Section 2:
Core Requirements
2.1 2.2 2.3
2.4 2.5 2.6
2.7.1 2.7.2 2.7.3
2.7.4 2.8 2.9
2.10 2.11 2.12
Section 3:
Comprehensive Standards
3.1.1 3.2.1  
3.2.2.1 3.2.2.2 3.2.2.3
3.2.2.4 3.2.3 3.2.4
3.2.5 3.2.6 3.2.7
3.2.8 3.2.9 3.2.10
3.2.11 3.2.12 3.2.13
3.2.14 3.3.1 3.4.1
3.4.2 3.4.3 3.4.4
3.4.5 3.4.6 3.4.7
3.4.8 3.4.9 3.4.10
3.4.11 3.4.12 3.4.13
3.4.14 3.5.1 3.5.2
3.6.1 3.6.2 3.6.3
3.7.1 3.7.2 3.7.3
3.7.4 3.7.5 3.8.1
3.8.2 3.8.3 3.9.1
3.9.2 3.9.3 3.10.1
3.10.2 3.10.3 3.10.4
3.10.5 3.10.6 3.10.7
Section 4:
Federal Requirements
4.1 4.2 4.3
4.4 4.5 4.6
4.7 4.8

 

 

 
McNeese State University
Compliance Plan for Reaffirmation
 
 

Section 3.10.1: Financial and Physical Resources

Judgment of Compliance

checked.png Compliance
unchecked.png Partial Compliance
unchecked.png Non-compliance

Requirement

Narrative

McNeese State University is in compliance with Comprehensive Standard 3.10.1.

McNeese State University recognizes that financial stability is an essential component of the institution’s ability to fulfill its mission of providing education and promoting research and service. The University’s ULS Strategic Plan and the Action Accomplish Achieve 2010 Strategic Plan provide a framework by which to continue and improve the University’s financial and student stability. The University’s recent financial history demonstrates financial stability.

Annual Financial Report

The University prepares its financial statements in accordance with accounting principles established by the Governmental Accounting Standards Board. The Governmental Accounting Standards Board (GASB) defines the accounting principles generally accepted in the United States of America and the reporting standards for state and local governments. These principles are found in the Codification of Governmental Accounting and Financial Reporting Standards published by the GASB.

McNeese State University’s financial statements demonstrate financial stability. The Management’s Discussion and Analysis (MD&A), which is included with the financial statements, provides a narrative overview, analysis, and additional insight into the institution’s financial activities.

Operating Budget

As described in Core Requirement 2.11, McNeese State University is required to submit and adhere to a balanced budget. The budget is submitted to the University of Louisiana System and the Board of Regents during the month of August of each year. The budgetary submittal process is standardized by the University of Louisiana System and Board of Regents. Standard forms are required by the University of Louisiana System and Board of Regents. The established procedures and budget forms provide consistency among Louisiana universities when submitting their budgets. Universities are required to balance estimated revenues and budgeted expenditures, and, in accordance with Louisiana Revised Statute 39:77, may not incur a budget deficit. Deficits in any fiscal year constitute reasonable cause for removal from office of any appointed individual, including the University Presidents. This process ensures financial stability.

Management Staff

Stability in management is a significant indicator of an environment of institutional and fiscal stability. The University President, who functions as the Chief Executive Officer of the University, has been in his position at McNeese State University for more than nineteen years. His longevity as President is a testament to his exemplary management capabilities.

The University’s fiscal management personnel are experienced in fiscal management, accounting and financial reporting, auditing, and budgeting. Their experience and training ensure that the University’s financial stability is managed and sustained effectively and efficiently. The following table identifies the fiscal management personnel and their years of service:

Name
 Job Title Years of Service
Eddie Meche Vice President of Business Affairs 24
Mona White Comptroller 23
Michelle Erickson Asst. Comptroller 10
Georgina Heuring Budget Officer 21
Pamela Watkins Director of Purchasing 19
Victoria Roach Internal Auditor 11

Enrollment Statistics

The University recognizes that its greatest resource lies in its students and their commitment to the University. Since Summer 2001, enrollment at the University has risen. The University has enjoyed fourteen semesters of increased headcount enrollment since that time. This enrollment growth has continued through the implementation of two tiers of selective admissions standards, the first in fall 2001 and the second in fall 2005.

Projections indicate that the number of high school graduates in Louisiana will decline through 2012. An effort is being made by the University to offset the expected decline in the available pool of high school graduates. The following strategies have been devised to offset an anticipated decline in enrollment:

    • The University has implemented an aggressive marketing/image campaign in throughout Southwest Louisiana.

    • The University has increased recruitment efforts in Texas.

    • In anticipation of the Fall 2005 admissions standards implementation, the Board of Regents contracted with Noel-Levitz Consulting to provide marketing, recruitment, and retention services to Louisiana public institutions. Implementation of the plan continues.

    • A Director of Academic Advising and Retention has been hired to reinforce and

    • implement retention measures recommended by Noel-Levitz.

    • The University has increased scholarship funding as an indicator of the University’s commitment to enrolling a more qualified student population.

    • The University is currently developing plans to increase the community/junior college recruitment. A local technical institute, with whom the University has a good working relationship, is in the process of applying for SACS initial accreditation.

Bond Rating

Bond ratings provide another evaluation of the institution’s financial stability. Bond ratings are based in part on financial ratios. Other considerations include such factors such as the institution’s market position, total resources, diversified revenue, reliable management, debt service coverage, and student demand. Following Hurricanes Katrina and Rita and the uncertainty of the State of Louisiana’s financial situation, Moody’s Investor’s Service placed McNeese State University on a watch list for potential downgrade for its $21,700,000 bond issue.

On February 21, 2006, however, Moody’s issued a bond rating update report. Although the report indicated a negative outlook because of uncertainty, more importantly, it removed the University from a watch list and confirmed the University’s pre-hurricane bond rating of Baa1.

Hurricane Rita Impact

On August 29, 2005, Hurricane Katrina, a strong Category 3 hurricane, struck the New Orleans, Louisiana, area. The flood caused by the weakened levees surrounding the city devastated the New Orleans area and wrought havoc on Louisiana state funding. Governor Kathleen Blanco issued an executive order freezing all state spending for items other than emergency expenditures.

On September 24, 2005, Hurricane Rita, a strong Category 4 hurricane, struck the Southwest Louisiana/Southeast Texas area severely damaging McNeese State University’s facilities. After five weeks of remediation and repairs, the University was able to reopen on October 27 and complete the fall semester.

The uncertainty of the entire State of Louisiana’s financial condition prompted the State of Louisiana to impose budget cuts in state appropriations for State agencies, including colleges/universities. McNeese State University’s share of the cuts amounted to three percent of the University’s appropriation.

In addition to the reduction in State appropriations, McNeese State University was affected by student resignations and, consequently, experienced lost tuition revenues during the Fall 2005 semester. In the Spring 2006 semester, the University experience reduced enrollment. To address these revenue losses, the University imposed spending moratoria on its departments and balanced its budget by the end of the fiscal year.

During the fiscal year ending June 30, 2006, McNeese State University received assistance from FEMA, State Facilities Planning and Control, the Office of Risk Management (insurance), Bush-Clinton Katrina Fund ($1,500,000), and other private and federal funding to assist in repairing facilities, replacing equipment, and restoring the campus.

Assistance to McNeese State University will continue during the fiscal year ending June 30, 2007. The list below identifies some of the funding sources that will assist the University in recovering from the effects of Hurricane Rita and maintaining its fiscal stability:

    • In the 2007 appropriation, the State of Louisiana has restored seventy-five percent of the budget cut imposed during the fiscal year ending June 30, 2006.

    • The University has contracted with the Board of Regents to receive $2,600,000 of U.S. Department of Education Emergency funds. These funds will be used to pay certain faculty salaries and to acquire needed equipment and instruments.

    • The University will receive $1,134,000 in FEMA assistance to replace damaged equipment and instruments.

    • The State of Louisiana has funded an average of five percent pay increase to University faculty.

    • The Board of Regents will provide $12,000,000 in funding to universities that have experienced enrollment declines as a result of Hurricanes Katrina and Rita. This assistance will be based upon fourteenth-day enrollment.

Supporting Evidence

Board of Regents Endowment Program

Annual financial report for the year ended June 30, 2005

Budget summary - 2007

Louisiana Revised Statute 39:11

Recent enrollment history

Moodys Investors service rating update report

FEMA allocation for equipment replacement

USDOE emergency assistance 2.6 million

Bush Clinton Katrina Fund Award