Public University Analysis

Public University Analysis

Introduction

The public universities in United States of America are termed as state universities and they are funded by the government. The University financial accounts, audit reports and the change occurred in their accounting reporting after adoption of GASB is the University of California. The university is one of the leading universities of America and is able to manage its financial resources effectively and efficiently. Since 2008 the financial crisis in America have affected each part of the country and similarly the funds provided to manage the university were also affected but the finance department at University of California are able to respond to these crisis positively. The financial statements and audited report will help in analyzing the pension plan disclosures, different grants provided by the university, limitations of fund as a result of adopting GASB and on the basis of the financial statements it will analyze the future economic growth and success of the University.

Discussion

The University of California is one of the largest and reputable universities of America that providing excellent teaching, research, healthcare facilities and public services to the people. Since 2009 the university's educational and financial position has also improved as its assets increased from $ 42, 105 to $ 49,813 in 2011, but the increase in liabilities is also at the same rate. Thus the net effect in increase is minimal but still the financial position or performance of the University is satisfactory. The financial managers in the university have utilized their finances by investing in areas where they can get better returns and the estimated risk is low. Over the years the returns from the investments have increased which has improved the liquidity position of the organization.

GASB or the Governmental Accounting Standard Board is an independent organization that has been formed in order to keep a check on the state or local government organizations by setting up standards, accounting methods and financial reporting procedures in order to ensure that there is no illegal activity in these institutions. It has been ensured that all the state universities need to follow this accounting standards so that they are able to assure that all the information presented and recorded is accurate and transparent. The University of California has a financial responsibility that it needs to pay the pension from their retirement benefits plan and also they have to provide health benefits to the retiree. In order to pay the pension and health benefits from the retiree benefits plan the university has made a reimbursement payment method. The University of California also provides the retirees benefit plan to the contractual retirees and for them a DOE payment method is followed by the university.

Prior to 2009 the University of California had no financial obligations of providing the pension funds but after 2009 the pension plan was introduced. The pension plan in the year 2011 had a contribution of $1.9 billion out of which 23.3 percent was covered compensation. The university made the pension plan effective since 2010 ...