Sam Houston State University (SHSU) provides the following financial statements:
a) A Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate Standard Review Report guide (to be available January 2019).
b) A statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributed to operations for the most recent year.
c) An annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.
SHSU is a member of the Texas State University System (TSUS) “under the management and control of the Board of Regents, Texas State University System” as specified in the Texas Education Code, Chapter 96.61 [1].
Institutional Audit
The fiscal year 2018 audit requirement is fulfilled by a Standard Review Report performed by an external audit firm. The fiscal year 2018 Standard Review Report is anticipated to be completed and available by January, 2019 [2].
SHSU also has an internal audit function that reports directly to the Board of Regents [3] and is described in detail in Standard 13.3. The Finance and Audit Committee of the Board of Regents oversees this function [4].
Financial Position and Reporting
The Vice President for Finance and Operations has designated the University Controller as the financial reporting officer who is responsible for the integrity of the Annual Financial Report (AFR) and for the establishment of effective internal controls for its preparation. SHSU’s AFRs for fiscal years 2014 [5], 2015 [6], 2016 [7], and 2017 [8] have been prepared in accordance with Government Accounting Standards Board requirements and in accordance with SHSU policy [9], TSUS policies [10] on AFR preparation, and with the Texas State Comptroller of Public Accounts’ Reporting Requirements for Annual Financial Reports of State Agencies and Universities [11]. The AFR is submitted annually to the TSUS Office and is included in the combined TSUS AFR. That report is then submitted to the Comptroller of the State of Texas and is included in the Consolidated Annual Financial Report (CAFR) for the State of Texas. SHSU has provided a Financial Statement Analysis as of August 31, 2017 [12].
Also provided is SHSU’s Statement of Change in Unrestricted Net Position, Exclusive of Plant, for fiscal years 2014 through 2017 [13]. This statement shows that SHSU is investing in the operations of an expanding university.
Annual Budget
Legislative Appropriation Process – Educational & General
The Texas State Legislature meets in regular session every other year. The legislative session begins the second week of January in odd numbered years (i.e. 2013, 2015, 2017, etc.). The next regular session will begin the second week of January 2019.
The first legislative bill introduced each regular session is the appropriation bill for the next biennium for all State of Texas agencies. “Higher Education in Texas” is Article III of the proposed appropriation bill. The next session will consider legislative appropriations for fiscal years 2020 and 2021. The fiscal year for Texas State Agencies begins September 1 and ends August 31 of each year (e.g., fiscal year 2018 begins 09/01/17 and ends 08/31/18). The appropriation process begins each July immediately preceding a legislative session.
Detailed instructions for developing the biennium legislative request are received from the Texas Legislative Budget Board (LBB). A copy of the letter received pertaining to biennium fiscal year 2018 and fiscal year2019 is provided for review [14]. The legislative request contains formula-driven appropriations based on a variety of inputs (e.g., semester credit hour [SCH], headcount, square footage, appraisal values) for “Instruction and Operations” and “Infrastructure” (physical plant, grounds, custodial and purchased utilities). Non-formula and Non-Formula Support appropriations are also requested utilizing the LBB instructions. The instructions for the current biennium (fiscal year 2018 and fiscal year 2019) asked for only non-formula and special item requests. The formula items are determined by the LBB following instructions from the Lieutenant Governor and Speaker of The House. A summary of the SHSU Biennium Request is provided for review [15].
During the legislative session (January through May), SHSU representatives are asked to appear before the Senate Finance Committee, the Higher Education Appropriations Committee, and the Higher Education Sub-Committee of the House Appropriations Committee. During these meetings, questions from committee members are answered, and the University President presents comments regarding the fiscal needs of SHSU for the next two-year biennium. Generally in late March or early April two appropriation bills, one Senate version and one House version, are presented. This then creates the need for a conference committee of Senate and House members. The conference committee reviews and determines the final appropriation draft sent to both legislative houses. Generally, on the last night of the legislative session, an appropriation bill is passed. It is then forwarded to the Governor for consideration, and a final bill is signed into law by the Governor. Copies of three biennium summaries of Legislative Appropriation Requests for fiscal years 2012-2013, 2014-2015, and 2016-2017 are provided [16] [17] [18].
Categories of Legislative Appropriations – Educational and General
The major categories of the appropriation for SHSU are as follows:
Posting of Appropriations
The Office of the State of Texas Comptroller posts the appropriations passed by legislature in a timely manner. Funds are available for utilization by the Agency on the first day of September of each year. The posting of appropriations are receivables for SHSU, and this posting is recorded in a timely manner by the Texas Comptroller. The posting of appropriations provides the funds for the operational “bottom line” for SHSU’s educational budget. SHSU’s biennial appropriations for fiscal years 2012-2013, 2014-2015, 2016-2017, and 2018-2019 are provided [19] [20] [21] [22].
Capital Appropriations – Higher Education Assistance Fund (HEAF)
In 1986, the Texas Constitution was amended by voters to establish the Higher Education Assistance Funds (HEAF). The fund, $100 million per year, provides monies for capital improvements to SHSU and other institutions not eligible for Permanent University Fund disbursements. HEAF monies may be spent only for Educational and General capital equipment, major renovation and repair, new construction, real estate acquisition and library books, and periodicals and binding.
SHSU received $17,329,858 for fiscal year 2018 in HEAF funding. The approved budget for fiscal year 2018 is as follows:
| Capital Equipment – Academics | $ 1,100,306.00 |
| Repair and Renovations | $ 0.00 |
| Computer Services | $ 1,300,000.00 |
| Library | $ 42,000.00 |
| Major Repairs and Renovations | $ 8,000,000.00 |
| Capital Equipment – President | $ 0.00 |
| Capital Equipment – VP-Academic Affairs & Graduate Studies | $ 742,694.00 |
| Capital Equipment – VP-Student Services | $ 0.00 |
| Capital Equipment – VP-Advancement | $ 16,650.00 |
| Capital Equipment – VP-Enrollment Management | $ 33,453.00 |
| Capital Equipment – Texas Research Institute for Environmental Studies | $ 115,000.00 |
| Capital Equipment – Finance & Operations | $ 5,979,755.00 |
The HEAF funds and proceeds from new construction bonds provide sufficient funding to offset depreciation expense.
Institutional Debt – SHSU
All debt of SHSU is held by the TSUS. The bonded indebtedness by TSUS for SHSU as of August 31, 2017, was as follows:
| Tuition Revenue Bonds (TRB) | |
| Series 2008 Performing Arts Center | $ 414,750.00 |
| Series 2008 Refunding ref 98a TRB | $ 190,973.24 |
| Series 2010 Refunding TRB | $ 5,941,880.68 |
| Series 2012 Refunding 2002 Farrington | $ 161,720.91 |
| Series 2015A Refunding 2005 Property Infrastructure | $ 312,650.10 |
| Series 2015A Refunding 2008 Performing Arts Center | $ 5,049,150.00 |
| Series 2017A Bio Lab | $ 55,292,486.62 |
| Series 2017A Refunding 2008 Performing Arts Center | $ 1,437,304.82 |
| Non-Tuition Revenue Bonds (NONTRB) | |
| Series 2008 Academic Building | $ 693,000.00 |
| Series 2008 Performing Arts Center | $ 1,149,750.00 |
| Series 2008 Refunding 98a NONTRB | $ 1,361.06 |
| Series 2009 Dining Facility | $ 295,750.00 |
| Series 2010 Refunding 2002 Baseball/Softball | $ 1,276,869.23 |
| Series 2010 Refunding 2002 Bearkat Village | $ 4,453,841.49 |
| Series 2010 Refunding 2002 Business Annex #1 | $ 1,276,869.23 |
| Series 2010 Refunding 2002 Business Annex #2 | $ 319,217.31 |
| Series 2010 Refunding 2002 Parking | $ 1,428,877.47 |
| Series 2010 Refunding 2002 Rec Sports | $ 2,067,312.09 |
| Series 2010 Refunding 2003 Baseball/Softball #2 | $ 425,623.08 |
| Series 2010 Refunding 2003 Business Annex #3 | $ 319,217.31 |
| Series 2010 Refunding 2003 Sam Houston Village | $ 3,632,996.98 |
| Series 2010A Residence Hall | $ 24,263,493.94 |
| Series 2011 The Woodlands University Center | $ 38,979,162.60 |
| Series 2012 Refunding 2002 Ag | $ 11,508.84 |
| Series 2012 Refunding 2002 Athletic | $ 46,002.28 |
| Series 2012 Refunding 2002 Business Bldg. | $ 46,002.28 |
| Series 2012 Refunding 2002 Farrington | $ 1,930.00 |
| Series 2012 Refunding 2002 Housing | $ 159,858.08 |
| Series 2012 Refunding 2002 Parking | $ 51,755.26 |
| Series 2012 Refunding 2002 Sports | $ 74,761.24 |
| Series 2012 Refunding 2003 Business | $ 329,799.82 |
| Series 2012 Refunding 2003 Housing | $ 3,677,399.91 |
| Series 2012 Refunding 2003 Softball | $ 424,515.03 |
| Series 2012 Turf Install | $ 1,009,368.78 |
| Series 2013 Sycamore Vivarium | $ 1,477,300.00 |
| Series 2013 University Camp | $ 3,964,100.00 |
| Series 2014 Advising and Counseling Center | $ 9,381,650.00 |
| Series 2015A Pirkle | $ 14,738,943.92 |
| Series 2015A Refunding 2005 | $ 2,094,141.06 |
| Series 2015A Refunding 2005 Housing Facility | $ 9,033,315.46 |
| Series 2015A Refunding 2008 Academic Building | $ 8,670,300.00 |
| Series 2015A Refunding 2008 Performing Arts Center | $ 14,444,700.00 |
| Series 2015A South. Res. Complex | $ 96,902,618.92 |
| Series 2015B Pirkle | $ 3,848,810.56 |
| Series 2015B South Dining Hall | $ 6,416,085.44 |
| Series 2017A Coliseum | $ 13,955,000.00 |
| Series 2017A Refunding 2008 Academic Building | $ 2,416,250.00 |
| Series 2017A Refunding 2008 Performing Arts Center | $ 4,025,056.90 |
| Series 2017A Refunding 2009 Dining Facility | $ 2,440,250.00 |
| Series 2017B Financial Plaza | $ 7,568,306.22 |
| Total Debt Service | $ 356,593,988.16 |
Total Revenue and Percentage of Revenue Provided By State of Texas Appropriation
The sources of revenue for SHSU’s fiscal budget year 2018 are as follows:
| Educational and General Funds | % of Total | ||
| State Appropriation | (75.81%) | $ 97,034,358 | |
| Tuition and Fees | (24.19%) | $ 30,956,883 | |
| Total Appropriated Funds | $ 127,991,241 | 36.38% | |
| Auxiliary Enterprises Funds | $ 71,635,378 | 20.36% | |
| Designated Funds | $ 152,144,736 | 43.25% | |
| Total Estimated Revenues | $ 351,771,355 | 100% |
The percentage of funding by legislative appropriation has decreased steadily for the past ten years. The locally collected designated tuition and fees per semester credit hour (SCH) has increased from $84/SCH in fiscal year 2008 to $165.50/SCH for fiscal year 2018. The revenues from designated tuition and other fees have provided needed monies to provide additional faculty salaries and needed new academic space to meet the 27% increase in enrollments at SHSU over this same time period.
Preparation of the Budget
When the state appropriation process is finalized, the preparation of the SHSU budget begins. The Vice President for Finance and Operations and Director of Budget are responsible for the preparation of the budget. The Vice President and Director of Budget meet with each vice president and dean for a formal budget presentation of new requests for the next fiscal year. These meetings are followed by a budget retreat during which the President’s Cabinet and Council of Academic Deans present their requests to the President. The aforementioned budget requests are compiled into a comprehensive document, and an estimate of available resources is prepared by the Budget Office. Considerations in the budget process include appropriations from the Texas Legislature and anticipated revenue from tuition, fees, and auxiliary enterprises. Expense budgets are established not to exceed the anticipated revenues. The President’s Cabinet functions as the University’s budget committee and meets formally to consider all requests and approve allocations.
The budget is prepared with input from each of these individuals and is consistent with the SHSU Mission [2], Master Plan [23], Strategic Plan [24], and TSUS Board of Regents guidelines [25]. The SHSU Budget Procedures and Guidelines [26] hold preparers and users to high financial responsibility to ensure financial stability and good stewardship of public funds.
The budget draft is presented to the SHSU President for approval and subsequently to the TSUS Board of Regents for approval prior to the beginning of the fiscal year. Included are SHSU budgets for fiscal years 2015 [27], 2016 [28], 2017 [29], and 2018 [30].
Budget Summaries
Annually, the TSUS Board of Regents receives a Budget Summary when the budget for the upcoming year is submitted for approval [31] [32] [33] [34].