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3.10 Financial Resources

Comprehensive Standard:

3.10.1 The institution's recent financial history demonstrates financial stability. (Financial stability)

Statement of Compliance:   In Compliance.


The financial stability of the University of West Georgia (UWG) over the past five years is graphically depicted below.  The graph shows a strong and stable pattern of growth.  Annual increases demonstrate financial stability and allow for effective allocation of resources to the University’s strategic plan.  UWG has managed changes in tuition revenues, state appropriations, and debt by focusing on conservative budgeting, high quality financial planning, and focusing funding on core competencies as contained within the strategic plan [1].

 Selected Asset and Revenue Data

The growth in financial resources is largely driven by increases in student enrollment, increases in tuition and fees mandated by the University System of Georgia, and a strong capital building program.

Fiscal Year





























The University increased its enrollment from 8,942 Full Time Equivalents (FTE) in Fall of 2006 (FY2007) to 10,639 FTE in Fall of 2012 (FY2013) [2] (UWG Fact Book, p.35). This increase has provided a solid financial base for operational activities.  This growth coupled with the strong financial performance displayed in our schedule of unrestricted net assets, exclusive of plant assets and related debt, for the previous five years is an additional indicator that UWG is financially stable. This schedule of unrestricted net assets, exclusive of plant assets and related debt, shows a growth of 233% from $11,022,725 to $36,737,344.  Other indicators of financial strength over this five-year period are a growth in UWG’s current assets by 76%, an improvement in current ratio from 1.75 to 3.46, and a growth in year-end cash balance from $25,278,039 to 44,340,939.  These trends demonstrate that the university is "living within its means" and this performance is sustainable.  While the budget and planning process was adversely affected by the State of Georgia budget crisis, tuition and fee increases mandated by the University System of Georgia have largely offset state funding shortfalls.  Additionally, the institution has been very proactive in planning for, and reacting to, potential changes in state, federal, and tuition funding.  For this reason, UWG has actively worked to increase Cash Balances and the level of Unrestricted Net Assets [3].

UWG Budget and Finance Overview

The heart of the UWG Budget and Finance is a commitment to openness, combined with a conservative budgeting approach.  The University has adhered to a conservative approach in budgeting revenues and expenditures demonstrated by the increases in Unrestricted Net Assets.  All Financial Statements and Reports follow Generally Accepted Accounting Principles as mandated by the Government Accounting Standards Board and the University System of Georgia Business Policies Manual [4].

As part of the sound fiscal procedures, UWG follows an "open book policy" that seeks to make virtually all budget information available to internal and external users.  Via the Controller’s website [5], anyone can review the Annual Financial Reports from the Fiscal Year 2005 to present day.  Similarly, compensation data is available to the public at the Georgia Department of Audits website [6].  Twice annually, University Department Heads are required to send to the Office of the Controller verification that funds for which they have responsibility have been reconciled.   University Financial Statements are reviewed monthly with the Vice President for Business and Finance monitoring the overall financial activities of university.

UWG maintains conservatism when depreciating capital assets.  Capital assets are recorded at cost at the date of acquisition, or fair market value at the date of donation in the case of gifts. For equipment, the University's capitalization policy includes all items with a unit cost of $5,000 or more, and an estimated useful life of greater than one year.  Renovations to buildings, infrastructure, and land improvements that exceed $100,000 and/or significantly increase the value or extend the useful life of the structure are capitalized. Routine repairs and maintenance are charged to operating expense in the year in which the expense was incurred. Depreciation, which also includes amortization of intangible assets such as water, timber, and mineral rights, easements, patents, trademarks, and copyrights, as well as software is computed using the straight-line method over the estimated useful lives of the assets, generally 40 to 60 years for buildings, 20 to 25 years for infrastructure and land improvements, 10 years for library books, and 3 to 20 years for equipment. Residual values will generally be 10% of historical costs for infrastructure, buildings and building improvements, and facilities and other improvements. 

Similarly, the three University Foundations are prudent with spending of the UWG’s endowment.  The University of West Georgia Foundation, Inc. is a Georgia charitable corporation, and has been recognized as an organization exempt from Federal Income Tax under section 501(c)(3) of the Internal Revenue Code, and gifts to the Foundation are deductible as provided for in section 170 of the Internal Revenue Code [7], [8], [9]. The Foundation encourages both restricted (specific purpose) and unrestricted (general use) gifts from donors.  Distributions by the University of West Georgia Foundation, Inc. are made in accordance with federal law, with distributions up to 5% annually.  For restricted assets, this 5% distribution is subject to an "out of corpus" rule, that does not allow distributions if the principal would fall below the original donation. During the economic turmoil of 2007-present, distributions were reduced or eliminated on many restricted scholarships and endowments.  Following are the returns for the past five years on the UWG Foundation and the separately managed Waring Portfolio. 

Endowment Returns

As with many institutions and charitable organizations, the University of West Georgia Foundation saw a decline in donations during the financial turmoil of 2008-2009.  Donations levels appear to have stabilized, and UWG expects that donations will return to past levels.

Total Gifts

The UWG Real Estate Foundation [7], [8], [12] is a pass-through entity used to finance the Campus Center and Athletic Complex, as well as, the Athletic Office Building, Center Pointe Suites and opening in the fall of 2013, The Oaks.  This Foundation is prudently funded via rent paid from student fees, in accordance with the debt covenants used to finance the above named facilities.  

The UWG Athletic Foundation [13], ^[14=952] is a Georgia charitable corporation, and has filed for exemption for Federal Income Tax under section 501(c)(3) of the Internal Revenue Code.  A memorandum of understanding (MOU) currently exists that allows the UWG Athletic Foundation temporary use of the UWG Foundation’s tax exempt status ^[15=953]. The UWG Athletic Foundation’s primary objective is to support a preeminent intercollegiate athletics program by providing student athletes the opportunity to achieve excellence in academics, community service, and athletic competition. 

Unrestricted Net Assets

The University has been fortunate to receive strong support for its Capital Spending Plan support future growth anticipated in the Strategic Plan [1]. During this period of historically low interest rate, the Capital Spending has largely been financed via non-current liabilities such as long-term debt and capital leases.  Associated with the increase in long-term debt, the University has also increased cash and unrestricted net assets in order to maintain financial flexibility.

Selected Unrestricted New Assets and Liability data

Provided interest rates remain low, enrollments continue to increase, and UWG planning processes suggest that continued investment is prudent; UWG will remain committed to a robust Capital Spending Plan.

Supporting Documentation: