RubinBrown Colleges & Universities Stat Book | PUBLIC INSTITUTIONS

CFI Scores RubinBrown reviewed the financial statements of 36 public institutions and calculated the CFI scores. The average CFI score in fiscal years ending in 2017 and 2016 were 2.17 and 1.97, respectively. In the fiscal year ending in 2018, the average CFI score increased to 2.49 as institutions in the State of Illinois received increased state appropriations. A point of interest to note is that Missouri public institutions saw an average CFI score decrease of 0.63 while Illinois public universities saw an average increase of 2.47. The decrease in Missouri’s score is due to continued high pension expenses related to actuarial calculations while state appropriations remained generally stagnant. The State of Illinois’ increase is primarily related to the timing of state appropriations as certain state appropriations related to 2017 were uncertain and were unable to be recorded in 2017 and were therefore recognized once approved and received in 2018. Overall, the scores ranged from -0.81 to 5.84 for FY16, -1.55 to 6.88 for FY17, and -1.62 to 6.02 for FY18.

CFI Score Factors The CFI score is generated through weighting four different ratios in order to evaluate the overall financial health of an institution.

Those factors include the following ratios:

· Primary reserve ratio · Viability ratio · Net operating revenue ratio · Return on net assets ratio

The primary reserve ratio and viability ratio are both inputs for the CFI score that measure the ability of an institution to utilize its expendable net assets to fund operating expenses (primary reserve) and existing plant-related debt (viability). The net operating revenue ratio and return on net assets ratio are more focused on the current year increase/decrease to the unrestricted (net operating revenue) and overall (return Given the volatility in enrollment and in contributions from year to year, institutions should be evaluating how well they can function on their existing expendable assets going forward. The primary reserve ratio seeks to provide an institution with a snapshot of how long it could operate without generating any additional revenue. This allows an institution to see how flexible it might be in expanding into new programs or may indicate how dependent the institution is on future sources of revenues to support or expand its mission. The primary reserve ratio is calculated by dividing expendable net assets by total operating expenses. Expendable net assets exclude property, plant, and equipment net of the related long-term debt. Therefore, it is possible to have negative expendable net assets after excluding property, plant and equipment net of related debt. This can occur sometimes when an institution has permanent restrictions on its net position that exceed its liquid assets. A general target ratio for the primary reserve ratio is 0.4, which provides a school with approximately five months of resources to fund operations without any additional revenue. For FY16 and FY17, the average primary reserve ratio in this analysis was 0.35 for both on net assets) bottom line. Primary Reserve Ratio

CFI Score Distribution by Percent of Insititutions

80%

70%

60%

27.8% 33.3% 44.5%

41.6% 27.8% 13.9%

50%

40%

30%

16.7% 19.4% 19.4%

13.9% 13.9% 19.4%

20%

PERCENT OF INSTITUTIONS (%)

0.0% 5.6% 2.8%

10%

0%

0 to 2

2 to 4

4 to 6

6 to 8

-2 to 0

FY16

FY17

FY18

CFI Score Averages by Type of Institution & State * 2-year 4-year IL IA KS

MO

FY16

2.62 1.97 0.47 3.30 3.58 1.35

FY17

2.95 2.17 1.05 3.63 4.47 0.59

FY18

3.08 2.49 3.52 3.70 3.68 -0.04

2

Public Institutions Executive Summary

* All state averages are for four year institutions for purposes of the statistics in this publication