Sam Houston State University (SHSU) manages its financial resources in a responsible manner. SHSU is a member of the Texas State University System as specified in the Texas Education Code, Chapter 96.61: “Sam Houston State University is a coeducational institution of higher education located in the city of Huntsville. It is under the management and control of the Board of Regents, Texas State University System” [1].
One of the strongest indicators of SHSU’s financial responsibility is its audit track record. As an agency of the State of Texas, SHSU is included annually in a statewide single audit [2] [3] [4]. SHSU is also included in the State of Texas Comprehensive Annual Financial Report (CAFR) [5] [6], which is a set of financial statements for a state, municipality, or other governmental entity that comply with the accounting requirements established by the Governmental Accounting Standards Board (GASB).
In addition to the annual State of Texas Statewide Audit, SHSU also has an internal audit function that reports directly to the Board of Regents [7]. The system-wide internal audit function is coordinated through the System Director of Audits & Analysis, who reports directly to the Finance and Audit Committee of the Board of Regents. The mission of the Audits and Analysis office includes the following:
SHSU’s Multi-year Statement of Change in Unrestricted Net Position Exclusive of Plant for the fiscal years (FY) 2014 through 2017 demonstrates both the stability of SHSU and its investment in the operations of an expanding University [8]. The University has maintained substantial balances for the past two fiscal years while actively supporting institutional growth. Past planning allowed SHSU to pursue a more aggressive model of reinvestment into operations while retaining strong fund balances that ensure the financial stability of the University, and revenues continue to increase [8].
The Annual Budget documents for FY 2015 [9], FY 2016 [10], FY 2017 [11], and FY 2018 [12] further demonstrate SHSU’s financial responsibility. Revenues and expenditures increase annually, as do the student population and faculty. Table 1 below shows the increases in tuition per semester credit hour (SCH) charged from FY2015 through FY2018. Table 2 presents the increase in student headcount and faculty full-time equivalent (FTE) for the same period. Table 3 demonstrates the legislative appropriations for the most recent four years.
Table 1. Five-year Tuition Rate History for Undergraduate and Graduate Students
| Fiscal Year | Statutory Tuition per SCH | Designated Tuition per SCH | Total Tuition per SCH |
|---|---|---|---|
| 2015 | 50 | 154 | 204 |
| 2016 | 50 | 165.40 | 215.40 |
| 2017 | 50 | 165.40 | 215.40 |
| 2018 | 50 | 178.00 | 228.00 |
| Fiscal Year | Statutory Tuition per SCH | Designated Tuition per SCH | Total Tuition per SCH |
|---|---|---|---|
| 2015 | 50 | 154 | 204 |
| 2016 | 50 | 185.50 | 235.50 |
| 2017 | 50 | 185.50 | 235.50 |
| 2018 | 50 | 199.50 | 249.50 |
Table 2. Five-year History of Fall Semester Student Headcount and Faculty FTE
| Fiscal Year | Student Headcount | Faculty FTE |
|---|---|---|
| 2015 | 19,573 | 840.00 |
| 2016 | 20,031 | 857.62 |
| 2017 | 20,477 | 891.33 |
| 2018 | 20,938 | 914.26 |
Table 3. Legislative Appropriations
| Fiscal Year | Legislative Revenue (GR) | Additional Appropriations (GR) | Capital Appropriations | State Grants & Contracts | Total State Support |
|---|---|---|---|---|---|
| 2014 | 43,504,925 | 10,987,875 | 11,893,110 | 11,890,652 | 78,276,562 |
| 2015 | 43,564,016 | 12,461,032 | 11,893,110 | 12,107,464 | 80,025,622 |
| 2016 | 52,437,410 | 15,669,378 | 11,553,239 | 12,979,314 | 92,639,341 |
| 2017 | 53,615,930 | 16,379,789 | 17,329,858 | 13,639,038 | 100,964,615 |
SHSU has increased construction activity to keep abreast of its growing student population. In turn, the University’s bonded indebtedness has also increased. Although bonds are sold by the Texas State University System (TSUS) Board of Regents and held in the system’s name, SHSU is responsible for the annual payment of that principal and interest. The current bond rating for the TSUS Board of Regents is Aa3 (Moody’s) and A+ (S&P). The TSUS Board of Regents is careful to be sure that the University is financially capable of making those payments prior to allowing the issuance of the bonds. Although SHSU’s debt is reported at the system level and not on the financial statements of SHSU, SHSU maintains a strong debt service ratio when the debt is included. Debt service ratio represents the ability to meet annual interest and principal payments on debt. Table 4 depicts the University’s debt service ratio.
Table 4. Debt Service Ratio
| Fiscal Year | Debt Service Ratio |
|---|---|
| 2014 | 2.54 |
| 2015 | 1.82 |
| 2016 | 3.03 |
| 2017 | 3.00 |
Another indicator of the financial responsibility of the University is the success of its initial capital campaign [13]. SHSU closed its first capital campaign on August 30, 2010. This campaign surpassed its $50 million goal, with more than $61 million in gifts and commitments secured. In 2014, SHSU began preparations for its second capital campaign, implementing a “quiet phase” solicitation of the University’s best supporters. The University kicked off the $125 million “Honoring Traditions. Creating Futures.” campaign on January 28, 2017. To date, approximately $85 million has been secured in contributions, pledges, and expectancies. SHSU’s endowment position is discussed in detail in Standard 13.1.
The Endowment Funds Investment Policy [14] and February 28, 2018, investment report further demonstrate the financial stability of SHSU [15]. SHSU holds a diversified investment portfolio, including bank deposits, short-intermediate funds, long-term funds, and endowment funds. As of February 28, 2018, the fair market value of the University’s investments was $299,115,367 [15].
Finally, financial responsibility is demonstrated by the fact that there are no lawsuits or other conditions pending which would adversely impact the financial stability of the institution.