1. The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator. Financial Health Indicator / Measurement Project Chief Finance and Facilities Officers Conference January 27, 2010

2. Slide 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. Slide 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. Slide 4 Monthly cash flow example July Proj July Act Diff Aug Proj Aug Act Diff Sept Proj Jan Proj June Proj TOTAL Beginning Cash Balance 422,221 - 299,615 318,659 (19,044) 232,060 232,284 240,689 Additions State Appropriation 51,181 - - 614,172 Tuition & Fees (including 3rd party) 27,890 - 108,982 108,828 154 155,000 230,000 27,500 764,372 All Other Revenues 5,000 - 3,648 1,352 5,000 60,000 ARRA Revenue - 1,000 2,000 1,000 12,000 Deductions Salaries & Benefits (121,273) - (76,342) (90,909) 14,567 (91,000) (1,153,115) All Other Expenses (35,404) - (27,376) (23,037) (4,339) (32,500) (387,780) Loans to MMB - (150,000) - - - Unallotment error (50,000) 20,000 50,000 150,000 170,000 Ending Cash Balance 299,615 - 232,060 368,370 136,310 371,741 395,965 351,870

5. Slide 5 Measures: long-term  Accrual net operating revenue negative for 2 consecutive years.  Accrual primary reserve level 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. Slide 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.