Central Michigan University’s Board of Trustees met in a special session today to formally receive the independent audit of the university’s 2014-2015 financial statements. Auditors issued a clean, unmodified opinion — the highest opinion possible.
Trustees first reviewed the audit by Plante Moran, the university’s external audit firm, at their September meeting. The audit couldn’t be finalized at that time because the Michigan Auditor General had not issued a final determination of CMU’s share of a pension liability to the Michigan Public School Employees Retirement System.
The $93 million liability reduces the university’s unrestricted net position from nearly $694 million to $603.8 million. This figure includes CMU’s investment in capital assets, scholarships, research, instructional use and capital projects.
In September, Plante Moran auditor Vicki VanDenBerg told trustees the recording of the liability has created a large deficit for several universities. Fortunately, CMU has managed its resources well and is financially sound.
The MPSERS pension system is underfunded, creating a significant liability for Michigan’s K-12 schools, community colleges and seven public universities, including CMU.
The audit also reflects that CMU contributes a greater percentage of its budget to educational operations than do most of its peers. CMU allocates 55 percent of its expenses to academics and student services. In comparison, auditors recommend at least a 40 percent investment in academics and student services.