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Financial Health Indicator / Measurement Project

Financial Health Indicator / Measurement Project. Chief Finance and Facilities Officers Conference January 27, 2010. Purpose of project. Identifies possible financial or control issues putting college/university at financial risk. Modeled in part after Higher Learning Commission program.

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Financial Health Indicator / Measurement Project

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  1. Financial Health Indicator / Measurement Project Chief Finance and Facilities Officers Conference January 27, 2010

  2. Purpose of project • Identifies possible financial or control issues putting college/university at financial risk. • Modeled in part after Higher Learning Commission program. • Requires reporting (response) to the specific exception.

  3. Measures: short-term • Repair and replacement expenses over a two-year period. • Overdraft in a local bank account during the past fiscal year. • MAPS to MnSCU and local bank account reconciliations exception reporting items triggered during the past fiscal year. • Forecast General Fund cash balance. • Colleges/universities cash balance <15% • Colleges/universities cash balance =>15% AND projecting cash in any month to fall below 10%

  4. Monthly cash flow example

  5. Measures: long-term • Accrual net operating revenue negative for 2 consecutive years. • Accrual primary reserve level <1.6 months for 2 consecutive years OR year-end designated Board reserve balance >60% of total year-end General Fund balance. • Composite Financial Index between 0.5 and 1.5 for 2 consecutive years OR under 0.5 for most recent year.

  6. Next steps • Feedback on financial measures from college/university presidents, chief financial officers. • Present financial measures to Board of Trustees at their March meeting. • Develop “response” format – match response with exception trigger. • Implementation in fiscal year 2011 to the specific exception.

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