center
Series AD used for Sprinkler
Installation
Series AE used for Energy
Savings projects and
renovations to the
University Center
Series AG used for
renovations to the Student
Union
Series AH used for
renovations to the
University Center
Series AI used for Sprinkler
System

Balance

Balance

Interest

July 1,

Bonds

Bonds

June 30,

Rate

2008

Issued

Redeemed

2009

5.52%

$

351,093

$

-$

170,509

$

180,584

I

I

I

I

I

Total bonds payable
I

Plus premium/issuance

costs

Outstanding at end of year

4.88%

1,193,815

-223,874

969,941

4.32%

1,052,845

-58,286

994,559

var%

391,715

391,715-

4.72%

350,475

4.48%

3,674,140

var %

934,165

3.96%

542,852

var %

1,085,501

4.91%

7,922,532

var %

102,749

4.99%

18,461,624

-834,977

17,626,647

4.48%

855,252

-157,457

697,795

-54,060

296,415

-256,899

3,417,241
934,165-I

-174,805

368,047
1,085,501-

-307,041

7,615,491

I

102,749-

I

I

4.70%

-1,450,788

41,233

1,409,555

3.95%

-2,548,730

109,893

2,438,837

4,903,164

36,015,112

36,918,758

$

3,999,518

$

I

1,336,143

1,216,187

$ 38,254,901

$ 37,231,299

24

I

Edinboro

University

-

of

Pennsylvania

of

the

State

System

of

Higher

Education

Notes to Financial Statements

I

June 30, 2010 and 2009

I

6. Bonds Payable (Continued)
Principal and interest maturities for each of the next five years and in subsequent five-yearI
periods ending June 30, as follow:
2011

2012

2013

2014

2015

2016
2020

2021
2025

2026I
2030

Total

Series

T
I

Principal
Interest

$ 247,490 $
36,130

39,298 $
23,755

40,745 $
21,791

42,794 $
19,957

45,085 $
17,978

259,297 $
54,942

59,791 $
2,990

S 734,500
-177,543

283,620

63,053

62,536

62,751

63,063

314,239

62,781

-912043 ,I

Principal
Interest

61,061
41,258

62,912
38,968

66,612
36,609

68,463
33,944

72,163
30,692

409,851
103,671

193,361
13,887

934,423
-299,029

Total

102,319

101,880

103,221

102,407

102,855

513,522

207,248

-1,233,452

Principal
Interest

57,872
11,133

58,812
8,556

60,694
5,878

63,047
3,032

240,425
28,599

Total

69,005

67,368

66,572

66,079

269024

~
133,194

-;:;:
-::::;
-::;;;
---~~
-~:
123,963 114,266 104,104
95,550
337,189

Total

317,829

317,896

Principal
Interest

187,316
7,493

187,316
7,493

Total

194,809

194,809

Principal
Interest

338,394
356,517

354,611
339,597

372,990
321,867

391,370
303,217

410,830
283,648

2,383,895 3,041,224
1,088,767 433,858

7,293,314I
.3,127,471

Total

694,911

694,208

694,857

694,587

694,478

3,472,662 3,475,082

-10,420,785

Principal

921,639

965,844 1,016,497 1,068,024 1,123,649 6,560,373 4,306,603

Interest

851,556

805,473

Total
U

I

W

X

Z

AC

'

AE

Principal
Interest

Total
I

AG

Principal
Interest

I

Total
AH

I
AI

I

I

Total

317,497

317,961

317,377

1,588,454

74,620

~
-982,886I

953,295

-4,130,309

I

757,181

703,815

647,744

2,299,128

768,998

1,773,195 1,771,317 1,773,678 1,771,839 1,771,393 8,859,501 5,075,601
172,183
17,494

189,677

176,715
11,899

188,614

I

786,584 16,749,213
39,329

6,873,224

825,913 23,622,437

182,378

531,276

6,155

35548
--,--

188,533

566824

Principal
Interest

49,690-:;;-:::
63,877
61,889

-:::-:::59,306
56,597
53,749

~
220,804

Total

113,567

113,561

113,489

113,555

113,483

567,708

567,867

Principal
Interest

136,957
91,317

141,648
86,524

146,843
81,566

152,038
76,794

157,234
71,472

881,974
260,077

689,669
69,485

2,306,363
-737,235

Total

228,274

228,172

228,409

228,832

228,706

1,142,051

759,154

-3,043,598

Principal
Interest
Total

I

~

I

::

-;::::
~
135,855
29,572
340,663

681,649
2,043,893

2,357,237 2,045,445 2,144,173 2,056,551 2,090,522 12,093,559 9,601,335 1,097,675 33,486,497
1,609,969 1,500,624 1,404,619 1,301,460 1,200,833 4,364,578 1,499,693 68,901 12,950,677
$ 3,967,206$ 3,546,069$ 3,548,792$ 3,358,011$ 3,291,355$ 16,458,137$ 11,101,028$ 1166,576
$ 46437
,
" 174

25

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

6. Bonds Payable (Continued)
In addition, the University participates in the PASSHE's Academic Facilities Renovation BondI
Program (AFRP), which was established for the purpose of renovating the academic facilities
across the PASSHE. This program will provide $100,000,000 in funding over the next several
years. PASSHE will issue bonds to provide a pool for funding for AFRP ($47,857,567 andI
$49,354,148 was outstanding as of June 30, 2010 and 2009). Universities can request funds for
AFRP projects in accordance with their pre-approved amount of funding from the pool.
Repayments to the pool are made annually based on the University's proportionate share of theI
total allocation of funds under the program. As of June 30, 2010 and 2009, the balance owed by
the IUniversity to PASSHE's AFRP pool of funding was $3,980,321 and $4,099,135,
respectively.I
Major Component

Unit

Long-term debt of the Foundation consisted of the following at June 30, 2010 and 2009:

I

I

2010
Note payable (Series 2008 Bonds). Wells Fargo Bank,
N.A., as more fully described below, due in varying
annual installments through July 1, 2042, interestI
rates of 4.95% to 5.95%
Note payable (Series 2010 Bonds), Wells Fargo Bank
N.A., as more fully described below, due in varying
annual installments through July 1, 2043 interest
rates of 3.63% to 6.00%

$

2009

56,125,000

$

56,125,000

I

Long-term debt

116,945,000

Less unamortized discount

I

(497,584)I

115,876,300

Less current portion

I

56,125,000I

(1,068,700)

Long-term debt, net of discount

I

60,820,000-

55,627,416

--

Long-term debt, non-current portion

$ 115,876,300

$

55,627,416I

In February 2008, PHEFA issued its Edinboro University Foundation Student Housing Project At
Edinboro University of Pennsylvania Revenue Bonds -Series 2008 (the "Series 2008 Bonds"),
the proceeds of which were loaned to the Foundation pursuant to a Loan Agreement betweenI
PHEFA and the Foundation dated February 1, 2008 (the "Loan Agreement"). The proceeds of
the Series 2008 Bonds were used by the Foundation to provide funds to: finance the cost of
acquiring, constructing, furnishing and equipping a 796-bed student housing facility ("StudentI
Housing Facility"), including the buildings, furniture, fixtures and equipment therefore and the
certain demolition activities related thereto to be located on the main campus of the University
on land leased by the Foundation from the University; to fund a portion of the interest payments
on the Series of 2008 Bonds during construction of the Student Housing Facility and for a period
of up to six months thereafter; to fund a debt service reserve fund for the Series 2008 Bonds,
and; to pay the costs of issuing the Series 2008 Bonds.

26

I

Edinboro

University

I

Notes to Financial Statements
June 30, 2010 and 2009

I

6.

-

of Pennsylvania

of the State

System

of Higher

Education

Bonds Payable (Continued)
Following the issuance of the Series 2008 Bonds, PHEFA assigned the Loan Agreement toI
Wells Fargo Bank, N.A. ("Trustee"), as trustee, under a Trust Indenture dated February 1, 2008,
as security for the Series 2008 Bonds.I
Contemporaneously with the assignment of the Loan Agreement to the Trustee, the Trustee and
the Foundation entered into an open-ended leasehold mortgage and security agreement as
additional security for the Series 2008 Bonds, granting the Trustee a security interest in theI
premises, buildings, machinery and equipment, all rents, royalties and income, and the Ground
Lease Agreement between the University (as lessor) and the Foundation (as lessee).
Under the terms of the Loan Agreement, the Foundation is required to remit interest paymentsI
to the Trustee on or before the 25th day of each calendar month in an amount equal to onesixth of the interest due on the next succeeding interest payment date. Principal payments are
due on or before the 25th day of each calendar month in amounts equal to one-twelfth of theI
principal amount maturing on the next succeeding July 1 (if any) commencing July 25, 2017.
Payments required to effect mandatory redemption of principal amounts are due in amounts
equal to one-twelfth of the Series 2008 Bonds subject to mandatory redemption on the nextI
succeeding July 1 (if any) beginning July 25,2010.

I

In May 2010, PHEFA issued its Edinboro University Foundation Student Housing Project AtI
Edinboro University of Pennsylvania Revenue Bonds -Series 2010 (the "Series 2010 Bonds"),
the proceeds of which were loaned to the Foundation pursuant to a Loan Agreement between
PHEF A and the Foundation dated May 1, 2010 (the "Loan Agreement"). The proceeds of theI
Series 2010 Bonds are being used by the Foundation to provide funds to: finance the cost of
acquiring, demolishing, constructing, equipping and furnishing of student housing on the
campus of Edinboro University of Pennsylvania consisting of 856 beds; to fund a portion of the
interest payments on the Series of 2010 Bonds during construction of the Student Housing
Facility and for a period of up to six months thereafter; to fund a Debt Service Reserve Fund for
the Series 2010 Bonds, and; to pay the costs of issuing the Series 2010 Bonds.I
Following the issuance of the Series 2010 Bonds, PHEFA assigned the Loan Agreement to
Wells Fargo Bank, N.A. ("Trustee"), as trustee, under a Trust Indenture dated May 1, 2010, as
security for the Series 2010 Bonds.

I

I

I

I

Contemporaneously with the assignment of the Loan Agreement to the Trustee, the Trustee and
the Foundation entered into an open-ended leasehold mortgage and security agreement as
additional security for the Series 2010 Bonds, granting the Trustee a security interest in the
premises, buildings, machinery and equipment, all rents, royalties and income, and the Ground
Lease Agreement between the University (as lessor) and the Foundation (as lessee).
Under the terms of the Loan Agreement, the Foundation is required to remit interest payments
to the Trustee on or before the 1 st day of each semi-annual period in an amount equal to the
interest due from the last interest payment date through to the current interest payment date.
Principal payments are due annually commencing July 1, 2013. Payments required to effect
mandatory redemption of principal amounts are due annually beginning July 1, 2021.

I

Interest expense on the Foundation's notes was $3,554,795 in 2010 and $3,261,875 in 2009 of
which $546,574 in 2010 and $2,478,120 in 2009 was capitalized to construction in progress.

I

27

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

6. Bonds Payable (Continued)
The aggregate future principal payments on long-term debt at June 30, 2010 are as follows:

I

Years ending June 30:
2011
2012
2013
2014
2015
r Thereafter

$

-I
100,000
200,000
850,000
1,125,000I
114,670,000

~

I

Total

$ 116,945,000

7. Deferred Revenue
I

Deferred revenue consisted of the following at June 30:I

2010
Student tuition and fees
Dining improvements
Grant revenue
Sponsorship fees
Total

2009

$

2,424,919
137,500
40,834
140,024

$

2,049,668I
269,298
238,441
171,772I

$

2,743,277

$

2,729,179I

I

8. Compensated Absences and Postretirement Benefits

Compensated absences and postretirement benefits consisted of the following at June 30:
2010

2009

Current

Compensated absences
I

~---~~:~:~-;

Post-retirement benefit
obligations
Total

$

Noncurrent

$

5,889,712

3,261,000

50,797,656

3,986,515

$ 56,687,368

I

I
I

I

28

NoncurrentI

Current

$

$

565,297

$

5,773,771

3,276,000

47,021,037

3,841,297

$ 52,794,808

I
I

Notes to Financial Statements
June 30, 2010 and 2009

I

8.

I

Compensated

Absences

Compensated

Absences

and Postretirement

Benefits

(Continued)

Compensated absences activity for the year ended June 30, is as follows:

I

2010
Balance July 1
Current changes in estimate
Payouts

$

6,339,068
801,387
(525,228)

$

6,183,667I
522,187
(366,786)I

Balance June 30

$

6,615,227

$

6,339,068

Postretirement
I

2009

Benefits

University employees who retire after meeting specified service and age requirements
become eligible for participation in one of two defined healthcare benefits plans. These
plans include hospital, medical/surgical,
and major medical coverage, and provide aI
Medicare supplement for individuals over age 65.
System PlanI

I

Plan Description

Employee members of the Association of Pennsylvania State College and University
Faculties, the State College and University Professional Association, Security Police and
Fire Professionals of America, Pennsylvania Nurses Association, and non representedI
employees participate in a single-employer defined benefit healthcare plan administered
by PASSHE (System Plan). The System Plan provides eligible retirees and their eligible
dependents with healthcare benefits as well as tuition waivers at any of PASSHE'sI
universities. The State System of Higher Education Act of November 12, 1982, P. L. 660,
No. 188, as amended (Act 188) empowers the Board to establish and amend benefit
provisions. The System Plan is unfunded and no financial report is prepared.

I

I

I

I
I

I

29

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

8.

Compensated
Funding

I

I

Absences

and Postretirement

Benefits (Continued)

Policy

The contribution requirements of plan members and PASSHE are established and may
be amended by the Board. The System Plan is funded on a pay-as-you-go basis; i.e.,I
premiums are paid to an insurance company and various health maintenance
organizations to fund the healthcare benefits provided to current retirees. Tuition waivers
are provided by the retiree's sponsoring University as they are granted. PASSHE paid
premiums of $31,830,000 and $43,847,000 for the fiscal years ended June 30,2010 andI
2009, respectively. Plan members receiving benefits who retired prior to July 1, 2005,
are not required to make contributions. Plan members receiving benefits who retire after
July 1, 2005, contribute at various rates, depending upon when they retire, whether theyI
are eligible for Medicare, the contribution rate in effect on the day of their retirement, the
contribution rate for active employees, and applicable collective bargaining agreements.
As of June 30, 2010, the maximum rate being contributed by the plan members wasI
10% of the premium currently paid by active employees. Total contributions made by
plan members for fiscal years ended June 30, 2010 and 2009, were $2,080,000 and
$1,951,000, respectively, or approximately 6.1% and 4.3%, respectively, of the totalI
premiums.

Annual OPEB Cost and Net OPEB ObligationI
The University's annual other post employment benefit (OPEB) cost (expense) is calculated
based on the annual required contribution of the employer (ARC), an amount actuarially
determined in accordance with the parameters of GASB Statement 45. The ARC representsI
a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each
year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to
exceed thirty years.I
The following shows the components of the University's annual OPES cost for the year, the
amounts actually contributed to the plan, and changes in the University's net OPESI
obligation:
Annual required contribution
Interest on net OPES obligation
Adjustment to annual required contribution
I

$

Annual OPES cost (expense)

6,151,000

Contributions made
I

(2,389,381)

Increase in net OPES obligation

3,761,619

Net OPES obligation at July 1, 2009
I

I

6,244,000
2,389,000
(2,482,000)

50,297,037

Net OPES obligation at June 30, 2010

$

I

I

.~-.-.",

30

54,058,656

I
I

Notes to Financial Statements
June 30, 2010 and 2009

I

8.

Compensated

Absences

and Postretirement

Benefits

(Continued)

The University's annual OPES cost, the percentage of annual OPES cost contributed to theI
plan, and the net OBEB obligation for June 30, 2010, and the two preceding years were as
follows:

I

Year Ended June 30
I.

I

2010
2009
2008

$

Annual
OPEB

% of Annual
OPEB Cost

Net OPEB

Cost

Contributed

ObligationI

6,151,000
5,735,000
5,977,000

38.8%
38.1 %
27.5%

$

54,058,656
50,297,037
46,744,871

Funded Status and Funding ProgressI
The funded status of the plan as of July 1, 2009, the most recent actuarial valuation date,
was as follows (in thousands):I
Actuarial
Actuarial

accrued liability ("ML")
value of plan assets

$

75,697,000
-I

Unfunded actuarial accrued liability ("UML")

$

Funded ratio (actuarial value of plan assets/ML)

0.0%I

Covered payroll (active plan members)

$

UML

$

as a percentage of covered payroll

75,697,000

35,442,000I
213.6%

Actuarial valuations of an ongoing plan involve estimates of the value of reported amountsI
and assumptions about the probability of occurrence of events far into the future. Examples
include assumptions about future employment, mortality, and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and the annual required
contributions of the employer are subject to continual revision as actual results areI
compared with past expectations and new estimates are made about the future. The
schedule of funding progress, presented as required supplementary information following
the notes to the financial statements, presents multiyear trend information about whether theI
actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits.

I
I

I

I

31

I

Edinboro

University

I

Notes to Financial Statements
June 30, 2010 and 2009

I

8.

Compensated
Actuarial

I

of Pennsylvania

Absences

of the State

and Postretirement

Benefits

System

of Higher

Education

(Continued)

Methods and Assumptions

Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and the plan members) and include the types ofI
benefits provided at the time of each valuation and the historical pattern of sharing of benefit
costs between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce the effects of short-termI
volatility
Ibng-term

in

actuarial

accrued

liabilities

perspective

of

calculations.

the

and

the

actuarial

value

of

assets,

consistent

with

the

In the July 1, 2009, actuarial valuation, the projected unit credit method was used. TheI
actuarial assumptions included a 4.75% investment rate of return, which is the expected rate
to be earned on PASSHE's operating portfolio, and an annual healthcare cost trend rate of
8.50% initially, reduced by decrements to an ultimate rate of 4.8% by 2020. The UML isI
being amortized as a level percentage of payroll on a closed basis. The remaining
amortization period at July 1, 2009, was 26 years.I
Retired Employees

Health Program

Plan DescriptionI
Employee members of the American Federation of State, County and Municipal
Employees; Pennsylvania Doctors Alliance; and Pennsylvania Social Services Union
participate in the Retired Employees Health Program (REHP), which is sponsored by theI
Commonwealth and administered by the Pennsylvania Employee Benefits Trust Fund
(PEBTF). The REHP provides eligible retirees and their eligible dependents with health
care benefits. Benefit provisions are established and may be amended under pertinentI
statutory authority. The REHP neither issues a stand-alone financial report nor is it
included in the report of a public employee retirement system or other entity.I
Funding

Policy

The contribution requirements of plan members covered under collective bargainingI
agreements are established by the collective bargaining agreements. The contribution
requirements of nonrepresented plan members and contributing entities are established
and may be amended by the Commonwealth's Office of Administration and theI
Governor's Budget Office. Plan members who enrolled prior to July 1, 2004 are not
required to make contributions. Plan members who enrolled after July 1, 2004,
contribute a percentage of their final salary, the rate of which varies based on the plan
member's retirement date. Agency member (employer) contributions are established
primarily on a pay-as-you-go basis. In 2009/10, PASSHE contributed $248.68 for each
current active employee per biweekly pay period. PASSHE made contributions of
$25,318,000, $26,131,000 and $24,858,000, for the fiscal years ended June 30, 2010,I
2009, and 2008, respectively, which equaled the required contributions for the year. The
schedule of funding progress, presented as required supplementary
information
following the notes to the financial statements, presents multiyear trend informationI
about whether the actuarial value of plan assets is increasing or decreasing over time
relative to the actuarial accrued liabilities for benefits.

I

I

32

I

Edinboro University of Pennsylvania of the State System of Higher Education

I

Notes to Financial Statements
June 30, 2010 and 2009

I

9.

I

Pension Benefits
The University's employees participate in one of three multiple-employer cost sharing retirementI
plans. The Public School Employees' Retirement System ("PSERS") and the Commonwealth of
Pennsylvania State Employees' Retirement System ("SERS") are governmental cost-sharing
multiple employer defined benefit plans. The Alternative Retirement Plan ("ARP") is a defined
contribution plan administered by PASSHE.
PSERS provides retirement and disability benefits, legislative-mandated ad hoc cost-of-livingI
adjustments, and health care insurance premium assistance to qualifying annuitants. The Public
Scholol Employees' Retirement Code (Act No. 96 of October 2, 1975, as amended) (24
Pa.C.S.8101-8535) is the authority by which PSERS benefits provisions are established and
may be amended. The contribution policy for PSERS is established in the Public SchoolI
Employees' Retirement Code and requires contributions by active members, the employer (the
University), and the Commonwealth of Pennsylvania. Active members contribute at a rate of
between 5.25% and 7.50% of their qualifying compensation, depending upon when the activeI
member was hired and what benefit class was selected. The contribution rate for the University
is an actuarially determined rate. The rate was 2.39% and 2.38% of annual covered payroll at
June 30, 2010 and 2009. The University's contributions to PSERS for the years ended June 30,I
2010, 2009, and 2008 were approximately $29,000, $21,000, and $22,000, respectively, equal
to the required contractual contribution. PSERS issues a comprehensive annual financial report
that includes financial statements and required supplementary information for the plan. A copyI
of the report may be obtained by writing to Public School Employees' Retirement System, P.O.
Box 125, Harrisburg, Pennsylvania 17108-0125.I
SERS also provides retirement, death, and disability benefits, and legislative-mandated ad hoc
cost-of-living adjustments. Article II of the Commonwealth of Pennsylvania's
Constitution
assigns the authority to establish and amend the benefit provisions of the plan to the General
Assembly. The contribution policy for SERS, as established by the State Employees' RetirementI
Code, requires contributions by active members and the employer (the University). The
contribution rate for both active members and the University depends upon when the active
member was hired and what benefits class is selected. Active members contribute at a rate ofI
either 5.0% or 6.25% of their qualifying compensation. The University contributed at an
actuarially determined rate of either 2.52% or 3.15% of an active member's annual covered
payroll at June 30, 2010. The University's contributions to SERS for the years ended June 30,I
2010, 2009, and 2008 were $777,000, $715,000, and $719,000, respectively, equal to the
required contractual contribution. SERS issues a publicly available annual financial report that
includes financial statements and required supplementary information for the plan. A copy of theI
report may be obtained by writing to Commonwealth of Pennsylvania, State Employees'
Retirement System, P.O. Box 1147, Harrisburg, Pennsylvania 17108-0125.

I

I

Because the ARP is a defined contribution plan, benefits depend on amounts contributed to the
plan plus investment earnings. Act 188 empowers the Board to establish and amend benefit
provisions. The State Employees' Retirement Code establishes the employer contribution rate
for the ARP, while the Board establishes the employee contribution rates. Active membersI
contribute at a rate of 5% of their qualifying compensation. The University's contribution rate for
June 30, 2010 and 2009 was 9.29% of qualifying compensation. The contributions to the ARP
for the years ended June 30, 2010 and 2009 were approximately $2,450,000 and $2,379,000,I
respectively, from the University, and $1,284,000 and $1,269,000, respectively, from active
members.

33

I

Edinboro

University

of Pennsylvania

I

Notes to Financial Statements
June 30, 2010 and 2009

I

10. Termination

of the State

System

of Higher

Education

Benefits

In March 2010, PASSHE's Board of Governors approved a Voluntary Retirement IncentiveI
Program for both union and nonrepresented employees meeting certain age and service
requirements. Eligible employees who, by May 28, 2010, indicated their intent to retire between
June 18, 2010 and August 27, 2010, qualify for a cash incentive payout of between $6,000 andI
$30,000, depending on base salary and years of service. As of June 30, 2010, 14 eligible
University employees accepted the offer by signing a release and settlement agreement
releasing the University from all legal claims related to their employment and retirement. For the
year ended June 30, 2010, the University recorded an expense of $200,100 for the cash
incentive and $15,300 for associated Social Security and Medicare taxes, for a total expense of
$215,400. The cash incentive is not eligible for retirement benefits. The Association of
Pennsylvania State college and University Faculties declined to participate in this program.

I

I

11. Workers'
I

Compensation

The University is self-insured for workers' compensation losses. For claims occurring prior to
July 1, 1995, the University is responsible for claims less than $100,000; for claims occurring onI
or after July 1, 1995, the University is responsible for claims less than $200,000. Claims in
excess of the self-insurance limits are funded through the Workers' Compensation Collective
Reserve Fund (the "Reserve Fund"), to which all PASSHE universities contribute in the amountI
as determined by an independent actuarial study. Based on updated actuarial studies, the
University contributed $101,559 to the Reserve Fund during the year ended June 30, 2010 and
$46,431 to the Reserve Fund during the year ended June 30,2009.I
For the years ended June 30, 2010 and 2009, the aggregate liability for claims under the selfinsurance limit was $688,691 and $532,920, respectively. Changes in the University's workers'
compensation claims liability were as follows:

I

Year

2010
2009

Beginning of
Fiscal Year
Liability

Current Year
Claims and
Changes in
Estimates

$

$

532,920
601,160

307,728
159,697

I
I

I
I
~

I

34

BalanceI
at Fiscal
Year EndI

Claims
Payments

$

(151,957)
(227,937)

$

688,691
532,920

I

Edinboro

University

of Pennsylvania

I

Notes to Financial Statements
June 30, 2010 and 2009

I

12. Commitments

of the State

System

of Higher

Education

and Contingencies

General
I

I

The nature of the education industry is such that, from time to time, the Universities of
PASSHE are exposed to various risks of loss related to torts; alleged negligence; acts ofI
discrimination;
breach of contract; labor disputes; disagreements
arising from the
interpretation of laws or regulations; theft of, damage to and destruction of assets; errors
and omissions; injuries to employees; and natural disasters. While some of these claims
may be for substantial amounts, they are not unusual in the ordinary course of providingI
educational services in a higher education system. The University is self-insured for workers'
compensation up to stated limits (see Note 11). For all other risks of loss, the University
pays annual premiums to the Commonwealth to participate in its Risk Management
Program. The University does not participate in any public entity risk pools, and does not
retain risk related to any aforementioned exposure, except for those amounts incurred
relative to policy deductibles that are not significant.I
Additionally, the University has not reduced significantly any of its insurance coverage from
the prior year. Settled claims have not significantly exceeded the University's insuranceI
coverage in any of the past three years. It is not expected that the resolution of any
outstanding claims and litigation will have a material adverse effect on the accompanying
financial statements.I
Under the terms of federal grants, periodic audits are required and certain costs may be
questioned as not being appropriate expenditures under the terms of the grants. Such auditsI
could lead to reimbursement to the grantor agencies. The University's management believes
disallowances, if any, will be immaterial.
Construction

CommitmentsI

I

Authorized expenditures for construction projects unexpended as of June 30, 2010 and
2009 were approximately $22,486,000 and $49,404,000, respectively.

13. Subsequent
I

Event

In July 2010, the University was allocated a portion of the proceeds from the Series AL taxexempt bonds issued by the System through PHEFA totaling approximately $6,720,000. TheI
Series AL revenue bonds were used to advance refund the Series T revenue bonds, as well as
finance renovations to McNerney Hall, the Campus Police & Welcome Center, Compton Hall
Gymnasium, and the Porreco Center.

I
I
I
I

35

I

I

Edinboro University of Pennsylvania of the State System of Higher
Education
~

Years
Required Ended
Supplementary
June 30, 2010
Information
and 2009-~

(Unaudited)I

Schedule of Funding Progress for the System Plan (OPEB)
(in
"I thousands)
Actuarial
Accrued

Actuarial

Actuarial
Valuation
Date

JuIy 1,2007

Value of
Assets
(a)

~

~

UAAL as a
Percentage
of

Liability
(AAL)
(b)

-~-~~~:-

Unfunded
AAL (UAAL)
(b-c)

~--~~::-

Funded
Ratio
(a/b)

---~::-

Covered
Payroll
(c)

$

33,188

Covered
Payroll
([b-a]/c)I

-~:::-

July 1, 2008

-70,449

70,449

0%

34,410

204.7%

July 1, 2009

-75,697

75,697

0%

35,442

213.6%

The information below relates to the Commonwealth's REHP as a whole, i.e" it is inclusive of all
participating Commonwealth agencies and instrumentalities. Nearly all Commonwealth agencies
and instrumentalities participate in the REHP.
Schedule of Funding Progress for the REHP (OPEB)
(in thousands)
.,
.."
Actuarial
Actuarial
Accrued
Value of
Liability
Unfunded
Funded
Assets
(AAL)
AAL (UAAL)
Ratio
(a)
(b)
(b-c)
(a/b)

Actuarial
Valuation
Date
July 1, 2007

$

38,500

$

7,297,500

$

-

Covered
Payroll
(c)

7,259,000

.52%

July 1, 2008

60,000

12,863,270

12,803,270

.47%

3,559,000

360%

July 1, 2009

47,920

13,257,570

13,209,650

.36%

4,093,000

323%

See notes to financial statements

36

$

3,559,000

UAAL as a
Percentage of
Covered
Payroll
([b-a]/c)
$

203%