USF FINANCING CORPORATION (A Component Unit of the ...
USF FINANCING CORPORATION (A Component Unit of the University of South Florida)
Financial Statements
June 30, 2019
(With Independent Auditors' Report Thereon)
USF FINANCING CORPORATION (A Component Unit of the University of South Florida)
Table of Contents
Independent Auditors' Report Management's Discussion and Analysis (unaudited) Basic Financial Statements:
Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows Notes to Financial Statements Other Report Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
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KPMG LLP Suite 1700 100 North Tampa Street Tampa, FL 33602-5145
Independent Auditors' Report
The Board of Directors USF Financing Corporation:
Report on the Financial Statements We have audited the accompanying financial statements of the USF Financing Corporation (the Corporation), a component unit of the University of South Florida, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the Corporation's basic financial statements, as listed in the table of contents.
Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with U.S. generally accepted accounting principles; 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.
Auditors' 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 and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 auditors' 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 the Corporation as of June 30, 2019, and the changes in its financial position and its cash flows for the year then ended, in accordance with U.S. generally accepted accounting principles.
KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.
Emphasis of Matter As discussed in Note 3, effective July 1, 2018, the Corporation changed the financial reporting framework used to prepare its financial statements under U.S. generally accepted accounting principles from accounting principles established by the Financial Accounting Standards Board to those established by the Governmental Accounting Standards Board. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information U.S. generally accepted accounting principles require that the management's discussion and analysis on pages 3?10 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 18, 2019 on our consideration of the Corporation's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Corporation's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Corporation's internal control over financial reporting and compliance.
Tampa, Florida October 18, 2019
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USF FINANCING CORPORATION (A Component Unit of the University of South Florida)
Management's Discussion and Analysis
June 30, 2019
(Unaudited)
Management's discussion and analysis (the MD&A) provides an overview of the financial position and activities of the USF Financing Corporation (the Financing Corporation) for the fiscal year ended June 30, 2019 and should be read in conjunction with the financial statements and notes thereto. This overview is required by Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for States and Local Governments, as amended by GASB Statement No. 37. The MD&A, financial statements and notes thereto are the responsibility of the Financing Corporation's management.
Introduction
The Financing Corporation is a Florida not-for-profit corporation organized and operated exclusively to receive, hold, invest, administer property and to make expenditures to or for the benefit of the University of South Florida (the University or USF). The Financing Corporation has been certified by the University Board of Trustees as a "University Direct-Support Organization" as defined in Section 1004.28, Florida Statutes. Pursuant to Florida statutory authority, the Financing Corporation is authorized to enter into agreements to finance, design and construct, lease, lease purchase, purchase, or operate facilities necessary or desirable to serve the needs and purposes of the University. The Financing Corporation was incorporated on February 8, 2005 and began operating on March 10, 2005. The Financing Corporation is managed, its properties controlled, and its affairs governed under the direction of its Board of Directors.
As a result of the Florida Excellence in Higher Education Act of 2018, applicable to all universities within the State University System (SUS) of Florida, the university boards of trustees must approve all appointments to the boards of directors of any university direct support organization (DSO). This change required the Financing Corporation to follow U.S. generally accepted accounting principles as established by the Governmental Accounting Standards Board effective July 1, 2018.
Overview of Financial Statements
Pursuant to GASB Statement No. 34, the Financing Corporation's financial report includes three basic financial statements: the statement of net position; the statement of revenues, expenses, and changes in net position; and the statement of cash flows. The MD&A, financial statements and notes thereto, encompass the Financing Corporation and its blended component unit, the USF Property Corporation (the Property Corporation).
The statement of net position reflects the assets, deferred outflows of resources, liabilities and deferred inflows of the Financing Corporation, using the accrual basis of accounting, and presents the financial position of the Financing Corporation at a specified time. The difference between total assets and deferred outflows of resources less total liabilities and deferred inflows is net position. The net position is an indicator of the Financing Corporation's financial health.
The statement of revenues, expenses, and changes in net position presents the Financing Corporation's revenue and expense activity, categorized as operating and nonoperating. Revenues and expenses are recognized when earned or incurred, regardless of when cash is received or paid.
The statement of cash flows provides information in the form of cash inflows and outflows summarized by operating, capital and related financing activities, and investing activities. This statement will assist in evaluating the Financing Corporation's ability to generate net cash flows and its ability to meet its financial obligations as they come due.
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