tarleton state university foundation, inc · tarleton state university foundation, inc. august 31,...

TARLETONSTATEUNIVERSITY

FOUNDATION,INC.

FINANCIALSTATEMENTSWITH

INDEPENDENTAUDITOR’SREPORT

August31,2017and2016

TARLETON STATE UNIVERSITY FOUNDATION, INC. August 31, 2017 and 2016

TABLE OF CONTENTS

Page Independent Auditor’s Report 1 – 2 Financial Statements Statements of Financial Position 3 Statements of Activities 4 Statement of Cash Flows 5

Notes to Financial Statements 6 – 14 Supplemental Information Schedule of Functional Expenses 15

George, Morgan & Sneed, P.C. 1849 Wall Street | Weatherford, TX 76086 | Phone 817.594.2704 | Fax 817.599.7389

www.gms-cpa.com

INDEPENDENT AUDITOR’S REPORT To the Board of Directors Tarleton State University Foundation, Inc. Stephenville, Texas We have audited the accompanying financial statements of Tarleton State University Foundation, Inc. (a nonprofit organization), which comprise the statements of financial position as of August 31, 2017 and 2016, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Tarleton State University Foundation, Inc. as of August 31, 2017 and 2016, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

1

2

Report on Supplmentary Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The schedule of functional expenses on page 14 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements as a whole.

Weatherford, Texas November 13, 2017

TARLETON STATE UNIVERSITY FOUNDATION, INC.STATEMENTS OF FINANCIAL POSITION

2017 2016ASSETS

CURRENT ASSETSCash $ 239,657 $ 205,170 Restricted cash 87,261 67,860 Investments 477,288 440,109 Miscellaneous receivable 10,800 400

TOTAL CURRENT ASSETS 815,006 713,539

PROPERTY AND EQUIPMENT 209 299

OTHER ASSETSRestricted investments 126,324 90,098 Endowment investments 18,560,847 16,389,058 Split interest investments 184,004 171,692 Loan fund receivable 12,846 544,387 Real Estate 86,400 86,400 Mineral Interest 1 1

TOTAL ASSETS $ 19,785,637 $ 17,995,474

LIABILITIES AND NET ASSETSCURRENT LIABILITIES

Accounts payable and accrued expenses $ 4,436 $ 5,451 Current portion of annuity payable 6,923 6,923

TOTAL CURRENT LIABILITIES 11,359 12,374

LONG-TERM LIABILITIESAnnuity payable, less current portion 94,890 107,931

TOTAL LIABILITIES 106,249 120,305

NET ASSETSUnrestricted Board Designated Endowment 2,411,638 2,205,520 Giving Annuity Reserve Fund 101,027 100,358 Undesignated 699,950 627,566 Total Unrestricted 3,212,615 2,933,444

Temporarily Restricted 4,671,768 3,869,178 Permanently Restricted 11,795,005 11,072,547

TOTAL NET ASSETS 19,679,388 17,875,169

TOTAL LIABILITIES AND NET ASSETS $ 19,785,637 $ 17,995,474

AUGUST 31, 2017 and 2016

The accompanying notes are an integral part of these financial statements. 3

TARLETON STATE UNIVERSITY FOUNDATION, INC.STATEMENT OF ACTIVITIES

2017 2016UNRESTRICTED NET ASSETS

Unrestricted support and revenuesContributions 13,535$ 10$ Lease 5,000 5,000 Miscellaneous 5,088 4,810 Interest and dividends 48,276 42,546 Administrative fees 132,267 118,391 Realized and unrealized gains and (losses) on investments 276,703 107,914

Total unrestricted revenues and gains 480,869 278,671 Net assets released from restriction

Reclassify to temporarily restricted - (5,108) Restrictions satisfied by payments 491,948 581,906

Total unrestricted revenues, gains and other support 972,817 855,469

Expenses and lossesProgram services Educational Scholarships 339,234 376,449 University Support 69,858 104,563 Total program services 409,092 481,012 Supporting Services Management and General 284,554 277,883

Total expenses and losses 693,646 758,895

Increase (Decrease) in Unrestricted Net Assets 279,171 96,574

TEMPORARILY RESTRICTED NET ASSETSContributions 123,541 166,711 Miscellaneous 19,789 Interest and dividends 197,172 189,230 Realized and unrealized gains and (losses) on investments 1,502,520 611,879 Net assets released from restriction

Reclassify to permenently restricted (548,484) - Reclassify from unrestricted - 5,108 Restrictions satisfied by payments (491,948) (581,906)

Increase (Decrease) in Temporarily Restricted Net Assets 802,590 391,022

PERMANENTLY RESTRICTED NET ASSETSContributions 121,879 156,823 Interest and dividends 52,095 51,772 Net assets released from restriction

Reclassify from temporarily restricted 548,484 -

Increase (Decrease) in Permanently Restricted Net Assets 722,458 208,595

Total Change in Net Assets 1,804,219 696,191

Net Assets at Beginning of Year 17,875,169 17,178,978

Net Assets at End of Year 19,679,388$ 17,875,169$

FOR THE YEARS ENDED AUGUST 31, 2017 and 2016

The accompanying notes are an integral part of these financial statements.4

TARLETON STATE UNIVERSITY FOUNDATION, INC.

STATEMENTS OF CASH FLOWS

2017 2016

CASH FLOWS FROM OPERATING ACTIVITIES

Increase (decrease) in net assets 1,804,219$ 696,191$

Adjustments to reconcile increase in net assets

to net cash provided by operating activities:

Depreciation 90 90

Noncash donations (21,827) (75,732)

Realized and unrealized gains and (losses) on investments (1,779,223) (719,793)

Contributions to permanent endowments (121,879) (156,823)

Interest and dividends restricted for investment in permanent endowments (52,095) (51,772)

(Increase) decrease in loan fund receivable 531,541 7,550

(Increase) decrease in miscellaneous receivable (10,400) (400)

Increase (decrease) in liabilities (14,056) 15,888

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 336,370 (284,801)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investments (1,780,258) (783,867)

Proceeds from sale of investments 1,323,802 859,771

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (456,456) 75,904

CASH FLOWS FROM FINANCING ACTIVITIES

Contributions restricted for investment in permanent endowment 121,879 156,823

Interest and dividends restricted for investment in permanent endowments 52,095 51,772

NET CASH PROVIDED BY FINANCING ACTIVITIES 173,974 208,595

INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS 53,888 (302)

BEGINNING CASH AND EQUIVALENTS 273,030 273,332

ENDING CASH AND EQUIVALENTS 326,918$ 273,030$

SUPPLEMENTAL DISCLOSURES

Noncash investing and financing transaction:

Stock Donations 21,827$ 75,732$


The accompanying notes are an integral part of these financial statements. 5

TARLETON STATE UNIVERSITY FOUNDATION, INC. NOTES TO FINANCIAL STATEMENTS

August 31, 2017 and 2016

6

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities

Tarleton State University Foundation, Inc. (the “Foundation”) is a not-for-profit organization that provides financial support to Tarleton State University located in Stephenville, Texas and scholarships for students attending the University. These programs are funded with contributions from donors and investment income earned on endowments. Basis of Accounting and Presentation

The financial statements of the Foundation have been prepared on the accrual basis of accounting. The Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Income Taxes The Organization is a not-for-profit organization that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code. The Organization’s federal Return of Organization Exempt from Income Tax (Form 990) for 2014, 2015, and 2016 are subject to examination by the IRS, generally for three years after they were filed.

Contributions Contributions received are recorded as increases in unrestricted, temporarily restricted, or permanently restricted net assets, depending on the existence or nature of any donor restrictions. All donor-restricted contributions are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statement of activities as net assets released from restrictions.


August 31, 2017 and 2016

7

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Promises to Give Unconditional promises to give are recognized as contribution revenue in the period received and as assets, decreases of liabilities, or expenses depending on the form of the benefits received. Promises to give are recorded at net realizable value if expected to be collected in one year and at fair value if expected to be collected in more than one year. Conditional promises to give are recognized when the conditions on which they depend are substantially met. Unconditional promises to give consist of bequests where the estates are legally required to make distributions to the Foundation. Bequests receivable totaled $10,000 at the end of the year. Donated Services A significant portion of the Foundation’s functions are conducted by unpaid volunteer officers and committee members. The value of this contributed time is not reflected in the accompanying financial statements since the volunteers’ time does not meet the criteria for recognition under generally accepted accounting principles. Loan Fund Receivable The Foundation received a donation to establish a permanent endowment fund to provide loans for student tuition at Tarleton State University. The Foundation entered into an agreement with Tarleton State University for the making and administration of the loans. The Foundation transfers funds to the loan fund from the endowment when necessary. The fund and principal of each student loan are the property of the Foundation. The University retains all interest and fees accrued and collected on the loans as an administrative fee. The University provides an annual report to the Foundation by November 30 of each year of the status of the student loans made from this fund. Management has estimated the allowance based on the previous fiscal year report from the University. The allowance for August 31, 2017 and 2016 are $31,441 and $49,514 respectively. The Foundation received a judgment that changes the purpose of this endowment. As a result the University stopped making loans from the fund after the fall 2016 semester. The funds at the University were returned to the Foundation and added to the Endowment. The University will continue to administer the outstanding loans and will transfer the amounts repaid back to the Foundation.


August 31, 2017 and 2016

8

NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and Cash Equivalents

For purposes of the statement of cash flows, the Foundation considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Restricted cash is limited in use to payment of scholarships and other university support. Cash and money market accounts in the endowment brokerage accounts are reported as investments instead of cash because the Foundation holds those funds as an endowment. Property and Equipment

Purchased property and equipment is capitalized at cost. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated asset to a specific purpose. Depreciation and amortization is provided on the straight-line method over the estimated useful lives as follows: Office Equipment 3 - 5 years Depreciation expense for the year ended August 31, 2017 and 2016 were $90 and $90 respectively. Concentration of Credit Risk Financial instruments that potentially subject the Foundation to concentrations of credit risk are primarily cash and cash equivalents and marketable securities. The Foundation maintains its cash balances at two financial institutions in Stephenville, Texas. Accounts at the institutions are insured by Federal Deposit Insurance. At August 31, 2017 and 2016 100% of the Foundation’s cash balances were covered by FDIC insurance. The Foundation invests with a Trust Company that is regulated by the Texas Department of Banking. The Foundation’s investment accounts are not covered by FDIC or Securities Investor Protection Corporation (SIPC).

Functional Allocation of Expenses

The costs of providing various programs and activities have been summarized on a functional basis in the statement of activities.


August 31, 2017 and 2016

9

NOTE B – FAIR VALUE OF FINANCIAL INSTRUMENTS The Foundation's significant financial instruments are cash, investments, loan fund receivable and bequests receivable. The carrying amounts of cash, the loan fund receivable and bequests receivable approximate fair value. Investments in equity securities and all investments in debt securities are reported at fair value, as determined by independent published sources, with the related gains and losses included in the statement of activities. Investment income and gains restricted by a donor are reported as an increase in temporarily restricted net assets or permanently restricted net assets depending on the donor’s intentions. Fair values of investments are measured on a recurring basis. Fair values for investments are determined by reference to quoted market prices and other relevant information generated by market transactions (Level 1 inputs).

Investments are summarized as follows:

(Level 1) (Level 1)Market Unrealized Market Unrealized

Cost Value Gain/(Loss) Cost Value Gain/(Loss)

UnrestrictedCash 116,094$ 116,094$ -$ 112,830$ 112,830$ -$ Mutual Funds 297,299 361,194 63,895 288,288 327,279 38,991 Total Unrestricted 413,393 477,288 63,895 401,118 440,109 38,991

Temporarily RestrictedCash 96,957 96,957 - 56,404 56,404 -

Mutual Funds 174,743 182,839 8,096 178,746 170,530 (8,216) Common Stocks 6,175 30,532 24,357 6,175 34,856 28,681 Total Temporarily Restricted 277,875 310,328 32,453 241,325 261,790 20,465

EndowmentsCash 139,480 139,480 - 135,152 135,152 - Mutuals Funds 14,755,430 18,421,367 3,665,937 13,984,162 16,253,906 2,269,744

Total Endowments 14,894,910 18,560,847 3,665,937 14,119,314 16,389,058 2,269,744

Total 15,586,178$ 19,348,463$ 3,762,285$ 14,761,757$ 17,090,957$ 2,329,200$

August 31, 2017 August 31, 2016


August 31, 2017 and 2016

10

NOTE B – FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Total mutual funds consist of the following types:

(Level 1) (Level 1)Market Unrealized Market Unrealized

Cost Value Gain/(Loss) Cost Value Gain/(Loss)Mutual Funds Corporate Bond Funds 2,718,084$ 2,759,846$ 41,762$ 2,577,815$ 2,628,612$ 50,797$ Income Funds 1,553,127 1,527,238 (25,889) 1,475,569 1,448,255 (27,314)

Non-US Equity Funds 4,475,407 6,393,685 1,918,278 4,224,834 5,203,384 978,550 US Equity Funds 4,201,228 6,332,950 2,131,722 4,336,764 5,876,217 1,539,453 Alternative Equity Funds 2,279,626 1,951,681 (327,945) 1,836,214 1,595,247 (240,967)

15,227,472$ 18,965,400$ 3,737,928$ 14,451,196$ 16,751,715$ 2,300,519$

August 31, 2017 August 31, 2016

NOTE C –REAL ESTATE

Real estate has been acquired by donation and is recorded at fair value at the date of acquisition. Real estate includes 960 acres in Culberson County. The Foundation has a contract to lease the 960 acres in Culberson County through December 31, 2017. Lease income for the fiscal years ending August 31, 2017 and 2016 were $5,000 and $5,000 respectively. The lessee has an option to purchase the property by January 7, 2018.

NOTE D – MINERAL INTERESTS

Mineral interests in a tract of land in Culberson County, Texas were acquired by donation. Economic benefit of the mineral interest will not be realized unless the water rights or mineral interests are leased or sold. The mineral interest is being carried on the financial statements at $1.

NOTE E – ENDOWMENTS

The Foundation’s endowment consists of approximately 150 individual funds established to provide tuition scholarships or loans to students of Tarleton State University or to provide support to departments of Tarleton State University. As required by generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.


August 31, 2017 and 2016

11

NOTE E – ENDOWMENTS (continued)

The Board of Trustees of the Foundation has continued to require the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the Foundation in a manner consistent with the standard of prudence prescribed by UPMIFA. Losses on investments that are donor-restricted for an endowment fund reduce temporarily restricted net assets up to the amount of any prior net appreciation of the investments and any remaining losses reduce unrestricted net assets. Appropriations of individual endowment funds in excess of temporarily restricted net assets reduce unrestricted net assets. Investment and Spending Policies. Investments shall be made only in mutual funds, stocks, securities, notes, accounts, bonds, real estate or other assets recognized to be readily marketable, and of investment quality, grade and safety. Investments shall be structured to provide for current income as well as growth to provide for both current and future distribution requirements. To the maximum extent possible, distributions shall be made only from net income and not from the corpus (principal) of any endowed funds of the Foundation. The Board of Trustees has determined that appropriations for a given year from endowments shall not exceed 4.2% for the fall 2014 and spring 2015 distribution, 4.1% for the fall 2015 and spring 2016 distribution, 4.0% for the fall 2016 and spring 2017 distribution, and 4.0% for the fall 2017 and spring 2018 distribution of the fair market value of the endowment at the end of the preceding fiscal year. Distributions for the fiscal years ending August 31, 2017 and 2016 were approximately 2.9% and 3.4% of the value of the endowment at the end of the preceding fiscal year, respectively.

Board Designated Endowment. The Board of Directors have created a board designated endowment, the Richard Saunders endowment. Fifty percent of the earnings from the board designated endowment will be used to support the operating budget with any excess of this fifty percent used for other purposes that support the Foundation’s mission and fifty percent will be retained in the endowment.


August 31, 2017 and 2016

12

NOTE E – ENDOWMENTS (continued) Endowment net asset composition as of August 31, 2017 and 2016 is as follows:

Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor - Restricted Endowment Investments -$ 4,368,140$ 11,781,069$ 16,149,209$ Board-Designated Endowment Investments 2,411,638 - - 2,411,638 Total Endowment Investments 2,411,638 4,368,140 11,781,069 18,560,847 Loan Fund Receivable - 12,846 - 12,846 Bequest Receivable - 10,000 10,000 Restricted Cash - - 3,936 3,936

Endowment Net Assets, August 31, 2017 2,411,638 4,380,986 11,795,005 18,587,629 Net assets from sources other than endowments 800,977 290,782 - 1,091,759

Total Net Assets, August 31, 2017 3,212,615$ 4,671,768$ 11,795,005$ 19,679,388$

Temporarily Permanently

Unrestricted Restricted Restricted TotalDonor - Restricted Endowment Investments -$ 3,111,301$ 11,072,237$ 14,183,538$ Board-Designated Endowment Investments 2,205,520 - - 2,205,520 Total Endowment Investments 2,205,520 3,111,301 11,072,237 16,389,058 Loan Fund Receivable - 544,387 - 544,387 Restricted Cash - - 310 310

Endowment Net Assets, August 31, 2016 2,205,520 3,655,688 11,072,547 16,933,755 Net assets from sources other than endowments 727,924 213,490 - 941,414

Total Net Assets, August 31, 2016 2,933,444$ 3,869,178$ 11,072,547$ 17,875,169$


August 31, 2017 and 2016

13

NOTE E – ENDOWMENTS (continued)

Changes in endowment net assets as of August 31, 2017 and 2016 are as follows:

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Endowment Net Assets, beginning of year 2,205,520$ 3,655,688$ 11,072,547$ 16,933,755$ Contributions - - 121,879 121,879 Transferred from unrestricted (37,500) - - (37,500) Transferred from temporarily restricted - - 17,500 17,500 Transferred from University loan fund (530,984) 530,984 - Interest and dividends 37,763 195,452 52,095 285,310 Realized and unrealized gains and (losses) on investments 223,290 1,506,844 - 1,730,134 Amounts appropriated for expenditure (17,435) (446,014) - (463,449)

August 31, 2017 2,411,638$ 4,380,986$ 11,795,005$ 18,587,629$

Temporarily PermanentlyUnrestricted Restricted Restricted Total

Endowment Net Assets, beginning of year 2,127,958$ 3,347,556$ 10,863,952$ 16,339,466$ Contributions - - 156,823 156,823 Transferred from unrestricted (35,900) - - (35,900) Interest and dividends 36,630 184,115 51,772 272,517 Realized and unrealized gains and (losses) on investments 92,783 603,856 - 696,639 Amounts appropriated for expenditure (15,951) (479,839) - (495,790)

August 31, 2016 2,205,520$ 3,655,688$ 11,072,547$ 16,933,755$

The Foundation assesses an administrative fee for the management of each of the endowments. The administrative fee is calculated quarterly and is equal to .75% of the ending value of the endowments. Administrative fees reduce temporarily restricted net assets. Administrative fees for the fiscal years ending August 31, 2017 and 2016 were $132,267 and $118,391 respectively.

NOTE F – SPLIT-INTEREST AGREEMENTS

The Foundation received contributions of stock during 2014, 2015, and 2016 as charitable gift annuities. The Foundation has segregated these assets as separate and distinct funds, independent from other funds and not to be applied to payment of the debts and obligations of the Foundation or any other purpose other than annuity benefits specified in the agreements. In addition, this portfolio of assets meets all requirements concerning permissible investments and mandated reserves required by law. The Foundation agrees to pay a stated return annually to the beneficiaries as long as they live, at which time the remaining assets are available for restricted use of the Foundation.


August 31, 2017 and 2016

14

NOTE F – SPLIT-INTEREST AGREEMENTS (continued) At August 31, 2017 and 2016, the total assets held under split-interest agreements were approximately $184,004 and $171,692, respectively, at fair value. Legally mandated reserves at August 31, 2017 and 2016 were $101,027 and $100,358, respectively. The actuarial present value of the Foundation’s interest in the gift annuities was approximately $101,813 at August 31, 2017 and $114,854 at August 31, 2016 and was calculated using an interest rate of 2.2% and was recorded as a related liability.

NOTE G – RESTRICTIONS ON NET ASSETS

Net assets temporarily restricted for scholarships, student loans and university support were $4,671,768 and $3,869,178 as of August 31, 2017 and 2016 respectively. This includes $4,380,992 and $3,655,693 for expendable endowments.

Permanently restricted net assets consist of endowment fund assets to be held indefinitely. The income from the assets can be used for scholarships, student loans and university support. Many of the endowment fund gift instruments specify that a percentage of the income each year is to be retained for perpetuity. These amounts range from twenty percent to fifty percent. The allocation of income is calculated quarterly.

NOTE H – OPERATING LEASE

The Foundation has negotiated an annual lease with Tarleton State University, for the use of 2 offices, equipment and furniture and fixtures. Rent expense was $7,400 and $7,400 for the fiscal years ending August 31, 2017 and 2016 respectively.

NOTE I - SCHOLARSHIPS At August 31, 2017, the Foundation has approved endowed scholarships of $168,445 for the spring 2018 semester. This amount has not been accrued as a liability in the financial statements because the payment of the scholarships is conditional on the students meeting certain academic requirements and registering for the spring semester.

NOTE J – SUBSEQUENT EVENTS The Foundation has evaluated subsequent events through November 13, 2017, the date which the financial statements were available to be issued.

SUPPLEMENTAL INFORMATION

TARLETON STATE UNIVERSITY FOUNDATION, INC.SCHEDULE OF FUNCTIONAL EXPENSES


2017 2016Expenses

Program servicesEducational Scholarships

Endowed and restricted scholarships 339,234$ 376,449$ Total Education Scholarships 339,234 376,449

University SupportAlumni Association support 3,000 2,500 University Department support 66,858 102,063 Total University Support 69,858 104,563

Total program services 409,092 481,012

Supporting ServicesManagement and General

Travel and meetings - 1,040 Conferences, conventions, and meetings 2,627 3,069 Facility rental 7,400 7,400 Board meeting expenses 1,206 1,547 Investment fees 42,425 38,639 Bank charges 50 40 Administrative fees 132,267 118,391 Accounting and auditing 22,142 19,621 Legal fees 280 - Office supplies 5,225 1,268 Phones 396 360 Postage - 3 Property maintenace 1,875 - Salary 60,588 52,977 Student payroll 666 2,764 Payroll tax 5,083 4,052 Awards, plaques and flowers 978 1,140 Insurance 2,632 2,630 Memberships and subscriptions 500 500 Foundation enhancement 1,350 3,911 Charitable annuity expense (3,784) 10,891 Uncollectible student loans 558 7,550 Depreciation 90 90 Total Management and General 284,554 277,883

Total expenses 693,646$ 758,895$

15

tarleton state university foundation, inc · tarleton state university foundation, inc. august 31,...

Documents