Section 13.2 - Financial Reports
Date: February 2005
Approved: Senior Associate Vice President for Business and Finance
University of Illinois financial reports provide information helpful in evaluating how resources are managed to attain the University's goals. To do this, the principal financial reports of the University include:
- Statement of net assets
- Statement of revenues, expenses and changes in net assets
- Statement of cash flows
These financial statements are prepared, as required, using accounting principles generally accepted in the United States, as prescribed by the Governmental Accounting Standards Board (GASB), which establishes standards for external financial reporting for public colleges and universities.
To account for the diversity of resources available, the principles and practices of fund accounting are used as the basis for maintaining the University's accounting records. The University's financial statements are prepared on a consolidated basis, which focuses on the University's activities and financial position as a whole.
The annual public financial report of the University, Annual Financial Report, presents the University's financial activities for the fiscal year covered and the financial position at the close of the period and prior year partial comparative information. Also contained in the Annual Financial Report is an aggregate financial statement presentation of the University's related organizations in a separate column as components of the University of Illinois. The report contains basic financial statements, supplementary schedules, and the independent auditor's opinion of these statements issued by the Special Assistant Auditors for the State Auditor General. This information is published so the public and members of groups responsible for the University's support have necessary information about its financial affairs.
Other separate annual reports, as required by law or by bond indentures, are also published and distributed.
Statement of Net Assets - Statement of the financial position of the University at the end of the fiscal year, which includes all assets and liabilities of the University using the accrual basis of accounting.
Statement of revenues, expenses, and changes in net assets - Reports the University's results of operations for the fiscal year.
Statement of cash flows - Reports information about the University's financial results by reporting the major sources and uses of cash during the fiscal year.
Supplementary materials - Supplementary schedules and materials prepared and published as necessary to provide details in support of the basic statements that may be useful to various interest groups.
Definition of Terms
The procedure by which resources are classified into funds according to specified activities or donor objectives for financial accounting and reporting purposes. This classification is according to donor specifications or regulations, restrictions, or limitations imposed by sources outside the University, or with directives issued by the Board of Trustees or delegate.
Funds, Fund Types, and Fund Groups
An accounting entity with a self-balancing set of accounts consisting of assets, liabilities, and fund balances. Separate funds are maintained within each fund type to insure limitations and restrictions placed on the use of resources are observed. Fund types of similar characteristics have been established in Banner to represent funding from various sources and roll up to defined fund groups. The five defined fund groups used by the University are:
- Current funds
- Endowment and similar funds
- Loan funds
- Plant funds
- Agency funds
This fund group includes those resources of the University expendable for carrying out the primary missions of the University (that is, instruction, research, public service, and economic development). They represent resources available for general operations. The term "current" means the resources are spent in the near future for operating purposes.
Current restricted funds - Funds available for operations that have externally established limitations as to specific purposes, programs, campus units, schools, or colleges.
- Federal appropriations - Appropriations made to the University by the federal government for operating purposes, principally in agriculture.
- Sponsored programs - Grants, and contracts from federal, state, and private sources.
- Trust activities - Private gifts, endowment farms, endowment income, and practice plans.
Unrestricted current funds - Resources received with no limitations placed on them by external agencies or donors.
- State appropriations and income fund deposits - Appropriations made to the University by the State Legislature and receipts deposited into the income fund for operating purposes.
- Institutional support - Funds derived from indirect cost and other cost recovery programs, as well as unrestricted gifts.
- Other institutional support - Unrestricted gifts and revenues from patents, copyrights, and royalties.
- Departmental activities - Funds relating to various self-supporting activities of the University provided to external customers, including the hospital and independent operations.
- Auxiliary enterprises - Funds relating to various auxiliary enterprises operated by the University for students, faculty, and staff (for example, bookstore, housing, and unions).
- Stores and services - Funds relating to the various storeroom and service activities operated by the University for internal customers.
Endowment and similar funds
Donors or other outside agencies sometimes set up funds with the stipulation that the principal remain intact. The income generated from such principal may be expended, but generally for some specific purpose. This group also contains several other types of funds that are similar in nature to endowments. Separate funds are kept to show the various accountabilities.
This fund group includes loans available to students, faculty, and staff. Because these funds come from a variety of sources, separate fund types and funds are maintained for accountability.
This fund group is used to account for the acquisition, construction, and maintenance of the University's physical plant and to control the resulting assets:
- Investment in plant - All long-lived assets in the service of the University except those of endowments and similar funds.
- Renewal and replacement - Funds transferred from various sources to finance maintenance and replacement of physical assets.
- Retirement of indebtedness - Accumulation of resources for interest and principal payments and other debt service charges, including contributions for sinking funds, relating to plant fund indebtedness.
- Unexpended plant - Unexpended resources from various sources used to finance the acquisition of plant assets.
This fund group is used to account for resources held by the University as custodian or fiscal agent for others, including student organizations.
Please send questions regarding this policy manual to OBFSPolicies@uillinois.edu.
Last Updated: March 23, 2008