Free «Public University Analysis» Essay Sample

Identify and analyze the employee pension plan disclosures in the financial statements. Evaluate the impact of the GAASB proposed changes to the pension liabilities on the financial statements of the institution.

This study focuses on the University of Maine, where the employee pension plan is discussed. According to the university, the defined Benefit Plan has been grouped into two categories. Pension fund is one of the groups having a total of thirty nine million dollars in the month of June. The institution realizes an actuarial valuation each year. Recent valuation reports show that in the month of July, 2011, there was a total of one and a half million dollars in terms of unfunded Actuarial Accrued Liability.

This fund gave a return of negative half percent in the fiscal year 2012. This value is a result of the market appreciating, investor’s manager’s utilization and the allocation of assets. This fund has a five year return realization of one and a half percent; this puts the fund in the sixty fourth percentile.

In the month of June, 2011, two exposure drafts changed on local and state government’s report and accountability in terms of pension benefits that was proposed by GASB. These changes are intended to improve the usefulness of pensions and benefits.

The government has to carry out some steps in materializing changes that affect pension liability. First, it has to project all future payments on benefits for both current and former beneficiaries and employees. Secondly, it has to discount the future benefits that have been projected to their current value. Finally, the value that has acquired should be used to cater for the future and past employee accountability.

This means that for the financial statements for the University of Maine, the initial approach will be discarded. The proposal advocates that for any benefits that have been discounted with rates that are lower, the current value should be higher. This increases the intended pension liability for the university. The government can now choose from six methods of determining actuarial costs for present years, therefore, it becomes difficult to compare the governments’ accounts.

Identify and analyze the economic conditions that will affect the future growth and success of the institution.

In the University of Maine, every dollar that is spent forms part of its economic multiplier. The Impact Analysis for Planning was used in developing a model that gives the economic input and output of the institution. The University of Maine has got its economic improvement fund. This sector is a key in running all tertiary and primary developments in the institution. The center focuses on promoting and globalizing its research work. This initiative builds on the university’s marketability in technological innovations. For instance, in the year of 2009, it used over two hundred and fifty thousand dollars in ensuring research is smooth. This fund has created a huge number of job opportunities for many individuals.

The institution has a rapport with its environment in terms of community support. The fact that the university offers quality in various fields leaves the community in adoration. The support focuses on achieving higher standards. It is this reputation that favors the admission trends for the institution. The university also donates lots of hours for community building.

University of Maine is made up of seven public universities that purpose to offer academic guidance. These institutions form a strong force for diversity in many regions; this feature allows the university the upper hand in terms of dominance. More centers are vital for Maine’s economic growth as the form convenient points of learning for many people.

Review and evaluate the treatment of federal grants such as Pell grants, supplemental grants, and work study on the revenue reported for the institution.

During the Fiscal year 2012, federal agencies offered a sum of sixty million dollars in form of contact and grant revenues. There was a decrease of fourteen million dollars from the preceding year. This is because a large amount of capital grant on construction was given to the university by the National Institute of Standards and Technology in 2011.

For 2012, it was the National Science Foundation that was the primary source of these revenues. The second one was the United States Department of Agriculture. A sum of fourteen million dollars was channeled to various departments to the university by NFS, while ten million dollars were given for the agricultural sector of the center. Nine percent of the ten million by the U.S. Department of Agriculture was given to its agricultural department, while the rest was taken to its cooperative extensions.

Compare the treatment of endowments, earnings on endowments, and restricted funds with GAASB requirements.

The University of Maine has its total endowments forming a significant percentage of its overall returns. These endowments consist of the institution’s economic strength and market share. These endowments are distributed so as to ease market volatility. It uses a method that applies a three year average value on the market with a certain percentage on spending. In the year of 2012, the center used a rate of over four and half percent; the next year had exactly four and half percent. In achieving better corpus preservation, the university has to reduce the percentage by quarter so that it falls in place with other endowments on education.

GAASB has come up with rules that govern endowments in universities. This act was for the improvement on financial reporting of institutions. It is in the requirements of the rules that all endowments made be fair valued while reporting. The University of Maine has managed to meet the need for a report on endowments that is of a fair value. They have achieved a consistent fair valued endowment report as they break them down into individual categories of use. The requirements call for a distinct value of assets and not basing on historical accounts and records. This boosts the reports on institutional financial history for the University of Maine.


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