CAMPION COLLEGE BOARD OF REGENTS
POLICY: Financial Overview Report
CODE: 6.1.1
Date Initially Approved: February 10, 2010
Date Revised: February 8, 2012
1. Overview
These notes have been prepared using the 2011 – 2012 budget as outlined in Campion College’s monthly financial statements for illustration purposes.
The College’s annual budget consists of approximately $6.2 million in revenues and a corresponding amount in expenditures. The budget is prepared on a conservative basis and as a minimum targets break-even. Traditionally the College does not approve a deficit budget.
The primary sources of revenue are operating and capital grants from the Province of Saskatchewan (60%) and student tuition fees (35%). The remaining 5% is a result of investment income, rent and donations.
The primary expenditure categories are salaries and benefits (75%) and operating and maintenance costs associated with the physical facility (15%). The key drivers for salary and benefit costs are the size of the staff complement and the outcome of contract negotiations. The key drivers for the College’s costs associated with its $2.6 million investment in its building include fluctuations in utility costs and the need to make necessary investments in an aging facility.
The key risks associated with revenues are the limited control over the provincial government’s annual funding commitment and the ability to maintain necessary student enrollment relative to the size of the faculty. The key risks associated with expenditures are the matching of faculty and sessional lecturers to the student enrollment; the costs associated with keeping an aging facility functional and operating in a healthy and safe manner; and changes to provincial legislation with respect to standards for health, safety and access requirements related to public facilities.
2. Revenues
The primary revenue sources for Campion College include the following:
a. Grants from Province of Saskatchewan – The annual operating grant is for 2011-12 fiscal year is approximately $3.4 million while the annual maintenance grant is currently approximately $67,000. Combined these grants represent approximately 60% of annual budgeted revenues. In conjunction with the University of Regina and the other federated colleges, Campion College’s management outlines its requirements to the Province of Saskatchewan in the fall and is advised close to the tabling of the Provincial Budget of the grant levels.
b. Student Tuition Fees – Projected fees are presently approximately $2.3 million. This represents 35% of the annual budgeted revenues. Starting in the 2009 – 2010 academic year the tuition fees are based on 5 year tuition fee sharing arrangement with the University of Regina. This agreement provides Campion College with 10% share of tuition fees for Arts, Science and Fine Arts (Liberal Arts), while in return Campion College agrees to teach 10% of the Liberal Arts classes for the entire University of Regina community.
c. Other Revenue – The College generates revenue from endowment income, rental income, donations, interest and campaign income. The endowment income is related to earnings generated from monies invested through the Jesuits of Upper Canada (JFUC) (Board Policy 6.1.7.1). Rental income is derived from an arrangement with the cafeteria operators, while the other categories of income are derived from interest paid on monies in the bank account, short-term investments and funds derived from supporters of Campion College.
3. Expenditures
a. Salaries and Benefits – There are three primary groups of employees within Campion College. The first is faculty and sessional lecturers whose salary and benefits are established through the collective bargaining agreement negotiated with CAUT (Canadian Association of University Teachers). There is approximately 50 staff in this group. The second group is support staff whose salaries generally follow the collective bargaining agreements in place at the University of Regina through APT (Administration Professional and Technology) and CUPE (Canadian Union of Public Employees).There are approximately 20 staff in this group. The third group is the College’s senior management group which is comprised of the President, Dean and Executive Director of Administration and Finance. Their salaries generally follow those of the faculty increased by an allowance for the supervision of staff.
The Collective Bargaining Agreement with URFA expired July 1, 2011. The Collective Bargaining Agreement with APT covers the same period as URFA, while the CUPE Agreement expires on December 31, 20012.
b. Building Costs – These include capital expenditures utilities, maintenance, annual contribution to a capital fund and a payment to the University of Regina for Infrastructure Costs to pay the College’s share of maintaining the university buildings and grounds.
Capital expenditures are approved by the Board of Regents as part of the annual budget review and approval process. The types of expenditures in this category support the Board’s goal of having an environmentally sustainable institution. The funding source for these expenditures is the “Capital Retention” Fund.
Utility and maintenance costs include water, electricity, refuse & disposal, natural gas and building maintenance. Annual costs are approximately $350,000. The College contributes $50,000 annually to the “Capital Retention” Fund and through the Infrastructure Services Agreement (2011-1016) 10% of the annual operating grant and 10% of the revenue from the Fee Sharing Agreement ($539,000 in 2011-12) is paid to the University for Infrastructure Costs.
The College’s budget includes $.8 million for all costs related to the maintenance, operation and improvements to the building. This represents approximately 15% of the College’s annual budget.
c. Grants, Awards, Scholarships – The annual budget is approximately $65,000. The funding for this expenditure category is investment earnings. The award of individual scholarships is coordinated by the College’s “Awards Officer” who applies the criteria. The criteria for scholarships are established either by individual donors (i.e. Hill Scholarship Fund) or by the College’s staff if requested by the donor.
d. Entertainment – The annual budget includes $10,000 to be used at the discretion of the President for such things as external stakeholders, volunteers and general community support. While the actual expenditures are reviewed by the Executive Director Administrative Services, the Board’s control is exercised through ensuring the annual budget is not exceeded.
4. Statement of Financial Position
a. Current Assets:
- Bank - The primary sources of cash for the College are Province of Saskatchewan operating and capital grants and tuition fees. Secondary sources of cash include endowments and donations. The operating grants are received on a monthly basis; tuition fees are received primarily in September and January; and endowment and donations are received anytime during the year. Normally surplus cash is retained in the College’s bank account and earns interest at the going rate. Funds received for specific purposes (i.e. scholarships) or designated for the “Capital Retention Fund” are normally transferred to the Jesuit Fathers of Upper Canada for investment in accordance with the College’s investment policy (6.1.7.1).
- Tuition Fees Receivable - Tuition fees are collected by the U of R or by Campion College directly. The University of Regina and Campion complete a settlement process to recognize actual monies received by each institution that incorporates the tuition-sharing agreement. Settlements generally occur towards the end of each semester (i.e. December and April).
- JFUC Investments – Campion College invests available funds through an investment program managed by the Jesuit Fathers of Upper Canada. The College’s investment statement and the responsibilities of the various parties are articulated in The Board of Regents Policy Manual (6.1.7.1).
- Wood Gundy – Campion College established a Faculty Renewal Fund to provide benefits to staff that elected to participate in a voluntary retirement plan. The available monies are invested through Wood Gundy. Actual earnings are distributed to plan members annually. This plan is closed as there is no more staff eligible to participate in this program. Upon a member’s death, the remaining funds allocated to the member revert to the general operations of Campion College. There is an offsetting liability for this investment as the funds are considered to be solely for the benefit of the plan members.
- Other Short Term Investments-Campion College invests in short-term cashable and guaranteed investment certificates in order to obtain a higher level of interest earned. The College’s investment statement and the responsibilities of the various parties are articulated in The Board of Regents Policy Manual (6.1.7.1).
b. Fixed Assets:
- Building and Equipment – The College has invested approximately $4 million in fixed assets (property, plant and equipment). The largest component of this investment is the Campion College building whose capital cost was $2.6 million. The other asset categories are computer equipment, office equipment and library books. These assets are depreciated over their expected useful life which ranges from 3 years (computers) to 10 years (office equipment and library books) to 50 years (Campion College). Additions to the fixed assets are approved through the annual budget process.
- Pension Accrual – Campion College participates in two pension plans administered by the University of Regina. To the extent that they impact the College’s Statement of Financial Position these are defined benefit pension plans. The College has a .7% share in the non-academic plan a 2.5% share in the academic plan.
The plans’ financial position is determined by an actuary through an actuarial valuation. A full evaluation, which is required to be completed tri-annually, was last completed as at December 31, 2007, December 30, 2009 and again in April 30, 2011. The intermittent year’s financial position of the plan is determined through an extrapolation of the full valuation. In years where this account is reflected in the asset section of the financial statements it means that the assets of the plan exceed its benefit obligations.
c. Liabilities:
- Early Retirement Program – The basis for this liability is outlined in “Current Assets” “Wood Gundy Investment”. This amount mirrors the balance of the asset account since it belongs to the plan members during their life.
d. Fund Balances:
- General Operating Surplus - This consists of the accumulated operating surplus from the most recent completed year of operations and the year-to-date surplus for the current year.
- Trust and Endowment – The “expendable” refers to monies that have been set aside for internal purposes (i.e. “Capital Retention”) or donated by external parties for a specific purpose (i.e. Hill Scholarship, M. Volk Memorial Scholarship Fund). The “expendable” refers to monies that are earned through the College’s investment and can be used for their intended purpose. Their intended purpose includes funding scholarships and such things as the Nash Lecture series.
The earnings for these funds are derived from income generated through investments with the Jesuit Fathers of Upper Canada. Funds from this investment are disbursed to Campion College, regardless of actual returns, at the equivalent rate of return of 5%. This has the effect of smoothing earnings
- Equity in Fixed Assets - This represents the net of the College’s gross cost of buildings, computer equipment, office equipment and library collection less accumulated depreciation, rates range from 2% for the building to 33% for computer equipment.
5. Statement of Trust Fund Equity
This statement contains funds that have been received by Campion College and established as trust funds. A brief explanation of the categories for these funds follows:
There is in excess of $2.5 million in internally restricted funds. The largest funds established by management are the “Capital Retention Fund” ($1 million), the “Chaplaincy Fund” ($475,000) and “The General Scholarship Fund” ($400,000).
The largest internally restricted fund from an outside donor is “The McCusker Fund” ($600,000).
6. Financial Governance
a. Finance and Audit Committee
The Board of Regents has established a Finance and Audit Committee. The objective of the Committee is to assist the Board in fulfilling its fiduciary responsibilities in regard to overseeing of financial reporting processes; internal control systems; and coordinating communication between the Board and the external auditors. The Terms of Reference for the Committee are outlined in Board Policy 5.2.2.
b. Budget
The Board of Regents has established a policy (6.1) to deal with the process to be utilized for the development, review and approval of the Campion College annual budget. An important component of the budget review process is to ensure that the appropriate financial resources are allocated to support the College’s strategic priorities.
The strategic priorities are reviewed annually. At present they are as follows:
• Partnerships – includes establishing a positive relationship with the University of Regina and other Federated Colleges; strong relations with our Catholic education partners; formal relationships with Community Partners.
• Identity – Campion is well known as a great place for students.
• Education – includes an excellent undergraduate education with quality course offerings and quality faculty; and an enriched undergraduate liberal arts education with opportunities for service in the wider community.
• College Culture – includes a welcoming and inspiring environment for all; a strong team who live by our vision, mission and values; high quality responsive student services; an environmentally sustainable community; and strong ties with Society of Jesus in its work.
• Alumni – an active and effective alumni network and support system.
• Facility – includes an environmentally sustainable facility and physical plant and space allocation that supports the strategic direction of the College.
• Accountable Governance and Administration– includes an open and transparent governance and administrative process; an effective governance model which is understood by the Board and College employees; sufficient resources to meet our educational responsibilities; current board legislation, by-laws, policies and procedures; and current administrative policies and procedures.
c. External AuditorTo assist in discharging its fiduciary responsibilities the Board of Regents retains the services of an external auditor. The external auditor is appointed for a three year term subject to a satisfactory annual performance evaluation and confirmation by the Board of Regents. The Board may extend the appointment for a further period not to exceed three years. Policy 6.1.6.1 outlines in greater detail roles and responsibilities, services, the appointment process and performance evaluation criteria.