System Financial Resiliency Framework Board of Trustees Finance and - - PowerPoint PPT Presentation

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System Financial Resiliency Framework Board of Trustees Finance and - - PowerPoint PPT Presentation

Jan 30, 2023 327 likes •472 views

System Financial Resiliency Framework Board of Trustees Finance and Facilities Committee January 2015 Minnesota State Colleges and Universities The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.

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The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.

Minnesota State Colleges and Universities

System Financial Resiliency Framework

Board of Trustees Finance and Facilities Committee January 2015

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System Financial Resiliency Framework

  • Stemmed from Board request to evaluate each

college and university’s financial condition and ability to withstand enrollment declines

  • Initial design shared with Board at their

September retreat

  • Design seeks to provide advance awareness of

financial capacity to absorb negative impacts

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System Financial Resiliency Framework

  • Incorporates enrollment and financial

measures

  • Enrollment measures:
  • Volatility
  • Momentum

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System Financial Resiliency Framework

  • Financial measures:
  • CFI
  • Net income/loss
  • Change in unrestricted net assets
  • Cash position

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Design Notes

  • Financial activity composite score:
  • Average of the four financial measures
  • With both balance sheet and income statement measures,

the impacts of short term events evened out

  • Expected to become more meaningful as years of results

are compared

  • Enrollment activity composite score:
  • Average of two enrollment scores
  • Value of measures will be determined over time

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Financial Activity Composite Score

1 2 3 4 5 6 7 8 9 10 1.0-1.9 2-2.4 2.5-2.9 3-3.4 3.5-3.9 4-4.4 4.5-5 Number of Institutions Score

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Enrollment Composite Score

2 4 6 8 10 12 1 1.5 2 2.5 3 3.5 4 4.5 5 Number of Institutions Score

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CFI – Two-Year Average

2 4 6 8 10 12 1 2 3 4 5 Number of Institutions Score

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Net Income/Loss

5 10 15 20 25 30 1 2 3 4 5 Number of Institutions Score

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Change in Unrestricted Net Assets

2 4 6 8 10 12 14 16 1 2 3 4 5 Number of Institutions Score

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Cash Position

5 10 15 20 25 1 2 3 4 5 Number of Institutions Score

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Enrollment - Volatility

5 10 15 20 25 1 2 3 4 5 Number of Institutions Score

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Enrollment - Momentum

2 4 6 8 10 12 14 16 1 2 3 4 5 Number of Institutions Score

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Conclusions

  • Both colleges and universities scored higher on the cash and

UNA measures and lower on the CFI and net income/loss measures

  • Framework identified areas where the system was more

resilient (cash position and net assets) and less resilient (net income/loss)

  • Highlighted areas where more work could be done to support

resiliency (enrollment projections)

  • Improved ability to evaluate financial condition
  • Correlates closely with other measures of financial health the

system monitors

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