ANNUAL REPORT
FOR THE YEAR ENDED MARCH 31, 2011 Prepared for the Government of Alberta
EXCELLENCE INNOVATION SUCCESS 1
TABLE OF CONTENTS
Accountability Statement ........................................................................................................................................... 1 Board Of Governors .................................................................................................................................................... 2 Management’s Responsibility For Reporting................................................................................................................ 3 Message From The Board Chair .................................................................................................................................. 4 Message From The President ...................................................................................................................................... 5 At The Forefront ......................................................................................................................................................... 7 Quick Facts ................................................................................................................................................................ 8 Operational Overview ................................................................................................................................................. 9 Major Accomplishments ........................................................................................................................................... 11 Goals, Expected Outcomes And Performance Measures ............................................................................................ 17 A Shared Responsibility .......................................................................................................................................... 21 Management Discussion And Analysis ..................................................................................................................... 22 Audited Consolidated Financial Statements ............................................................................................................ 32
ACCOUNTABILITY STATEMENT June 22, 2011 The University of Calgary’s annual report for the year ended March 31, 2011 was prepared under the Board’s direction in accordance with the Government Accountability Act and ministerial guidelines established pursuant to the Government Accountability Act. All material economic, environmental or fiscal implications of which we are aware have been considered in the preparation of this report.
Douglas Black Q.C., LL.B. Chair, Board of Governors
1
BOARD OF GOVERNORS Board Membership – Voting Douglas Black Bonnie DuPont Elizabeth Cannon Jim Dinning Keith Dobson Joe Doolan Paul Farion John Hickie Kabir Jivraj Patricia Johnson Brenda Kenny Nick Kirton Jeff LaFrenz James Lange Ken McKinnon Paul Rogers Mike Shaikh Kay She William Smith Lauren Webber Steve Wilson
Board Chair Board Vice-Chair President Chancellor General Faculties Council Public Alumni Alumni Public Alberta Union of Public Employees Public Public Senate Graduate Students’ Association, President Public The University of Calgary Faculty Association Public Students’ Union Public Students’ Union, President Public
Board Officials – Non-Voting Charlene Anderson Gary Durbeniuk Bob Ellard Jonathan Gebert Alan Harrison Diane Kenyon Jon Meddings Elizabeth Osler Ann Tierney
General Counsel Vice-President (Development) Vice-President (Facilities Management and Development) Vice-President (Finance and Services) Provost and Vice-President (Academic) Vice-President (University Relations) Interim Vice-President (Research) University Secretary and Associate General Counsel Vice-Provost (Students)
Community Members – Voting Kay Best David Day Stephanie Felesky Charles Fischer Randy Gossen Grant MacEachern Al Monaco Gord Richie Harry Roberts
Audit Committee Environment, Health, Safety and Sustainability Committee Investment Committee, Human Resources and Governance Committee Audit Committee Environment, Health, Safety and Sustainability Committee Investment Committee Investment Committee Investment Committee Audit Committee
2
MANAGEMENT’S RESPONSIBILITY FOR REPORTING Reliable, accurate, and objective information The University of Calgary’s management is responsible for the preparation, accuracy, objectivity and integrity of the information contained in the Annual Report including the financial statements, performance results, and supporting management information. Systems of internal control are designed and maintained by management to produce reliable information to meet reporting requirements. The system is designed to provide management with reasonable assurance that transactions are properly authorized, are executed in accordance with all relevant legislation, regulations and policies, reliable financial records are maintained, and assets are properly accounted for and safeguarded. The Annual Report has been developed under the oversight of the institution audit committee, as well as approved by the Board of Governors and is prepared in accordance with the Government Accountability Act and the Post-secondary Learning Act. The Auditor General of the Province of Alberta, the institution’s external auditor appointed under the Auditor General Act, performs an annual independent audit of the consolidated financial statements in accordance with generally accepted accounting principles.
M. Elizabeth Cannon President and Vice-Chancellor
Jonathan Gebert Vice-President (Finance and Services)
3
MESSAGE FROM THE BOARD CHAIR Excellence, Innovation and Success I am pleased to present the University of Calgary’s Annual Report for 2010-11. This report highlights the achievements of our faculty, staff and students who share responsibility for the excellence, innovation and success highlighted within these pages. Our community rallied around a plan that focused our collective attention more sharply on our academic priorities. Because of their commitment to a combination of strategic investments, restrained spending, and revenue generation, I am pleased to report significant progress against the strategic priorities that we set for ourselves: y Aligning our activity with our fundamental academic principles; y Assuring the success of the united Faculty of Arts; and y Balancing the budget and achieving greater financial stability. Our commitment to these priorities allowed us to grow our resources, enhance our reputation, and improve our service to students and society such that we now find ourselves on a more solid foundation among Canada’s major research institutions. As we plan for our 50th anniversary in 2016, I am confident that our core principles—student success, excellence in research, scholarship and creative activity, interdisciplinary education and research, and return to community—will continue to guide our activity and the allocation of our resources in the years ahead.
Douglas Black Q.C., LL.B. Chair, Board of Governors
4
MESSAGE FROM THE PRESIDENT Pride, Leadership and Service One year ago, we stood together to honour our past, reflect on the present and, most importantly, to lift up our eyes to the beginning of a new era of pride, leadership and service for the University of Calgary. From that vantage point, it was clear that we needed to develop a shared vision for the University of Calgary— one that would fill our community with an abundant sense of pride; one that would celebrate us as a leading research-intensive institution with a strong educational mission; and one that would recognize us as a well-governed and effective service organization. At that time, I invited our community to join me in the development of this vision so that the University of Calgary of tomorrow would be even more successful than it is today. One year later, I am pleased to report that our vision for the future is becoming more vivid, more compelling, and more engaging. Through Project Next, the university undertook a strategic planning process that brought students, faculty, staff and community together to develop core values and a strategic direction that will guide our institution into the future. By 2016, we will lead the nation in terms of student engagement. More of our research programs will become leading examples of their kind in Canada. We will continue to grow the already successful connections we have made with our broader community that make us the envy of every other institution in the country. Our road to autonomy in 1966 was paved by pioneers—Calgarians whose unwavering determination and commitment to establish a local university was guided by a simple vision of a great city built on a foundation of higher learning. As we approach our 50th anniversary in 2016, we understand that our prominence on the world stage will be shaped by this same spirit—a community demonstrating its commitment and determination to the success of a great university in a world class city.
M. Elizabeth Cannon President and Vice-Chancellor
5
AT THE FOREFRONT Excellence, Innovation and Success The University of Calgary is a young and ambitious research-intensive institution with almost 4,700 faculty and staff offering over 100 different academic programs through 14 faculties and 53 teaching departments. All this adds up to an endless opportunity for new ideas, exploration and discovery. From the individual learning experiences of each of our over 30,000 students to hundreds of globally recognized researchers performing cutting-edge work, we share responsibility for excellence, innovation and success. Being situated in Calgary, one of Canada’s most dynamic cities and a global energy hub means the University of Calgary has the unique advantage—and pressing responsibility—to find better, cleaner ways to extract oil and gas to fuel the global economy. We are leading the world in research in energy and the environment. And our students and faculty members are making huge strides in medicine, biomedical engineering, and many other exciting areas of interdisciplinary research. The depth and breadth of intellectual discovery at the University of Calgary over the course of a year is truly staggering. In the following pages, we invite you to read just a few examples of how teaching, research and creative activity at the University of Calgary are making a difference in our community, our country and our world.
7
QUICK FACTS Growing our Resources Enhancing our Reputation Improving our Service to Students and Society
2009
2010
2011
CHANGE
TOTAL STUDENTS
27,915
29,663
30,476
813
UNDERGRADUATE STUDENTS
22,539
23,824
24,586
762
GRADUATE STUDENTS
5,376
5,839
5,890
51
DEGREES & DIPLOMAS AWARDED
6,001
5,888
6,157
269
FACULTY AND STAFF
4,921
4,782
4,691
(91)
245
272
276
4
8
9
8
1
BUDGET ($B)
0.971
1.032
1.072
0.040
UNRESTRICTED NET ASSETS ($M)
-59.4
-10.6
36.5
47.1
340
442
497
55
SPONSORED RESEARCH INCOME ($M)
NATIONAL RESEARCH RANKING
ENDOWMENT BALANCE ($M)
8
OPERATIONAL OVERVIEW Vision The University of Calgary is a passionate community of scholars dedicated to high-level teaching and research created and shared with students to the benefit of society.
Mandate Founded in 1966, the University of Calgary is governed by a Board of Governors, and operates as a public Comprehensive Academic and Research Institution under the authority of Alberta’s Post-secondary Learning Act. Education and research at the University of Calgary serve the needs of local, provincial, national and international communities. Through its inquiry-based teaching and research programs and strategic and entrepreneurial partnerships, the university’s faculty, staff and students pursue knowledge, contribute to the development and critique of societal goals, and engage in creativity and innovation in many fields. The university’s goal is to be recognized internationally for the success of its students and for excellence in research, scholarly and creative activity. The university offers a broad selection of programs of study including baccalaureate, graduate professional, and research-based master and doctoral degrees. It also offers a wide assortment of credit and non-credit diplomas and certificates and executive development programs. Building on strengths in disciplines in the areas of fine arts, humanities, sciences and social sciences as well as in the professions, including architecture, business, education, engineering, environmental design, kinesiology, law, medicine, nursing, social work and veterinary medicine, the University is committed to offering an experience that provides both disciplinary and interdisciplinary education to its students. A number of the programs it has developed are unique within Alberta. As an autonomous institution working within Campus Alberta, the university collaborates with other post-secondary institutions in the delivery of collaborative degrees, the use of transfer and articulation agreements, the sharing of facilities and faculty members, and the offering of degree-completion opportunities to students from both rural and urban communities. Working with the private sector and all three levels of government, the University of Calgary takes a leadership role within Alberta for the further development of educational and research programs in areas designated as strategic academic priorities. At the University of Calgary, research, teaching and scholarship are interdependent and steeped in the principle of academic freedom. The university encourages, supports and disseminates research, scholarship, innovation, and creative activity in many forms and integrates these activities into both the graduate and undergraduate curriculum. Students and faculty at the University of Calgary conduct basic and applied research at the frontiers of knowledge and transfer knowledge to society, locally, regionally, nationally and internationally. The university stimulates and supports the commercialization of research and innovation for the common good and for the prosperity of the province, the nation and the world. Students and other scholars, including post-doctoral fellows, are attracted to the University of Calgary for the opportunity to refine their research, teaching and mentoring skills. The development of programs of study and of research partnerships across Alberta, nationally and internationally, extends the university’s engagement with the broader community and enlarges the vision of its students, faculty and staff. International partnerships, alliances, and development projects, together with study abroad initiatives, allow the university to contribute to and benefit from a network of world-wide interactions that enrich the student experience.
9
The University of Calgary offers a comprehensive set of programs, facilities, and services to provide students with an excellent experience both inside and outside the classroom. The university supports the student experience with a range of services including academic and career advising, student life programming, health and wellness services, and academic success programs. Community service learning, cooperative and internship placements, and international exchanges all provide experiential learning opportunities to complement students’ classroom experiences. The university supplements and enriches its face-to-face instruction with communication and digital technologies, library and cultural resources, and both distance education and blended learning techniques. The University of Calgary is responsive to the expectations of the communities it serves in the delivery of its educational and research programs. The university contributes in diverse ways to the cultural, social and economic life of the province, through striving for high quality in its graduates, its research, and its service to the community. The University of Calgary is committed to the goals of environmental and financial sustainability, and to making a positive impact on individuals and communities.
10
MAJOR ACCOMPLISHMENTS Quarter 1 (April to June)
Quarter 2 (July to September)
New Faculty of Arts
UC-Qatar inaugural convocation
The official launch of the Faculty of Arts on April 1 followed months of planning to combine the faculties of communication and culture, fine arts, humanities and social sciences.
Twenty-four students received their Bachelor of Nursing Degree at the University of Calgary–Qatar inaugural Convocation.
Alberta invests in clean energy research
University of Calgary ranks high in Corporate Knights
$25 million in investments from the Governments of Alberta and Canada helped to create a University of Calgary-anchored research network to advance clean energy development in Canada.
For the second time in a row, the Schulich School of Engineering ranked first in Canada for integrating sustainability into engineering education. The Haskayne School of Business ranked second.
Solar car hits Alberta highway
Developing the world’s future energy leaders
The latest solar car headed out on a seven-day tour of the province to test its performance before entering in the American Solar Challenge, a race from Tulsa, Oklahoma to Chicago, Illinois.
IHS Cambridge Energy Research Associates and the Haskayne School of Business teamed up to offer the Global Energy Executive MBA program, starting in 2012.
Cogeneration plant on time and on budget
Hotchkiss Brain Institute (HBI) receives $2.3 million
Minister of Industry, Tony Clement paid a visit to the University of Calgary’s new cogeneration plant which is funded through the Government of Canada’s Knowledge infrastructure Program.
Support for the HBI Nerve Repair and Regeneration Facility from the Canada-Alberta Western Economic Partnership Agreement, the University of Calgary, and Integra LifeSciences Corporation will make it easier for promising treatments to reach patients worldwide.
Minister approved new mandate A new mandate was approved by the Minister of Advanced Education and Technology that more clearly defines the University of Calgary role within the provincial system as a comprehensive academic and research institution.
Improving access to justice Canadian legal history was made when leaders of the University of Calgary’s law school and Thompson Rivers University in Kamloops, B.C. signed a partnering agreement to create the country’s first new law school in three decades.
Dinos ranked the top football team in the nation For the first time in 17 years, the University of Calgary was voted the number one football team in the Canadian Interuniversity Sport poll.
Spring convocation ceremonies conclude Chancellor Joanne Cuthbertson presided over her final graduation ceremonies at spring convocation where more than 4,500 University of Calgary students graduated during the five days of ceremonies.
Chancellor Cuthbertson Student Success Centre Opens Chancellor Joanne Cuthbertson and husband, Board of Governors Vice-Chair Charlie Fischer donated $1 million to create the Joanne Cuthbertson Student Success Centre.
11
New Killam Trust programs
and the Graduate Representative Council of the Graduate Students’ Association approved twenty-five projects valued at $0.4 million.
Four new Killam Trust programs will provide more potential awards and prizes for University of Calgary researchers across a broader scope of research.
Strengthening ties to China
Faculty of Arts Program Information Centre
President Elizabeth Cannon’s first international visit since taking office provided an opportunity to renew relationships in education, research, and technology commercialization.
Connecting undergraduate students with a variety of services from academic program advising to referral procedures is the purpose of the Program Information Centre located in the Social Sciences Building.
Mayor Naheed Nenshi, University of Calgary alumnus
Quarter 3 (October to December)
His Worship Mayor Nenshi is Calgary’s first mayor to enter office as a former president of the Students’ Union and an alumnus who earned a Bachelor of Commerce degree with distinction.
Installation of the President Elizabeth Cannon was installed as the eighth President and Vice-Chancellor of the University of Calgary on October 6, 2010.
U.S. mid-term election results debate Hosted by the School of Public Policy, Republican Fred Thompson and Democrat Howard Dean were on campus to dissect the results of President Barack Obama’s first major political test.
WestJet founder accepts University of Calgary position Clive Beddoe, founder and chairman of WestJet Airlines Ltd., accepted the Haskayne School of Business 2010-11 Jarislowsky fellowship in business management.
50 years of history
Nexus Dialogue Series
Opened on October 28, 1960, the Arts and Education (now Administration) and Science and Engineering (now Science A) buildings celebrated their 50th anniversary as the oldest buildings on campus.
Community leaders launched the Nexus Dialogue Series —a new community engagement program that will shape how the university contributes to Calgary’s growth and success.
Faculty of Medicine celebrates its 40th anniversary
Downtown Campus opens
October 29, 2010, marked the Faculty of Medicine’s 40th anniversary of the first class to start the medical school at the University of Calgary.
The Downtown Campus opened its doors to programs offered through Continuing Education, the Haskayne School of Business, and the School of Public Policy.
‘Q’ opens at the University of Calgary
Enhancing the student experience
The Students’ Union opened the first ever-on-campus space devoted to serving lesbian, gay, bisexual, transgendered and queer community and their allies.
The Chronicle of Higher Education recognized the University of Calgary for its commitment to placing volunteering on student records.
University of Calgary enrolment at an all-time high
$2 million to enhance the student experience
Enrolment topped 30,000 students for the first time in fall 2010 at 30,476 students—up 11 percent compared to three years earlier.
Forty new and continuing projects were approved to enhance the quality of the student experience. Funded through a unique partnership with the University of Calgary called Quality Money, the Student Legislative Council approved fifteen projects valued at $1.6 million,
12
Investing in new Canadians
Celebrating university educators
A $1 million gift from RBC will help the Haskayne School of Business study how organizations can take full advantage of the professional credentials earned by new Canadians outside of Canada.
Sixty faculty members and graduate students gathered to receive certificates that recognize completion of the University Teaching Certificate, Teaching in Canadian Classrooms and Course Design programs.
Olympic Oval future secured
Innovative support services
The ‘world’s fastest ice’ is officially back in business for the long haul as Olympic Oval directors and WinSport Canada confirmed plans to secure the future of the Olympic Oval for the next 20 years.
Improving financial controls, streamlining administrative services, and reducing costs are central to the success of this multi-year strategic project headed into its fifth and final phase which will focus on the integrated service delivery model and changes to PeopleSoft.
Honouring Canada’s past, celebrating the future
University of Calgary releases Climate Action Plan
General Rick Hillier, former Chief of the Defence Staff, received an honorary degree during fall convocation ceremonies in recognition of the brave men and women who serve Canada.
Calgary became the first university in Alberta and only the second university in Canada to release a Climate Action Plan for reducing greenhouse gas (GHG) emissions.
“Wall of stone” protects residence students
Quarter 4 (January to March)
Yamnuska—the newest student residence building—was named for a mountain adjacent to the traditional land of the Stoney people.
Project Next The community was invited to participate in Project Next, an initiative that will culminate in the development of a strategy to guide the university through to its 50th anniversary in 2016.
Chancellor’s Installation Jim Dinning was officially installed as the University of Calgary’s 12th Chancellor during the Fall Convocation ceremony.
New institute examines pollutants from water and land
University of Calgary secures nearly $10 million through Canada Research Chairs
A new Institute of Environmental Toxicology will bring together engineers and biologists to develop new and improved technologies for effective risk assessment and remediation of contaminated sites.
Ten University of Calgary faculty members were awarded a total of $9.5 million for either securing their Canada Research Chairs (CRC) or having their CRCs renewed.
Business undergrads #1 again
Jack Perraton retires as Board of Governors chair
For the 33rd consecutive year, Haskayne Bachelor of Commerce students finished in the top two overall in the Inter-Collegiate Business Competition, finishing in a first place tie in the 2010 season.
After over 12 years of service to the University of Calgary, Jack Perraton announced his retirement from his position as chair and member of the Board of Governors.
Taking aim at the public policy deficit
Faculty of Arts engages community in discussions about its future
The University of Calgary’s newest Master of Public Policy program was unveiled at the Downtown Campus.
Themes figuring prominently in strategic planning forums held by the newly amalgamated Faculty of Arts were
13
New SUPER Work program launched
undergraduate program quality, excellence in graduate programs, research support, and administrative efficiency.
Funded through a unique partnership with the Board of Governors, the Students’ Union Program for Education Related Work (SUPER Work) will support students in their quest for summer work related to their academic programs and career aspirations.
Students checking out the Taylor Family Digital Library (TFDL) The TFDL opened its doors to students and faculty who can now explore and enjoy information online with the click of an icon, sketch their friends, or digitally leaf through stunning images from the TFDL’s special collections using touch technology.
New Board of Governors chair appointed Douglas J. Black, Q.C. was appointed as the new chair of the Board of Governors through an Order-In-Council by the Government of Alberta. Black is vice chair and senior counsel of Fraser Milner Casgrain LLP and a prominent community leader.
Titanic: The Musical opens The University of Calgary Operetta Company broke new ground with its unique take on one of the 20th century’s most iconic disasters—the sinking of the RMS Titanic.
3M National Teaching Fellowship Leslie Reid is one of this year’s 10 fellowship recipients to win a 3M National Teaching Fellowship. Reid is the Tamaratt Teaching Professor in Geoscience.
Nobel laureate the featured speaker for Drummond Memorial Lecture Nobel laureate Andrew Fire was the featured speaker for the 2011 Drummond Memorial Lecture. Fire was awarded the 2006 Nobel Prize for Physiology or Medicine, along with Craig C. Mello, for the discovery of RNA interference.
University of Calgary becoming more financially sustainable Limiting expenditure growth, making the university’s operations more efficient and accountable, and finding ways to increase revenue put the university on a sustainable financial path as the Board approves a $1.09 billion budget for 2011-12.
University of Calgary hosts new Canadians Chancellor Jim Dinning hosted a Canadian Citizenship ceremony where 99 new citizens from 31 counties were sworn in. Joining the celebration were Rob Anders, MP for Calgary West and Harry Chase, MLA for Calgary Varsity.
Exploring ideas for McMahon Stadium lands Innovative ideas are what the university is looking for from the community to develop the McMahon Stadium site, which is owned by the university and home to both the Dino’s football program and Calgary Stampeders.
Economics professor elected to the Royal Society of Canada One of Canada’s leading microeconomic theorists, B. Curtis Eaton was elected a Fellow of the Royal Society of Canada. Eaton’s work spans several areas, including spatial competition, urban/regional economics, industrial organization, labour economics, game theory, the economics of information and social interaction.
UC-Qatar receives prestigious Canadian accreditation The University of Calgary—Qatar was recognized for delivering excellence in nursing education by the Canadian Association of Schools of Nursing (CASN). It is the first time CASN has awarded accreditation to an institution outside of Canada.
Students experience indigenous social work
Accredited university on Chinese list
Smudges, pipe ceremonies and a sweat lodge are just part of the preparation students receive at the University of Calgary’s Edmonton-based social work faculty so that they are better prepared to work with First Nations and Métis communities.
The People’s Republic of China listed the University of Calgary as an accredited university. This is an important factor in the university’s ability to build research
14
collaborations and offer scholarly opportunities to both students and faculty.
Bringing together youth for change The Inter-American Development Bank youth conference was hosted on campus March 24. About 500 youth development specialists, government officials and students from Canada and the Latin American and Caribbean region attended to discuss the role of youth as agents of change.
Nursing faculty’s sim lab continues to expand A $300,000 Government of Alberta grant will further enhance the university’s role as a North American leader in nursing simulation education. The centre is home to state-of-the-art patient simulators in a student learning environment that can mimic home care settings and hospital wards.
New board of directors for west campus Creating a vibrant place where people can live, work, learn, and play on campus is on its way to becoming reality as the Board of Governors considers a request to establish the West Campus Development Corporation.
Top fundraising university For the third year in a row the University of Calgary exceeded its fundraising target and finished the year at $76.5 million, maintaining its status as one of the top fundraising universities in the country
15
EXCELLENCE INNOVATION SUCCESS
GOALS, EXPECTED OUTCOMES AND PERFORMANCE MEASURES Goal 1: Student Success
Expected Outcomes and Performance Measures
Our fundamental role is to educate students to appreciate the complexities of the natural and human worlds in which they live, and to prepare them to engage actively, thoughtfully and productively both in their careers and as citizens of their communities. Recruiting excellent students and providing them with fulfilling educational experiences are keys to our mission and success.
Monitoring our performance against national and international measures of success and excellence ensures that we remain focused on desirable outcomes.
Goal 2: Excellence in Research, Scholarship and Creative Activity
y Our students will encounter high-quality learning experiences. They will report that they are highly satisfied with the quality of their learning experiences and the associated development of their critical thinking and research skills. Our graduates will be leaders in interdisciplinary research, inquiry and service.
Central to our purpose and passion is the pursuit of knowledge. We contribute to society by exploring the frontiers of knowledge through basic and applied investigations that help us to discover new ways to interpret the world and respond to its needs. We are committed to innovative research, scholarship and creative activity in all of their forms.
y The University will be internationally recognized as a top Canadian research university through its achievements in strategic academic priority areas. Our focus on discovery, integration, application and teaching—the basis of engaged scholarship—will encourage faculty to collaborate, inquire, investigate, challenge and apply knowledge, often across disciplinary lines.
Goal 3: Interdisciplinary Education and Research
y We will draw upon our disciplinary strengths as we explore and discover knowledge and identify societal problems that require innovative interdisciplinary approaches for their resolution.
The success of our exploration and discovery increasingly relies on collaborative teams that work across disciplines, departments and even time zones. In today’s complex environment, scholarly excellence is most often is the result of purposeful partnerships that help us to achieve our central mission.
y The outstanding and sustained service involvement and advocacy of our faculty, staff, and students will increasingly benefit the community. Our community is productively engaged in our activities, priorities and focus to ensure that our graduates and the knowledge we generate address societal needs.
Goal 4: Return to Community Engagement with our community is central to our mission and vital to our success. Our efforts this past year deepened our engagement with the community through the relevance of our scholarship and the connections we made locally and around the world.
17
2008 – 2009
2009 – 2010
2010 – 2011
Target
Average Entering Grade (%)
82.8
82.0
81.8
83.0
Undergraduate Retention Rate (%)
83.9
85.7
85.0
83.9
Graduate Satisfaction (%)
84.7
84.7
85.4
88
72/71
75/65
75/65
75/65
85.2
85.2
81.5
87
Undergraduate (Six-year tracking)
61.4
61.6
66.0
66
Master (Five-year tracking)
70.2
74.4
71.5
85
PhD (Nine-year tracking)
71.9
72.5
79.2
72
Undergraduate (Six-year tracking)
14.8
14.6
14.2
13.8
Master (Five-year tracking)
8.1
8.2
7.6
8
PhD (Nine-year tracking)
14.1
15.0
13.6
14
85
77
81
79
Graduate Employment Rate (%)
97.6
97.6
95.0
97
Administration Expenditures (%)
5.0
4.5
4.4
4.4
Fundraising ($M)
82.9
71.5
79.1
75
Endowment ($M)
340
442
497
381
Undergraduate Engagement (First year/senior year) (%) Graduate Student Engagement (%) Graduation Rate (%):
Time to Completion (terms):
Tri-Council Revenue ($M)
Average Entering Grade
Undergraduate Student Engagement
We promote high levels of student achievement by emphasizing the importance of academic admission standards concerning student performance.
We monitor the overall level of satisfaction reported by senior level undergraduate students through their responses to the National Survey of Student Engagement (NSSE).
Undergraduate Retention Rate
Graduate Student Engagement
Our undergraduate first-to-second year retention rate is an indicator of performance that provides a basis for understanding at what stages in degree programs students leave.
We monitor the quality of our learning environment through student responses to a Canadian Graduate and Professional Student Survey (CGPSS) question, which assesses the percentage of thesis students (Master and PhD) rating the quality of their graduate program as excellent or very good.
18
Graduate Satisfaction
Endowment Balance
We assess the quality of our learning environment through student responses to the question, “Rate the quality of your education experience�, on a government survey completed two years after graduation.
Our endowment balance provides a measure of the cumulative support we have received over the years, as well an indication of capacity to support the institution’s teaching, research and service mandate in the future.
Graduation Rate
Administration Expenditures
We monitor our graduation rate as an indicator of performance, which provides a basis for understanding how many students ultimately graduate from a starting cohort (Master five-year tracking, PhD nine-year tracking).
This measure tracks how efficiently we provide quality learning opportunities to the greatest number of students at a reasonable cost. This measure expresses administration expenses as a percentage of total expenses, less ancillary expenditures.
Time to Completion Our time-to-degree measure describes the average number of years taken to complete a first degree by students who started at the university.
Sponsored Research Income We monitor the level of sponsored research income we generate as a comparative measure of research income and intensity among Canadian universities.
Tri-Council Revenue We monitor the level of Tri-Council (NSERC, CIHR, and SSHRC) research income as a comparative measure of research income, intensity, and quality among Canadian universities.
Degrees Awarded This measure assesses our responsiveness to societal needs through the number of students who graduate annually.
Fundraising This measure tracks the extent to which we engage the community in our research, scholarship and creative activity through the level of funds we raise to support these activities.
19
EXCELLENCE INNOVATION SUCCESS
A SHARED RESPONSIBILITY Excellence, Innovation and Success The road to excellence, innovation and success was paved by members of our community—faculty, staff, students, alumni, government, and industry—whose unwavering determination and commitment enhanced our profile as a great university in a world class city. We are a better organization today a result of their inspiration, dedication and support. As we turn our attention toward our 50th anniversary in 2016, we invite our community to share in our vision of a new tomorrow—one that invites us all to lift up our eyes to a future where the University of Calgary proudly stands among the best in the world.
21
MANAGEMENT DISCUSSION AND ANALYSIS This management discussion and analysis (MD&A) should be read in conjunction with the University of Calgary annual audited financial statements and accompanying notes. The MD&A and audited financial statements are reviewed and approved by the University of Calgary Board of Governors on the recommendation of the University of Calgary Audit Committee. The university financial statements have been prepared in accordance with Canadian generally accepted accounting principles and are expressed in Canadian dollars. The university has reported a $69.8 million excess of revenue over expense for the year ended March 31, 2011. This compares to a $48 million excess of revenue over expense for the year ended March 31, 2010. The year-end net asset position is $835.2 million as compared to last year’s $710 million. Total revenue increased by $31.7 million (3.1%) over fiscal 2010 to $1,065.8 million while total expenditures increased by $9.8 million (1.0%) to $995.9 million. The predominant changes in revenue include increases of $13.6 million in tuition, $11.3 million in grants and donations and $7.8 million in amortization of deferred capital contributions. The main increases in expense categories include increases in materials, supplies and services of $13.4 million, $8.8 million in amortization of capital assets and $5.3 million in scholarships and bursaries. These increases are offset by a decrease in salaries and benefits of $18.9 million. This MD&A provides an overview of the results the University of Calgary achieved in 2011 with a detailed discussion and analysis of the university’s: 1. Operating Environment 2. Business Planning and Management 3. Financial/Budget information 4. Areas of Significant Financial Risk 5. Progress in Capital Projects
1. Operating Environment The University of Calgary operates in an environment characterized by political, economic, social, technological, and environmental change. Increasing competition, population growth, economic uncertainty, challenges related to student recruitment, retention and engagement, affordable student housing, the gap between revenue and expenditure growth, and calls for greater public accountability, among other factors offered opportunities and presented challenges. The recession was just one of a number of factors contributing to increased student demand as more people moved from the workforce to post-secondary education. Meeting this demand, particularly in areas of strategic priority, was challenging for the university since much of the funding for planned program expansions across the Campus Alberta system was cancelled to meet provincial budget targets. Changes to the provincial research and innovation landscape introduced by Alberta Advanced Education and Technology in 2009-10 continued to work their way through the system in 2010-11, making it less complex, more
22
focused on government’s priorities, with less overlap and providing stronger links between the players. Despite considerable public sector debt, the demand for university research remained strong as governments turned to innovation as a driver of social and economic development. The global financial crisis had a profound and lasting effect on all aspects of the Alberta post-secondary system. Numerous provincial grants were frozen or reduced. Planned program expansions were cancelled, and new capital projects were deferred. Fortunately, the university was better positioned than many other institutions in its sector to buffer the financial downturn. It continued to benefit from a favourable student to faculty ratio, and a broad range of desirable programs. In anticipation of the challenges ahead, budgets were reduced by three percent in 2010-11. The Innovative Support Services (iS2) project reduced ongoing administrative costs. Senior administrative salaries were frozen in 2010-11. Annual tuition fee increases were approved by the Minister of Advanced Education and Technology for the Bachelor of Commerce and MBA program to correct market anomalies. A new student services fee was phased in over three years to direct more of the operating budget into core academic operations. Additionally, collective agreements were settled at rates lower than in previous years. Despite these challenges, the university leveraged its strengths to attend to its priorities, enhance its resources, and improve the service it provided to students and the community.
2. Business Planning And Management The university’s three-year business plan lays out the framework and resources for the institution to achieve its teaching, research, interdisciplinary, and service goals and objectives. Within this plan, the university describes its operating environment as well as the strategies it will engage in to further enhance its quality, reputation, profile and distinctive character. Performance measures monitor plan progress. As the university refines its plans, these measures are updated to ensure they continue to assess performance against desirable outcomes. Together, this plan and the annual report form part of an accountability relationship with many stakeholders including students, faculty and staff, the Board of Governors, the business community, various public communities, other post-secondary institutions, and the provincial and federal governments.
3. Financial / Budget Information Revenues Total revenues have increased by $31.7 million (3.1 percent) to $1,065.8 million from the $1,034.1 million recorded in 2010. The following table shows the composition of the university’s total revenues for the 2011 fiscal year with comparative information for 2010 and 2009:
23
Budget – unaudited
Revenue by Source Government grants
$
Sales of services and products
625,347
2011 $
618,126
2010 $
614,404
2009 $
564,370
93,910
93,371
94,967
90,949
179,198
183,253
169,720
157,166
Donations and other grants
70,314
79,075
71,456
82,929
Investment income
26,477
32,078
31,510
7,036
56,124
59,859
52,073
51,751
Student tuition and fees
Amortization of deferred capital contributions Total Revenue
$
1,051,370
$
1,065,762
$
1,034,130
$
954,201
Government Grants The university’s single largest source of revenue is government grants which increased by $3.7 million (0.6 percent) from $614.4 million in 2010 to $618.1 million in 2011. Grants received during the year from Alberta Advanced Education and Technology decreased by $100.6 million (14.5 percent) from $693.4 million in 2010 to $592.8 million in 2011. Of this amount, $97.9 million (2010 $193.7 million) relates to capital grants. The decrease in capital grants from 2010 to 2011 is due to the near completion of the major capital expansion program funded by Alberta Advanced Education and Technology. These capital grant amounts are deferred and recognized into revenue as “amortization of deferred capital contributions” over the life of the associated capital assets, which is why the reduction in capital grants is not reflected in grant revenues on the statement of operations. Operating grants decreased by $2.6 million (one percent) over the prior year. In 2010, grants consisted of the base operating grant combined with supplemental funding, most notably the Enrolment Planning Envelope grant. This year, Alberta Advanced Education and Technology grants were combined, eliminated or modified into what is now referred to as the Campus Alberta grant, resulting in a net decrease in the overall grant. Grants from the Government of Alberta represent 80.8 percent of the total government grant revenue received by the university (2010 - 81.3 percent) and 46.9 percent of total revenues for the university in 2011 (2010 - 48.3 percent).
Tuition Fees Tuition fees totaled $183.3 million (2010 - $169.7 million) and consisted of $166 million (2010 - $154 million) in credit tuition fees and $17.3 million (2010 - $15.7 million) in non-credit tuition fees. Total credit tuition revenue increased by $12.0 million (7.8 percent) from $154 million in 2010 to $166 million in 2011. Of this increase, $4.5 million represents enrolment growth and $1.9 million relates to the Government of Alberta Tuition Policy which allowed for a 1.5 percent increase (2010 - 4.1 percent). The newly implemented student services fee resulted in an additional general tuition of $3.8 million along with visa and program differential revenue and other tuition revenue of $1.8 million, which accounted for the remaining $5.6 million revenue growth.
24
Non-credit tuition increased by $1.6 million (10.2 percent) from $15.7 million in 2010 to $17.3 million in 2011. The increase is mainly due to stronger enrolment in 2011 in English as a Second Language (ESL) classes and the expansion of the customized executive development programs. In 2010, the revenue was lower due to the weakened economic environment which led to a reduction in registrations in leisure programs and the threat of a flu epidemic which led to cancellations of ESL and other international group program registrations.
Research Cash research contributions during the year increased by $3.6 million from $272.1 million in 2010 to $275.7 million in 2011. Research grants and revenues are recognized in the period in which related expenditures are incurred. There is a significant deferral of unspent research revenues at the balance sheet date. The financial statements reflect recognized research revenue of $258.1 million in 2011 (2010 - $260.6 million) which match research expenditures incurred in those periods. Research revenue is derived from a number of sources and as such is reported within multiple lines of the statement of operations.
Investment Income The university’s investment income increased by $0.6 million (1.9 percent) to $32.1 million from the $31.5 million reported in 2010. The $32.1 million in investment income is comprised of the following: Investment Income ($000) Income on investments held for endowments
48,989
Income on other investments
16,196
Recovery on Floating Rate Notes (ABCP)
4,051
Gain from subsidiaries & joint venture
338 69,574
Less: Income capitalized to endowment
(31,428)
Amounts deferred
(6,068)
Net investment income
32,078
The increase in total investment income earned is the result of an increase in equity valuations (primarily domestic equity). Equity investments represent a substantial component of the university’s long-term investment portfolio. Fixed income and money market investment returns also experienced a slight increase during the year. The investment gain relating to externally restricted endowments, net of endowment spending and fees, was transferred to cumulative capitalized endowment earnings. In addition, the value of the university’s investment in Floating Rate Notes (formerly Asset Backed Commercial Paper) increased during the fiscal year, resulting in a recovery of $4.1 million. For the year ended March 31, 2011 the return on the university’s endowment funds was 11.8 percent (2010 - 23.8 percent) and on non-endowed funds was 2.6 percent (2010 - 2.4 percent).
25
Expenses Total expenditures increased by $9.8 million (one percent) from $986.1 million in 2010 to $995.9 million in 2011. The following table shows the composition of the university’s total expenses for the 2011 fiscal year with comparative information for 2010 and 2009: Budget – unaudited
Expense by Category Salaries
$
Benefits
496,535
2011 $
496,491
2010 $
502,482
2009 $
479,030
96,801
89,056
101,957
87,596
267,880
195,478
182,095
180,727
Utilities
33,352
31,144
28,214
32,039
Maintenance and repairs
12,047
13,734
14,160
14,054
Scholarships and bursaries
62,941
66,371
61,061
55,572
Cost of goods sold
18,353
14,174
15,471
15,833
Amortization of capital assets
84,533
89,474
80,681
80,668
Materials, supplies and services
Total Expenses
$
1,072,442
$
995,922
$
986,121
$
945,519
Salaries and Benefits At 58.8 percent of total expenditures (2010 - 61.3 percent) salaries and benefits represent the single largest operating expenditure. Salaries expense decreased in 2011 by $6 million or 1.2 percent over 2010 primarily due to staff reductions and a decrease in severance payments. The average overall headcount decreased by 353 compared to 2010, primarily due to a decrease of 265 in term appointments and hourly employees, which had a minimal impact to salaries. The major cost reduction resulted from an average headcount decrease of 53 within the support staff group. Severance payments decreased by $1.9 million compared to fiscal 2010 when the University made significant staff reductions in senior administrative, regular continuing academic, support staff and management and professional categories. The FTE figures provided as at March 31, 2011 are not necessarily indicative of staffing levels throughout the year as they are at a point in time. As such, both headcount and year-end FTE figures are provided. Within the Post Secondary Sector, Universities use full time equivalent (FTE), a common metric, when referring to staffing complement. FTE staffing numbers for specific employee groups as at March 31, 2011 with comparative numbers for March 31, 2010 are provided in the table below:
26
Full Time Equivalent
March 31, 2011
March 31, 2010
Net Change
1,752
1,798
(46)
48
51
(3)
725
698
27
Support Staff
2,175
2,165
10
Total Workforce
4,700
4,712
(12)
Regular Continuing Academic Senior Administration Management & Professional
A portion of salary costs was recovered from external sources. Expenditures on benefits decreased by $12.9 million (12.6 percent) over the prior year. The cost of benefits as a percentage of salary is 17.9 percent in 2011 compared to 20.3 percent in 2010. Of this decrease, $16 million (2010 - $12 million) is due to the decrease in the actuarially determined UAPP pension expense. The remainder of the variance in benefits expense is primarily due to a one-time adjustment of $2.1 million to accrued vacation balances recorded in 2010 relating to former trust employees who became university employees, net of an increase in pension plan contributions of $6.1 million.
Utilities Utilities expense increased by $2.9 million (10.3 percent) over 2010 primarily as a result of increase in the average natural gas rates experienced in 2011, and an increase in usage due to completion and usage of new buildings which opened on campus during the year. A significant portion of gas costs incurred during 2010 were at a low floating rate, prior to the university’s decision to move to improve predictability of utilities expenses through the commencement of a hedging program.
Scholarships and Bursaries Scholarship expense increased by $5.3 million (8.7 percent) over 2010. Higher enrolment numbers in 2011 contributed to the increase in scholarship spending as more students became eligible for support. Increased scholarship expense came from a number of faculties including the Faculty of Science and the Schulich School of Engineering.
Budget To Actual The 2011 excess of revenue over expense of $69.8 is $90.9 million greater than the budgeted deficiency of revenue over expense of $21.1 million. This variance is a reflection of cumulative favorable overall variances for both revenue and expenditures. Actual revenue is $14.4 million over budget due to higher than anticipated donations and other grants in the amount of $8.8 million, higher than expected investment returns in the amount of $5.6 million, and higher than expected tuition revenues in the amount of $4 million, partially offset by some unfavourable variances from Government of Alberta grants. Actual expenses are $76.5 million below budget primarily due to lower than budgeted materials and supplies expenses of $72.4 million. The materials and supplies budget variance is the result of expenditure restraint at the university combined with lower than anticipated use of contingency amounts budgeted for within this line item.
27
Financial Position Net Assets The university’s net asset balance is $835.2 million at March 31, 2011. This is an increase of $125.2 million (0 percent to 15 percent) over 2010 ($710.0 million). The net asset balance is reported in the following four major categories:
Net Assets - Endowments Net assets restricted for endowment purposes increased by $55.1 million or 12.5 percent to $496.8 million from $441.7 million in 2010. The increase is the result of net investment gains of $49 million and $23.7 million in new contributions less $17.6 million in endowment expenditures.
Net Assets - Investment in capital assets and collections Net assets invested in capital assets and collections of $193.4 million decreased by $1.1 million from 2010 ($194.5 million). The decrease was the result of amortization expense relating to internally funded capital assets of $29.9 million largely offset by internally funded net capital purchases and long-term debt repayments relating to capital assets of $28.8 million. Growth in the capital asset and collections balance is discussed in Section 5, Progress in Capital Projects.
Net Assets - Internally restricted Internally restricted net assets represent amounts set aside by the university for specific purposes. The balance increased by $24 million from $84.5 million in 2010 to $108.5 million in 2011. The increase in this balance is primarily due to an internal restriction to allow for management of departmental budget surpluses carried over from 2011, with offsetting reductions relating to spending of amounts that were internally restricted for in previous years. The composition of internally restricted net assets is as follows: $ (000’s) Funding reserved for Capital activities
2,400
Funding reserved for Operating activities
88,544
Funding reserved for Research activities (includes research activities and for subsidiaries – University Technologies Group and Arctic Institute of North America)
17,545
Total
$108,489
Net Assets - Unrestricted The university’s unrestricted net assets balance at year-end has recovered significantly to a surplus of $36.5 million (2010 - $10.6 million deficit). This improvement of $47.1 million is primarily due to the $69.8 million excess of revenue over expenditures.
Investments The cash and cash equivalents balance decreased by $41.1 million to $535 million compared to $576.1 million at March 31, 2010. This decrease is a result of cash of $356.3 million used in investing activities, offset by cash inflows of $43.5 million and $271.7 million respectively from operating and financing activities.
28
Total investments increased by $133.4 million (20.9 percent) from the $639.6 million recorded in 2010 to $773 million in 2011. Long-term investments increased by $68.5 million and current investments increased by $64.9 million. The increase in long-term investments is primarily due to an increase in the market value of the portfolio in the amount of $40.2 million and net purchases in the amount of $28.3 million. The increase in short-term investments is primarily due to increases in unspent research and other restricted balances that have been invested.
4. AREAS OF SIGNIFICANT FINANCIAL RISK Unfunded Pension Liability The university participates with other employers in the Universities Academic Pension Plan (UAPP) to provide pensions for certain staff members. The actuarial deficiency reported by the UAPP as at December 31, 2010 related to all participants is $1,123 million (2009 - $971 million) consisting of a pre-1992 deficiency ($754 million) and a post 1991-deficiency ($369 million). Based on an extrapolation of the UAPP’s financial position to March 31, 2011, the university’s portion of this deficiency, which has been allocated based on its plan members’ percentage of pensionable earnings is estimated to be $119.8 million (2010 - $116.4 million). The university has recorded an accrued benefit liability of $61.9 million (2010 - $58.3 million) and deferred $57.9 million (2010 - $58.1 million) of unamortized experience losses as prescribed by GAAP for employee future benefits. The unfunded deficiency for service prior to January 1, 1992 is financed by additional contributions of 1.25 percent (2010 - 1.25 percent) of salaries by the Government of Alberta. Employees and employers equally share the balance of the contributions of 2.03 percent (2010 - 2.03 percent) of salaries required to eliminate the unfunded deficiency by December 31, 2043. The university is also a participant in the Public Sector Pension Plan (PSPP) for certain other employees. Participants, including the university, are unable to isolate their share of the PSPP pension due to the number of participating employers in the PSPP and the resultant complexities in calculating accurate information related to the participants’ share of any unfunded liability. There is a significant likelihood that both employer and employee contribution rates will increase in the near future for PSPP plans. For multi-employer defined-benefit plans where there is measurement uncertainty with respect to each plan participant, the CICA Handbook guidance allows for following the standards on defined-contribution plans. Therefore, the university has chosen to continue to account for the PSPP on a defined-contribution basis.
Deferred Maintenance The current deferred maintenance balance for buildings is estimated at $304.5 million (2010 -$298.7 million) based on March 31, 2011 information from Alberta Infrastructure. This balance represents the expected future life cycle costs associated with university buildings over the next five years based on periodic audits conducted by Alberta Infrastructure. Deferred maintenance is retired through infrastructure maintenance grants, special preservation grants and as part of the ongoing capital program within the existing building inventory. Total provincially-funded expenditures on maintenance events over the 12 months ended March 31, 2011 was $33.2 million (2010 - $21.1 million). Of this amount, $15.2 million (2010 - $6.9 million) was funded from special preservation grants. A portion of these amounts were treated as capital improvements and are further discussed under “Progress in Capital Projects” (below). The Facility Condition Index (FCI) is an industry standard for measuring building condition against the total replacement
29
value of the university’s buildings. The university’s current FCI of 10.6 percent is within an acceptable range (0 to 15 percent) and would indicate a well managed maintenance program.
Budgetary Pressure The university’s future finances are under pressure as a result of a number of factors including: y the expectation that there will be no increases, and a possibility of reductions, in operating grant funding in the foreseeable future; y reduction in, or loss of, external funding sources; y potential for significant unexpected repairs on aging facilities; y likely increase in contribution rates for pension plans; y maintaining enrolment associated tuition revenue as economy recovers; y potential for negotiated salaries and other inflationary pressures in excess of funding; y a tuition policy that limits tuition to rates below inflation rates; and, y potential for volatility with regards to investment returns The university continues to be committed to address these budgetary pressures and will work closely with the Board of Governors and the government to develop long-term strategies to ensure that it can continue to deliver on its mandate.
5. PROGRESS IN CAPITAL PROJECTS In 2011 the university expended $271.6 million (2010 - $274.1 million) on buildings and plant, and a total of $80.6 million (2010 - $47 million) on equipment & furnishings, books, software and artwork. These additions were funded as follows: $28.8 million from internal university funds, $38.3 million from debt financing and $285.1 million from other external sources. Significant investment in capital projects from external funds includes: Energy, Environment & Experiential Learning ($76.9 million), Taylor Family Digital Library and High Density Library ($48.2 million), Phase VI New Residence ($25.8 million – debt funded), Foothills Campus including Health Research Innovation Centre fit out costs, Health Science Centre Critical Renovations, and Undergraduate Medical Expansion ($35.4 million), Phase I Expansion of Schulich School of Engineering ($20.6 million), Central Heating and Cooling Plant / Energy Centre ($25 million), and Phase II of Energy Performance Projects ($10.9 million).
30
EXCELLENCE INNOVATION SUCCESS
Financial Statements
For the Year Ended March 31, 2011
32
TABLE OF CONTENTS
Statement of Management Responsibility .................................................................................................................2 Auditor’s Report ........................................................................................................................................................3 Statement of Financial Position .................................................................................................................................4 Statement of Operations ...........................................................................................................................................5 Statement of Changes in Net Assets ..........................................................................................................................6 Statement of Cash Flows ...........................................................................................................................................7 Notes to the Financial Statements .............................................................................................................................8
33
STATEMENT OF MANAGEMENT RESPONSIBILITY
The University is responsible for the preparation of the financial statements and has prepared them in accordance with Canadian generally accepted accounting principles as described in note 2 to the financial statements. The financial statements present fairly the financial position of the University as at March 31, 2011 and the results of its operations and cash flows for the year then ended. In fulfilling its responsibilities and recognizing the limits inherent in all systems, the University has developed and maintains a system of internal control designed to provide reasonable assurance that University assets are safeguarded from loss and that the accounting records are a reliable basis for the preparation of the financial statements. The Board of Governors carries out its responsibility for review of the financial statements principally through its Audit Committee. The Audit Committee meets with Management and the External Auditor to discuss the results of audit examinations and financial reporting matters. The External Auditor has full access to the Audit Committee, with and without the presence of Management. The financial statements for the year ended March 31, 2011 have been reported on by the Auditor General of the Province of Alberta, the auditor appointed under The Post-secondary Learning Act. The Auditor's Report outlines the scope of his examination and provides his opinion on the fairness of presentation of the information in the financial statements.
Original signed by Elizabeth Cannon President
Original signed by Jonathan Gebert Vice-President (Finance and Services)
34
Independent Auditor’s Report
To the Board of Governors of the University of Calgary
Report on the Financial Statements I have audited the accompanying financial statements of the University of Calgary, which comprise the statement of financial position as at March 31,2011, and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of the University of Calgary as at March 31, 2011, and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.
Edmonton, Alberta June 22, 2011
Original signed by Merwan N. Saher, CA Auditor General
35
STATEMENT OF FINANCIAL POSITION AS AT MARCH 31, 2011 (thousands of dollars)
2011 ASSETS Current Cash and cash equivalents (note 3) Short-term investments (note 4)
$
Accounts receivable Inventories and prepaid expenses
Long-term investments (note 4) Other long-term assets (note 5) Capital assets and collections (note 6) LIABILITIES AND NET ASSETS Current Liabilities Accounts payable and accrued liabilities Current portion of long-term liabilities (note 8)
534,960 255,214
2010
$
576,062 190,331
46,247 21,781
63,379 19,916
858,202
849,688
517,791 22,727 1,471,315
449,242 22,604 1,209,195
$
2,870,035
$
2,530,729
$
150,910 4,917
$
166,550 3,951
Deferred contributions, research and other (note 9) Deferred revenue
Employee future benefit liabilities (note 7) Long-term liabilities (note 8) Deferred contributions, capital (note 9) Unamortized deferred capital contributions (note 10)
426,618 22,104
391,665 20,238
604,549
582,404
68,424 157,443 77,124
63,691 110,186 162,059
1,127,290
902,374
2,034,830
1,820,714
496,807 193,360 108,489 36,549
441,658 194,471 84,468 (10,582)
835,205
710,015
Net Assets Endowments (note 11) Investment in capital assets and collections (note 12) Internally restricted (note 13) Unrestricted (deficit) $
2,870,035
$
Signed on behalf of the Board of Governors:
_______________________ Chair, Board of Governors
____________________________ Vice-President (Finance & Services)
The accompanying notes are part of these financial statements. 36
2,530,729
STATEMENT OF OPERATIONS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
Budget 2011 (unaudited - note 16) REVENUE Government of Alberta grants (note 18) Federal and other government grants Sales of services and products Student tuition and fees Donations and other grants Investment income (note 17) Amortization of deferred capital contributions (note 10)
$
$
2010
$
506,927 118,420 93,910 179,198 70,314 26,477 56,124 1,051,370
499,705 118,421 93,371 183,253 79,075 32,078 59,859 $ 1,065,762
499,583 114,821 94,967 169,720 71,456 31,510 52,073 $ 1,034,130
$
496,535 96,801 267,880 33,352 12,047 62,941 18,353 84,533 1,072,442
$
496,491 89,056 195,478 31,144 13,734 66,371 14,174 89,474 995,922
$
502,482 101,957 182,095 28,214 14,160 61,061 15,471 80,681 986,121
$
(21,072)
$
69,840
$
48,009
EXPENSE Salaries Employee benefits Materials, supplies and services Utilities Maintenance and repairs Scholarships and bursaries Cost of goods sold Amortization of capital assets
(DEFICIENCY) EXCESS OF REVENUE OVER EXPENSE
2011 $
NET TRANSFER TO ENDOWMENTS (note 11)
(136)
(1,208)
NET CHANGE IN INVESTMENT IN CAPITAL ASSETS (note 12)
1,448
6,059
NET CHANGE IN INTERNALLY RESTRICTED NET ASSETS (note 13)
(24,021)
(5,844)
CHANGE IN UNRESTRICTED NET ASSETS FOR THE YEAR
47,131
47,016
(10,582)
(57,598)
UNRESTRICTED DEFICIT, Beginning of year UNRESTRICTED NET ASSETS (Deficit), End of year
$
The accompanying notes are part of these financial statements. 37
36,549
$
(10,582)
STATEMENT OF CHANGES IN NET ASSETS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
Investment in Capital Assets and Collections
Endowments NET ASSETS (deficit), March 31, 2009
$
Excess of revenue over expense
340,103
$
200,144
Internally Restricted Net Assets
Unrestricted Net Assets (deficit)
$
$
78,624
(57,598)
-
-
-
48,009
Investment income (note 17)
57,944
-
-
-
Endowment contributions (note 11)
42,403
-
-
-
1,208
-
-
(1,208)
Net change in investment in capital assets (note 12)
-
(6,059)
-
6,059
Contribution of assets not subject to amortization (note 12)
-
386
-
-
Net expenditures and transfers of internally restricted net assets
-
-
5,844
(5,844)
Net transfers
NET ASSETS (deficit), March 31, 2010
$
441,658
$
194,471
$
84,468
$
(10,582)
-
-
-
69,840
Investment income (note 17)
31,428
-
-
-
Endowment contributions (note 11)
23,585
-
-
-
136
-
-
(136)
Net change in investment in capital assets (note 12)
-
(1,448)
102
1,346
Contribution of assets not subject to amortization (note 12)
-
337
-
-
Net expenditures and transfers of internally restricted net assets
-
-
23,919
(23,919)
193,360
$ 108,489
Excess of revenue over expense
Net transfers
NET ASSETS , March 31, 2011
$
The accompanying notes are part of these financial statements. 38
496,807
$
$
36,549
STATEMENT OF CASH FLOWS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
2011 CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES Excess of revenue over expense
$
Add (deduct) non-cash items: Amortization of capital assets Amortization of deferred capital contributions In-kind contributions (capital) included in donations Change in employee future benefit liabilities Change in unrealized gain on investments Total non-cash items
69,840
2010 $
48,009
89,474 (59,859) (10,572) 4,733 (21,612) 2,164
80,681 (52,073) (7,110) 19,971 (21,060) 20,409
(28,437) 43,567
67,416 135,834
(340,685) (28,347) (123) 12,838 (356,317)
(312,534) (23,895) 3,159 8,112 (325,158)
23,585 199,841 48,222 271,648
42,403 222,877 43,463 308,743
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(41,102)
119,419
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
576,062
456,643
Net change in non-cash working capital (*)
CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES Purchase of capital assets and collections, net of proceeds from disposals Purchase of long-term investments, net of sales Net proceeds from (decrease in) other long-term assets Endowment investment earnings
CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES Endowment contributions Capital contributions Long-term liabilities - new financing, net of repayments
CASH AND CASH EQUIVALENTS, END OF YEAR (note 3)
$
(*) Net change in non-cash working capital: Increase in short-term investments Decrease (increase) in accounts receivable Increase in inventories and prepaid expenses (Decrease) increase in accounts payable and accrued liabilities Increase in deferred contributions, research and other Increase in deferred revenue
534,960
$
(64,883) 17,132 (1,865) (15,640) 34,953 1,866 $
The accompanying notes are part of these financial statements. 39
(28,437)
576,062
(70,864) (2,480) (2,359) 76,859 64,540 1,720 $
67,416
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
1.
Authority and Purpose “The Governors of the University of Calgary” is a corporation which manages and operates the University of Calgary (“the University”) under the Post-Secondary Learning Act (Alberta). All members of the Board of Governors are appointed by either the Lieutenant Governor in Council or the Minister of Advanced Education and Technology, with the exception of the Chancellor and President, who are ex officio members. Under the Post-secondary Learning Act, Campus Alberta Sector Regulation, the University is a comprehensive academic and research institution offering undergraduate and graduate degree programs as well as a full range of continuing education programs and activities. The University is a registered charity, and under section 149 of the Income Tax Act (Canada), is exempt from the payment of income tax. This tax exemption does not extend to its wholly-owned subsidiary, University Technologies International Inc.
2.
Summary of Significant Accounting Policies and Reporting Practices a)
General - GAAP and Use of Estimates
These financial statements have been prepared in accordance with Canadian generally accepted accounting principles for not for profit organizations. The measurement of certain assets and liabilities is contingent upon future events; therefore, the preparation of these financial statements requires the use of estimates, which may vary from actual results. University Management uses judgment to determine such estimates. Employee future benefit liabilities, amortization of capital assets and floating rate notes are the most significant items based on estimates. In Management’s opinion, the resulting estimates are within reasonable limits of materiality and are in accordance with the significant accounting policies summarized below. These significant accounting policies are presented to assist the reader in evaluating these financial statements and, together with the following notes, should be considered an integral part of the financial statements. b)
Investment in Subsidiaries and Joint Venture
The financial statements include the accounts of the following entities using the equity method of accounting: x the combined results of University Technologies Group o University Technologies International Inc. (UTI), o University Technologies International Limited Partnership (UTI LP), a limited partnership held in trust by the University, and o UTI LP’s wholly owned subsidiaries, x the accounts of The Arctic Institute of North America (AINA), a non-profit organization controlled by the University. UTI LP operates to facilitate the transfer of intellectual property from the University to private business. AINA operates under the authority of the Act of the Federal Parliament (9-10 George VI, Chapter 45) to initiate, encourage and support northern research and to advance the study of arctic conditions and problems. The financial statements use the equity method to record the University’s proportionate share of the following joint venture: x
Canada School of Energy and Environment (46.2% interest) – a joint venture with two other universities to promote coordination and collaboration in research and education related to the implementation of Alberta’s energy and environment strategies.
These investments are recorded as other long-term assets (Note 5).
40
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
c)
Financial Instruments
The University’s financial assets and liabilities are generally classified and measured as follows: Financial Statement Components Cash and Cash Equivalents Investments Accounts Receivable Accounts Payable and Accrued Liabilities Long-term Liabilities
Classification Held for Trading Held for Trading Loans and Receivables Other Liabilities Other Liabilities
Measurement Fair Value Fair Value Cost Cost Amortized Cost
The University’s financial instruments are recognized on their trade date and transaction costs related to all financial instruments are expensed as incurred. Valuations of publicly traded securities are based on quoted market bid prices at the close of business on the statement of financial position date. For securities where market quotes are not available, estimation techniques are used to determine fair value. Estimation techniques used include discounted cash flows, internal models that utilize observable market data or comparisons with other securities that are substantially the same. The University does not use foreign currency forward contracts or any other type of derivative financial instruments for trading or speculative purposes. As permitted for Not-for-Profit Organizations, the University has elected to not apply the standards on derivatives embedded in non-financial contracts, and the University has elected to continue to follow CICA 3861: Disclosure and Presentation. Financial statements are exposed to credit risk, interest rate risk, foreign exchange risk, market risk, commodity price risk and liquidity risk. Each of these risks is managed through the University’s collection procedures, investment guidelines, banking arrangements and other internal policies, guidelines and procedures. Market Risk The University is subject to market risk, foreign currency and interest rate risk with respect to its investment portfolio. To manage these risks, the University has established a target mix of investment types designed to achieve the optimal returns within reasonable risk tolerance. Liquidity Risk The University maintains a short-term line of credit that is designed to ensure available funds to meet current and st forecasted financial requirements as cost effectively as possible. As at March 31 , 2011 the University has committed borrowing facilities of $16,000 none of which has been drawn. Credit Risk The credit risk from accounts receivable is relatively low as the majority of balances are due from government agencies and corporate sponsors. Credit risk from tuition is managed through restricted enrolment activities for students with delinquent balances and maintaining standard collection procedures. Interest Rate Risk Interest rate risk is the risk to the University’s earnings that arise from the fluctuations in interest rates and the degree of volatility of these rates. The risk is managed by contractually setting interest rates with banking institutions. Commodity Price Risk The University is exposed to commodity price risk as a result of substantial electricity and natural gas usage required to operate the institution’s facilities. The University has entered into long-term utility contracts to manage its risk exposure from fluctuating utility prices (note 15). Foreign Exchange Risk The University has entered into a contract with the Qatari government to operate a campus in Qatar. Foreign exchange risk has been mitigated through negotiating payment of University management fees in Canadian dollars. Expenses incurred are recovered from the government of Qatar and claims are adjusted to reflect currency fluctuations, thus reducing exchange risk exposure to the University.
41
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
d)
Inventories
Inventories held for resale are valued at the lower of cost and net realizable value. Inventories held for consumption are valued at cost or net replacement cost. Cost is determined by weighted average. e)
Capital Assets and Collections
Capital assets purchased are recorded at cost. In-kind contributions are recorded at fair value when a fair value can be reasonably determined. Permanent collections are not amortized and include the portion of library assets with permanent value, museum specimens, archival materials, maps, and works of art held for education, research and public exhibition purposes. Construction in progress includes the costs directly attributable to the construction including engineering, legal fees, and interest on specific debt attributed to the construction of capital assets. Capital assets, once placed into service, are amortized on a straight-line basis over the assets’ estimated useful lives. The estimated useful lives are as follows: Buildings, utilities and site improvements Furnishings, equipment and systems Learning resources f)
20 - 40 years 3 – 10 years 10 years
Capital Lease Receivable
Substantially all of the benefits and risks of ownership of the portion of the University Research Centre Building as described in the lease agreement have been transferred to the lessee. This transaction has been accounted for as a sales type capital lease. The carrying amount of this lease is valued based on the implicit interest rate and the expected lease payments over its remaining term. The University’s net investment in the lease is presented in Other Assets (note 5). g)
Revenue Recognition
The financial statements record the following items as revenue - at the following times: x x x x x x x
Unrestricted contributions - when received or receivable, if the amount can be reasonably estimated and collection is reasonably assured. Unrestricted investment income - when earned; this includes interest, dividends and realized and unrealized gains and losses. Pledges - when collected. Revenues received for services and products - when the services or products are substantially provided and collection is reasonably assured. Tuition fees - when the instruction is delivered. Donations of materials – are recorded at fair value when a fair value can be reasonably determined and when materials would otherwise have been purchased. Restricted contributions - based on the deferral method.
Deferral method Contributions, including investment income on the contributions, which are restricted for purposes other than endowment or capital asset acquisitions, are deferred and recognized as revenue when the conditions of the contributions are met. Contributions to acquire capital assets with limited lives are first recorded as deferred contributions, capital when received, and when expended, they are transferred to unamortized deferred capital contributions and amortized to revenue over the useful lives of the related assets.
42
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
Endowment contributions are recognized as direct increases in endowment net assets. Investment earnings, under agreements with benefactors or the Post-Secondary Learning Act allocated to endowment principal, are also recognized as direct increases in endowment net assets. Endowment investment earnings that are allocated for spending are deferred and recognized as revenue when the conditions of the endowment are met. Contributions restricted for the acquisition of land and permanent collections are first recorded as deferred contributions when received, and when expended, they are recognized as direct increases in investment in capital assets and collections. h)
Foreign Currency Translation
Financial assets and liabilities recorded in foreign currencies are translated to Canadian dollars at the year-end exchange rate. Revenues and expenses are translated at average daily exchange rates. Gains or losses from these translations are included in investment income. i)
Employee Future Benefits
Pension The University participates with other employers in the Public Service Pension Plan (PSPP) and the Universities Academic Pension Plan (UAPP). These pension plans are multi-employer defined benefit pension plans that provide pensions for the University’s participating employees based on years of service and earnings. Pension expense for the UAPP is actuarially determined using the projected benefit method prorated on service and is allocated to each participant based on their respective percentage of pensionable earnings. Actuarial gains or losses on the accrued benefit obligation are amortized over the expected average remaining service life. The University does not have sufficient plan information on the PSPP to follow the standards for defined benefit accounting, and therefore follows the standards for defined contribution accounting. Accordingly, pension expense recorded for the PSPP is comprised of employer contributions to the plan that are required for its employees during the year; which are calculated based on actuarially pre-determined amounts that are expected to provide the plan’s future benefits. Supplementary retirement plans The pension expense for defined benefit supplementary retirement plans is actuarially determined using the projected benefit method prorated on service. Actuarial gains or losses on the accrued benefit obligation are amortized over the expected service lifetime for each plan participant. j)
Capital Disclosures
The University defines its capital as the amounts included in deferred contributions (note 9), endowment net assets (note 11) and unrestricted net assets. A significant portion of the University’s capital is externally restricted and the University’s unrestricted capital is funded by Alberta Advanced Education and Technology, other government funding agencies and donations. The University has investment policies (note 4), spending policies, and cash management procedures to ensure the University can meet its capital obligations. Under the Post-Secondary Learning Act, the University must receive ministerial or Lieutenant Governor in Council approval for a deficit budget, mortgage and debenture borrowing and the sale of any land, other than donated land, that is held by and being used for the purposes of the University. k)
Contributed Services
Volunteers as well as members of the staff of the University contribute an indeterminable number of hours per year to assist the institution in carrying out its mission. Such contributed services are not recognized in the financial statements.
43
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
l)
Future Accounting Changes
The Public Sector Accounting Board (PSAB) has issued a framework for financial reporting by government not-for-profit organizations. The framework includes CICA 4400: Not-For-Profit Organizations, which has been incorporated into the Public Sector Accounting (PSA) handbook as the PS 4200 series of standards. This framework will be effective for fiscal years beginning on or after January 1, 2012. Government not-for-profit organizations have been given the choice to apply either PS 4200 series of standards plus the PSA Handbook; or PSA handbook without the PS 4200 series of standards. The Government of Alberta has not yet made a decision on which option Alberta Public Post-Secondary Institutions, as government not-for-profit entities, will adopt. Therefore the University cannot determine the impact of this change on its financial statements. When the decision is made the University will identify the differences in the standards that will impact the financial statements and quantify the differences. The University will also determine whether any specific exemptions and exceptions applicable to the first time adoption of PSA standards by government not-for-profit organizations will be applicable to the University.
3.
Cash and Cash Equivalents Cash and cash equivalents, with a maximum maturity of 90 days at date of purchase are as follows:
Cash Money market funds, short-term notes and treasury bills
$
2011 (844) 535,804
$
2010 5,948 570,114
Balance, end of the year
$
534,960
$
576,062
(1)
(1) The bank overdraft is a temporary condition existing at year end and represents cheques issued by the University not yet cleared by the University’s bank. Subsequent to year end, the majority of these cheques were presented for payment and cleared by the bank.
4.
Investments The composition and fair value of investments are as follows: 2010
2011 Money market funds, short-term notes, and treasury bills
$
6,412
$
1,028
Canadian bonds
299,910
255,117
Canadian equity
180,509
150,104
Foreign equity
169,568
150,486
Floating Rate Notes (ABCP)
35,880
31,844
Other
80,726
50,994
$
773,005
$
639,573
Short-term investments
255,214
190,331
Long-term investments
517,791
449,242
Balance, end of the year
$
773,005
$
639,573
The average effective yields and the terms to maturity are as follows: x Money market funds, short-term notes, and treasury bills: 1.06% (2010 - 1.06%); term to maturity: less than one year.
44
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars) x
Canadian government and corporate bond funds: 3.50% (2010 – 3.40%) term to maturity: range from less than one year to more than 10 years.
Floating Rate Notes (formerly Asset Backed Commercial Paper - ABCP) At March 31, 2011, the University holds $57,484 (2010 - $57,608) in floating rate notes which comprise the following:
Note Type
Face Value
Synthetic Assets
$
IA Tracking Notes
Estimated fair value
46,560
$
10,924 $
Total
57,484
$
Scheduled repayment
Maturity
35,047
6 years
July 15, 2056
833
2 - 26 years
2 - 26 years
35,880
Synthetic Assets are considered investment grade, rated BBB or higher, with the exception of C notes that are rated BB for which the University holds $1.4 million in face value. In the absence of a well-functioning market for floating rate notes, the University has estimated the fair value of these investments using a discounted cash flow valuation model. The model involves assumptions regarding the difference between the expected yield, based on similarly rated securities adjusted for illiquidity and market complexity, and the appropriate market-discount attributable to such investments. The spread between the expected yield and the estimated discount rate ranges from 404 basis points for the Class A-1 notes and 504 basis points for the Class C notes. An increase in spread of 100 basis points would result in a reduction to the fair value of $2,718. IA Tracking Notes are generally unrated and therefore have been valued at the current market value provided by an independent, publicly available source. Management believes this is a fair approximation of their current market value. The eventual timing and amount of future cash flows attributable to these assets may vary significantly from Management’s current best estimates. It is possible that the ultimate fair value of these assets may vary significantly from current estimates and that the magnitude of any such difference could be material to the financial results.
5.
Other Long-term Assets
(1)
Capital lease receivable Other long-term assets (2) Investment in subsidiaries and joint ventures Current portion in Accounts Receivable Balance, end of the year
$
$
2011 14,438 2,629 5,981 (321) 22,727
$
$
2010 14,737 2,522 5,643 (298) 22,604
(1) The University and Alberta Health Services (AHS) entered into a 25-year agreement for AHS to lease space in the University Research Centre Building. This lease has been accounted for as a capital lease. The future minimum lease payments receivable, based on an implicit interest rate of 7.4% per annum, for the next five fiscal years are as follows: 2012 to 2013 - $1,384 per year; 2014 - $1,424; 2015 to 2016 - $1,453.
45
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
(2) Financial Information with respect to the University’s share of its subsidiaries and joint venture is disclosed below: University Technologies Group 2011 Assets
$
5,579
Arctic Institute of North America
2010 $
2011
4,933
$
4,078
Canada School of Energy and Environment
2010 $
2011
2,238
$
3,147
2010 $
4,557
Liabilities
1,631
1,163
2,046
365
3,147
4,557
Equity
3,948
3,770
2,032
1,873
-
-
Revenues
2,544
8,186
1,296
895
1,390
1,651
Expenses Net Income (loss) for the year Cash provided (used in) operating activities Cash provided (used in) financing activities Cash used in investing activities
2,324
2,800
1,185
1,172
1,390
1,651
220
5,386
111
(277)
-
-
905
5,098
1,181
(121)
(1,103)
(2,221)
-
(3,824)
504
15
-
-
(549)
(715)
(502)
(116)
(2,222)
-
(3,325)
$ (2,221)
Increase (decrease) in cash & cash equivalents
6.
$
356
$
559
$
1,183
$
(222)
$
Capital Assets and Collections
Cost Buildings, utilities and site improvements Furnishings, equipment and systems Learning resources Land Library permanent collections Other permanent collections Balance, end of the year
$ 1,828,053
2011 Accumulated amortization
$
634,506 178,766 14,058 4,683 8,770 $ 2,668,836
$
Net book value
Cost
567,080
$ 1,260,973
$ 1,559,993
495,689 134,752 -
138,817 44,014 14,058 4,683 8,770
565,464 171,853 14,058 4,370 8,388
1,197,521
$ 1,471,315
$ 2,324,126
2010 Accumulated amortization
$
$
Net book value
528,549
$ 1,031,444
458,279 128,103 -
107,185 43,750 14,058 4,370 8,388
1,114,931
$ 1,209,195
Included in buildings, utilities and site improvement is $412,681 (2010 - $468,942) and in furnishings, equipment and systems is $15,846 (2010 - $4,674) recorded as construction in progress, which is not amortized as the assets are not yet available for use. Acquisitions during the year included in-kind contributions (such as learning resources, equipment, software, buildings and land) in the amount of $10,572 (2010 - $7,110).
46
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
7.
Employee Future Benefit Liabilities Employee future benefit liabilities are comprised of the following:
Universities Academic Pension Plan (UAPP) Long-term Disability Supplemental Retirement Pension Plan Balance, end of the year
a)
$
$
2011 61,918 451 6,055 68,424
$
$
2010 58,321 403 4,967 63,691
Defined benefit plans accounted for on a defined benefit basis
UAPP The UAPP is a multi-employer contributory joint defined benefit pension plan for academic and professional staff members. An actuarial valuation of the UAPP was carried out as at December 31, 2008 and was then extrapolated to March 31, 2011, resulting in a UAPP deficiency of $992,933 (2010 $924,067) consisting of a pre-1992 deficiency ($700,812) and a post-1991 deficiency ($292,121). The University’s portion of the UAPP deficiency has been allocated based on its percentage of the plan’s total employer contributions for the year. The unfunded deficiency for service prior to January 1, 1992 is financed by additional contributions of 1.25% (2010 1.25%) of salaries by the Government of Alberta. Employees and employers equally share the balance of the contributions of 2.03% (2010 2.03%) of salaries required to eliminate the unfunded deficiency by December 31, 2043. The actuarial valuation shows that the present value of the Government of Alberta’s obligation for the future additional contributions was $315,424 at March 31, 2011. The unfunded deficiency for service after March 31, 1991 is financed by special payments of 5.09% (2009 4.64%) of pensionable earnings shared equally between employees and employers until December 31, 2021.
47
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
Supplementary retirement plans (SRP) The University provides non-contributory defined benefit supplementary retirement benefits to executives. An actuarial valuation of these benefits was carried out at March 31, 2011. The expenses and financial position of these defined benefit plans are as follows: 2011
UAPP Expenses Current service cost Interest cost Amortization of net actuarial losses (gains) Amortization of past service cost Curtailment Settlement gain Termination benefit Total expenses Financial Position Accrued benefit obligation: Balance, beginning of year Current service cost Interest cost Benefits paid Past service costs Actuarial gain Experience loss Settlement gain Curtailment loss Termination Benefit Balance, end of year
$
$
$
Plan assets Funded status - plan deficit Unamortized past service costs Unamortized net actuarial (gain) loss Accrued benefit liability
$
21,889 8,445
2010
Long-term (1) disability
Supplementary (1) retirement
$
$
48
322 279
UAPP $
23,189 13,087
Long-term (1) disability
Supplementary retirement
$
$
37
462 215
5,143
(170)
(3)
13,126
(105)
11
-
294 -
9 221 -
-
207 -
37 (236)
35,477
474,334 21,889 33,476 (22,126) (88) 507,485
$
$
172
1,127 48 (123) 678 (498) 1,232
$
$
479 1,307
5,353 322 279 (220) 49 230 479 6,492
$
$
49,402
499,240 23,189 34,242 (22,729) (59,608) 474,334
$
$
139
989 37 (101) 787 (585) 1,127
$
$
489
6,281 462 215 (156) 121 (1,300) (270) 5,353
387,648 (119,837)
(1,232)
(6,492)
357,893 (116,441)
(1,127)
(5,353)
-
2,373
75
-
1,988
84
57,919
(1,592)
362
58,120
(1,264)
302
(61,918)
$
(451)
$
(6,055)
$
(58,321)
(1) The University plans to use its working capital to finance these future obligations.
48
$
(403)
$
(4,967)
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
The significant actuarial assumptions used to measure the accrued benefit obligation are as follows: 2010
2011
Accrued benefit obligation: Discount rate Long-term average compensation increase Benefit cost:
Discount rate Long-term average compensation increase
UAPP
Long-term disability
Supplementary retirement
UAPP
Long-term disability
Supplementary retirement
6.50%
4.50%
5.00%
6.90%
4.50%
5.00%
3.50%
n/a
4.00%
3.50%
n/a
4.00%
6.90%
4.50%
5.00%
6.70%
4.00%
3.2% first ten years, 5.3% thereafter
3.50%
n/a
4.00%
3.00%
n/a
4.00%
0.93% first ten years, 1.75% thereafter
Alberta inflation (long(2) term) (year 1, thereafter; years 1-2, thereafter)
2.25%
n/a
2.50%
2.25%
n/a
Estimated average remaining service life
11.3 yrs
7.88 yrs
(1)
11.3 yrs
9 yrs
(1) (2)
(1)
SRP actuarial gains and losses and past service costs are amortized over the remaining contract terms of the participants. SRP lump-sum payments upon retirement are based on assumptions, including inflation, which are prescribed each month by the Canadian Institute of Actuaries, and as such, those assumptions are not set by the University.
(b) Defined benefit plans accounted for on a defined contribution basis PSPP The Public Service Pension Plan (PSPP) is a multi-employer contributory defined benefit pension plan for support staff members. As the University does not have sufficient information to follow the accounting standards for defined benefit plans, it is accounted for on a defined contribution basis. The pension expense recorded in these financial statements is $14,371 (2010 $11,578). An actuarial valuation of the PSPP was carried out as at December 31, 2008 and was then extrapolated to December 31, 2010. At December 31, 2010, the PSPP reported an actuarial deficiency of $2,067,151 (2009 $1,729,196).
49
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
8.
Long-term Liabilities
Collateral Debentures payable to Alberta Capital Finance Authority*: Debenture for Cascade Hall Debenture for Human Performance Lab Debenture for Health Renovation Innovation Centre/Parkade Debenture for Child Development Centre/Parkade Debenture for International Residence House Debenture for International Residence House Debenture for Residence Renewal Program
Maturity date
Interest rate %
Amount outstanding 2010 2011
1 1
May 2025 March 2011
6.250% 4.349%
$ 12,628 -
$ 13,129 892
1
April 2031
4.935%
5,337
5,485
1 1 1 1
June 2032 September 2032 June 2039 September 2026
5.249% 4.689% 5.100% 4.429%
1,804 24,339 28,956 11,900
1,848 24,984 29,400 5,700
1 2
March 2040 March 2031
4.734% 4.269%
60,000 15,000
30,000 -
1
March 2016
5.125%
526
616
1
May 2012
0.00%
Obligations under capital leases
642 161,132 1,228
1,192 113,246 891
Less current portion
162,360 (4,917)
114,137 (3,951)
$ 157,443
$ 110,186
Debenture for Phase VI Residence Debenture for Downtown Campus Mortgages payable to Canada Mortgage and Housing Corporation: Mortgage for Dining Centre, Kananaskis and Rundle Halls Bank loans payable: Mortgage for University Research Centre
Balance, end of the year (1) title to land, building; (2) none * Alberta Capital Finance Authority is a related party
The principal portion of long-term debt repayments required over the next five years is as follows: 2012 - $4,364; 2013 – $4,460; 2014 - $4,584; 2015 - $4,810; 2016 - $5,047 and thereafter - $137,867. Interest incurred on long-term obligations was $6,237 (2010 $3,635), of which $2,016 (2010 $979) was capitalized.
50
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
9.
Deferred Contributions Deferred contributions represent unspent externally restricted grants and donations. contributions balances are as follows:
Changes in the deferred
2011
Balance, beginning of the year Grants and donations received Investment income Recognized as revenue Transferred to unamortized deferred capital contributions (note 10) Transferred to investment in capital assets, not subject to amortization Balance, end of the year
Capital $ 162,059 108,956 6,084 (1,537) (198,101) (337) $ 77,124
2010
Research and other $ 391,665 365,913 18,909 (263,195) (86,674) $ 426,618
Capital $ 185,458 186,521 (188) (209,346) (386) $ 162,059
Research and other $ 327,125 355,308 (253,411) (37,357) $ 391,665
10. Unamortized Deferred Capital Contributions Unamortized deferred capital contributions represent the unamortized grants and donations received to fund capital acquisitions. The amortization of unamortized deferred capital contributions is recorded as revenue in the statement of operations. The changes in the unamortized deferred capital contributions balance are as follows:
Balance, beginning of the year Additions from deferred contributions, research and other (note 9) Additions from deferred contributions, capital (note 9) Amortization to revenue Balance, end of the year
$
$
2011 902,374 86,674 198,101 (59,859) 1,127,290
$
$
2010 708,170 36,931 209,346 (52,073) 902,374
11. Endowments Endowments consist of externally restricted donations received by the University and internal allocations by the University’s Board of Governors, the principal of which is required to be maintained intact in perpetuity. Investment income earned on endowments must be used in accordance with the various purposes established by the donors or the Board of Governors. Benefactors as well as University policy stipulate that the economic value of the endowments must be protected by limiting the amount of income that may be expended and reinvesting unexpended income. Under the Post-secondary Learning Act, the University has the authority to alter the terms and conditions of endowments to enable: x income earned by the endowment to be withheld from distribution to avoid fluctuations in the amounts distributed and generally to regulate the distribution of income earned by the endowment. x encroachment on the capital of the endowment to avoid fluctuations in the amounts distributed and generally to regulate the distribution of income earned by the endowment if, in the opinion of the Board of Governors, the encroachment benefits the University and does not impair the long-term value of the fund.
51
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
In any year, if the investment income earned on endowments is insufficient to fund the spending allocation, the spending allocation is funded from the cumulative capitalized income. However, for individual endowment funds without sufficient cumulative capitalized income, endowment principal is used in that year. This amount is expected to be recovered by future investment income. The composition of endowments is as follows:
Balance, beginning of year Endowment contributions Transfer to endowments Transfer from endowments Investment gain Balance, end of the year Cumulative contributions Cumulative capitalized income Balance, end of the year
$
$ $ $
2011 441,658 23,585 136 (17,561) 48,989 496,807 364,100 132,707 496,807
$
$ $ $
2010 340,103 42,403 1,208 (18,075) 76,019 441,658 340,515 101,143 441,658
12. Investment in Capital Assets and Collections Net assets invested in capital assets and collections represent the net book value of capital assets and collections less unamortized deferred capital contributions and any related debt.
Capital assets and collections at net book value (note 6) Less amounts financed by: Unamortized deferred capital contributions (note 10) Long-term liabilities related to capital expenditures Balance, end of the year
The changes during the year are as follows: Investment in capital assets and collections, beginning of year
2011 $ 1,471,315
2010 $ 1,209,195
(1,127,290) (150,665) $ 193,360
(902,374) (112,350) $ 194,471
2011
2010
$
Acquisition of capital assets and collections Long-term liabilities - repayment Long-term liabilities - new financing Amortization of investment in capital assets Net change in investment in capital assets Contributions of assets not subject to amortization Decrease for the year Balance, end of the year
$
52
194,471
$
200,144
66,793 8,874 (47,189) (29,926) (1,448)
73,367 4,830 (55,648) (28,608) (6,059)
337 (1,111)
386 (5,673)
193,360
$
194,471
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
13. Internally Restricted Net Assets Internally restricted net assets represent amounts set aside by the University’s Board of Governors for specific purposes. Those amounts are not available for other purposes without the approval of the Board and do not have interest allocated to them. Internally restricted net assets are summarized as follows:
Appropriation for capital activities: Appropriation for operating activities: Appropriation for research activities:
Balance at beginning of year $ 2,385 55,728 26,355
Balance, end of the year
$
84,468
Appropriations from (returned to) unrestricted net assets $ 15 43,780 $
43,795
Disbursements during the year $ 10,964 8,810 $
19,774
Balance end of the year $ 2,400 88,544 17,545 $
108,489
14. Contingent Liabilities (a) The University is a defendant in a number of legal proceedings. Included is a lawsuit filed by former trust employees claiming entitlement to benefits. The outcome of this lawsuit is not determinable at this point in time. The ultimate outcome and liability of all legal proceedings cannot be reasonably estimated at this time. Management has concluded that none of the claims meet the criteria for being recorded under GAAP. (b) The University has identified potential asset retirement obligations related to the existence of asbestos in a number of its facilities. Although not a current health hazard, upon renovation or demolition of these facilities, the University may be required to take appropriate remediation procedures to remove the asbestos. As the University has no legal obligation to remove the asbestos in these facilities as long as the asbestos is contained and does not pose a public health risk, the fair value of the obligation cannot be reasonably estimated due to the indeterminate timing and scope of the removal. The asset retirement obligations for these assets will be recorded in the period in which there is certainty that the capital project will proceed and there is sufficient information to estimate fair value of the obligation. (c) At March 31, 2011 the University had entered into agreements that provide guarantees on employee housing loans in the amount of $1,541 (2010 $1,749 restated).
15. Contractual Obligations The University has contractual obligations which are commitments that will become liabilities in the future when the terms of the contracts or agreements are met.
2010
2011 Service contracts
$
38,012 70,030
$
52,600
$
108,042
$
208,116
Capital projects
155,516
Included in service contracts are the project commitments for the University administration review and system upgrade 2 project (iS ), contracts to purchase electricity and contracts for natural gas.
53
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
2
The University’s contract with the IBM consultants working on the iS project is approximately $6,472 and will end by 2 September 2011. The total contractual obligations to other third party contractors on the iS project from April to December 2011 is $1,400. The University entered into a five-year contract due to expire December 31, 2011 but extended to March 31, 2012, to purchase blocks of electricity in order to manage its exposure to volatility in electrical prices. The approximate contractual obligation for electricity is $7,900 (2010 $17,200). To manage its risk exposure to natural gas, the University has entered into an Energy Purchase Agreement, expiring September 30, 2013, based on an index (floating on the spot market) price with an option to hedge any portion of the requirement at any time. At March 31, 2011, the University had hedged a portion of this contract by fixing the price on a portion of its estimated consumption. Using best estimates of future consumption and forward market prices on March 31, 2011, the approximate contractual obligation for natural gas including executed hedge contracts is $22,240 (2010 $35,400). The University’s commitments for operating leases for the next five years are as follows: 2012 - $4,042; 2013 - $3,789; 2014 - $3,751; 2015 - $3,533; 2016 - $3,444. The University is one of 58 members of CURIE, the Canadian Universities Reciprocal Insurance Exchange, a self-insurance reciprocal established to share the insurable property, liability, and errors and omissions risks of member universities. The projected cost of claims against the exchange is based on actuarial projections and is funded through members’ premiums. As at December 31, 2010 CURIE had a surplus of $9,225 (2009 $10,992). The University participates in five of the underwriting periods, which have an accumulated surplus of $43,288 (2009 $32,032) of which the University’s pro rata share is approximately 5.79% (2009 5.84%). This surplus is not recorded in the financial statements.
16. Budget Comparison (unaudited) The University’s 2010-11 budget was approved by the Board of Governors and was presented to the Minister of Advanced Education and Technology as part of the University’s submission of its 2010-14 Business Plan. Certain budget figures from the University’s 2010-14 Business Plan have been reclassified to conform to the presentation adopted in the 2011 financial statements.
17. Investment Income 2010
2011 Income on investments held for endowments
$
Income on other investments Recovery on Floating Rate Notes (ABCP) Gain (loss) from subsidiaries and joint venture
Investment income capitalized to endowments Amounts deferred Investment income
$
54
48,989
$
76,019
16,196
13,258
4,051
2,986
338
(424)
69,574
91,839
(31,428)
(57,944)
(6,068)
(2,385)
32,078
$
31,510
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
18. Related Party Transactions a)
The University operates under the authority and statutes of the Province of Alberta. Transactions between the University and the Government of Alberta (GOA) are measured at the exchange amount and summarized below. 2011
Revenue from GOA Advanced Education and Technology: Operating Capital Research Access to the Future Fund (matching grants) Alberta Innovates Bio Solutions Alberta Innovates Energy and Environment Alberta Innovates Health Solutions Alberta Innovates Technology Futures Other Total Advanced Education and Technology
$
Other GOA departments and agencies grants: Alberta Health and Wellness Alberta Health Services Other Total other GOA departments and agencies Total contributions received Less: deferred contributions Government of Alberta grants Accounts receivable Advanced Education and Technology Other GOA departments and agencies
Accounts payable Advanced Education and Technology Other GOA departments and agencies
423,858 97,899 10,292 556 2,313 1,994 29,911 7,335 18,684 592,842
$
426,432 193,656 16,006 1,319 241 1,187 27,685 14,246 12,619 693,391
45,407 7,283 19,657 72,347
15,808 11,474 2,398 29,680
665,189 (165,484)
723,071 (223,488)
$
499,705
$
499,583
$
1,281 13,194
$
22,917 8,438
$
14,475
$
31,355
$
537 5,192
$
153 35
$
5,729
$
188
The University has long-term liabilities with Alberta Capital Finance Authority as described in note 8.
55
2010
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
b)
Alberta Health Services (AHS) is related to the Province of Alberta since its board is appointed by the Minister of Health and Wellness. As the University and the Province of Alberta are related parties, AHS is a related party to the University. Transactions between the University and the AHS are summarized as follows: 2011
2010
The University of Calgary pays to AHS in the normal course of operations amounts related to utilities; salaries and benefits; and materials, supplies and overheads. Expenditures incurred:
$
14,014
$
18,678
The University of Calgary receives from AHS in the normal course of operations amounts related to physicians; research projects, studies and grants, programs; and support services. Revenues included in income: Net receivable due to the University of Calgary by AHS:
$ $
68,557 7,843
$ $
55,639 8,344
The University leases land to AHS for a parkade at the Foothills Medical Centre and the Alberta Children’s Hospital. Effective September 2003 the University and AHS entered into a 25-year agreement for AHS to lease space in the University Research Centre Building. This lease has been accounted for as a capital lease. At March 31, 2011, the carrying value of the lease receivable is $14,438 (2010 $14,737). During the year the University received $1,384 in lease payments (2010 $1,384), $1,086 of which was recognized as interest income (2010 $1,107).
19. Funds Held on Behalf of Others The University holds the following funds on behalf of others over which the Board has no power of appropriation. Accordingly, these funds are not included in the University’s financial statements.
The Arctic Institute of North America Alberta Sulphur Research CDN Research Institute-Law and the Family U of C Day Care Centre Others
$
Total Funds Held on Behalf of Others
$
56
2011 965 555 388 364 767 3,039
$
$
2010 1,841 79 110 397 798 3,225
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
20. Salary and Employee Benefits Treasury Board Directive 12-98 under the Financial Administration Act of the Province of Alberta requires the disclosure of certain salary and employee benefits information. 2010
2011 Base (1) salary
Other cash (2) benefits
Other non-cash (3) (6) benefits
Total
Total
$
$
(4)
Governance Chair of the Board of Governors Members of the Board of Governors Executive President (5) (6) (7) (11) (12) Incumbent (5) (9) Interim, Past Incumbent (6) (7) (13) Past Incumbent Vice-Presidents: (6) (7) (11) Provost and Vice-President Academic Vice-President Research (5) (9) Interim (5) (6) (10) (11) (14) Past Incumbent Vice-President Finance and Services (5) (6) (9) (11) Incumbent (9) (13) Past Incumbent (5) 9) Vice-President University Relations – Interim, Past Incumbent (6) (9) Vice-President Facilities Management and Development (6) (8) (12) Vice President Development
1. 2. 3.
4. 5.
6.
$
-
$
-
$
-
-
-
323 126 -
24 -
167 -
490 150 -
127 724
328
9
158
495
488
71 246
15 110
23 292
109 648
450
270 343 283
52 45
86 93 104
356 488 432
287 93 234 460 424
Base salary includes pensionable base pay. Other cash benefits include administrative honorariums, bonuses and lump sum payments. Other non-cash benefit for President – Interim, Past Incumbent includes a vacation payout. Other non-cash benefits include the University’s share of all employee benefits and contributions or payments made on behalf of employees including pension, group life insurance, employee family assistance program, critical illness, supplementary health care, short and long-term disability plans, dental plan, supplemental retirement plan (per (6) footnote ) and accidental disability and dismemberment. The Chair and Members of the Board of Governors receive no remuneration for participation on the Board. During the fiscal year, the President - Incumbent position was occupied for nine months and the President – Interim, Past Incumbent position was held for three months. The VP Research – Interim position was occupied for seven months and the VP Research – Past Incumbent position was occupied for five months. The VP Finance – Incumbent served a full year in this role, compared to nine months in the comparative year. The VP University Relations position was vacant throughout the year. Under the terms of the supplementary retirement plan (SRP), the executive may receive supplemental retirement payments. Retirement arrangement costs as detailed below are not cash payments in the period but are period expenses for rights to future compensation. Costs shown reflect the total estimated cost to provide annual pension income over an actuarially determined post employment period. The SRP provides future pension benefits to participants based on years of service and earnings. The cost of these benefits is actuarially determined using the projected benefit method pro-rated on services, a market interest rate, and management’s best estimate of expected
57
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
7. 8.
9. 10. 11. 12. 13. 14.
costs and the period of benefit coverage. Net actuarial gains and losses of the benefit obligations are amortized over the average remaining service life with respect to each plan participant. Current service cost is the actuarial present value of the benefits earned in the current year. Prior service and other costs include amortization of past service costs on plan initiation, amortization of actuarial gains and losses, and interest accruing on the actuarial liability. Individuals in these roles earned administrative leave benefits during the year that have been included in other noncash benefits. During the term of their employment contract, the individual in this role may take up to six months of administrative leave subject to the President’s approval of the individual’s administrative leave proposal. The costs associated with the leave benefits are recorded when incurred. The employment contracts for these individuals do not provide for administrative leave benefits. Administrative leave benefits were not paid to this individual. Individuals in these roles received an executive allowance included in other non-cash benefits. Individuals in these roles received a vehicle allowance included in other non-cash benefits. The President – Past Incumbent and VP, Finance – Past Incumbent received a housing allowance included in other non-cash benefits. The individual in this role received other cash benefits and a clinical supplement in other non-cash benefits.
The current service cost and accrued obligation for each executive under the SRP is outlined in the following table:
President Vice-Presidents: Provost and Vice-President Academic Vice-President Finance and Services Vice-President Facilities Management and Development Vice-President Development
Accrued Benefit Obligation March 31, 2010 $ -
Service costs $ 54
Interest Costs $ 3
Actuarial Loss (Gain) $ -
Accrued Benefit Obligation March 31, 2011 $ 57
202
54
13
(17)
252
28
37
3
(4)
64
105
60
8
(11)
162
325
42
19
(25)
361
The significant actuarial assumptions used to measure the accrued benefit obligation (ABO) are disclosed in Note 7.
58
NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED MARCH 31, 2011 (thousands of dollars)
21. Canada – Alberta Knowledge Infrastructure Program The Canada – Alberta Knowledge Infrastructure Program (KIP) was established to provide funding in support of capital projects at post secondary institutions in order to offset the impact of the global economic recession by providing employment opportunities. Eligible KIP projects can receive up to 50% of its funding from Government of Canada contributions through direct payments made by the Province. The remaining portion of funding for KIP projects is made up of internal resources, provincial contributions and research grants. The KIP program supports eligible costs incurred from February 24, 2009 to March 31, 2011 for two projects, and until July 31, 2011 for one project that received an extension. Amounts received from the Province of Alberta representing Government of Canada contributions and eligible costs incurred on KIP projects are as follows:
Contributions Eligible Costs
$ $
2011 32,899 60,112
$ $
2010 32,899 52,127
February 24, 2009 to March 31, 2009 $ 2,384
$ $
Total 65,798 114,624
The remaining contractual obligation to complete the projects at March 31, 2011 is $5,183. This amount is included in note 15.
22. Insurance Claims On July 12, 2010, University property was damaged as a result of a hailstorm. During the winter months, the University also suffered some flood damages as a result of frozen pipes. The University maintains adequate insurance coverage to mitigate its financial risk to such events. Damages incurred Included in repairs and maintenance expense is $866 on repairs to the affected buildings, $453 of which is considered an impairment loss and therefore was not capitalized as an asset. Amounts recoverable from Insurance Company The University has unrecorded amounts due from the insurance company, pending settlements, related to the above events. Management is confident that these accounts will be collected shortly after year-end, and in accordance with section 3290 (Contingencies) of the CICA handbook; the University has not recorded this contingent gain.
23. Comparative Figures Certain 2010 figures have been reclassified to conform to the presentation adopted in the 2011 financial statements. 24. Subsequent Event
59
For more information about the content of this report, or to share your comments about it, please contact: University of Calgary Office of the Provost provost@ucalgary.ca EXCELLENCE
ucalgary.ca
INNOVATION
SUCCESS
60