Addendum #5

FINANCE COMMITTEE

BOARD OF TRUSTEES

NORTHERN MICHIGAN UNIVERSITY

Report of meeting held May 5, 2005

CLOSED AGENDA

Because of a family emergency a representative from FEG was unable to join the committee.  The investment performance reports for the period ending in March 31, 2005 were presented.  The performance for the quarter was comparable to the benchmarks for the various funds.  The reports were for information.

The preliminary draft audit findings and recommendations from the Office of the Auditor General were discussed.  The University will now respond to the findings and recommendations.  The Office of the Auditor General will then release their findings and recommendations and the University’s response to the public.  At this point the report was for information.

OPEN AGENDA

The committee reviewed and approved the Internal Audit Plan for the coming year.  Mr. Riipi presented three internal audits and three Michigan Economic Development Corporation audits.  The committee approved closing the audits.  The committee asked the administration to review the staffing level of the University’s audit function and to report back to the committee.

Mr. Riipi presented the findings from the U.S. Department of Education’s audit of the Federal Title IV financial aid administered by Northern for fiscal years 2001-02 and 2002-03. The University has taken steps to change policies and procedures to address the deficiencies identified by the Department of Education.  The committee approved the closing of the audit.

Mr. Leach updated the committee on the status of the University’s 2004-05 General Fund budget.  Because of the uncertainty of the level of state appropriation for fiscal year 2005-06, the administration is recommending continuation budgets for the General and Designated Funds.  The committee supports these recommendations which are included in the formals.

Mr. Wasilewski, Associate Vice President, and Mr. Carl Holm, Director of Housing and Residence Life, presented the Auxiliary Operations and Student Life Budget recommendations which are in the formals.  Mr. Holm presented the Dining Services and Housing and Residence Life Rate Schedule for 2005-2006.  The recommended rates are projected to keep Northern ranked at ninth out of twelve.  The committee supports approval of these recommendations which are included in the formals.

Ms. Haavisto updated the committee on the recent bond issue.  During the staff’s discussions with bond rating agencies they identified as good management practice having interest rate swap management guidelines.  Included in the formals are recommended guidelines.  The committee supports approval of the recommended guidelines.

The committee has a special action item that requires a vote of the Board.  The Vice President for Finance and Administration is authorized to sign contracts for the University.  Under certain circumstances it may be appropriate to delegate this authority, but requires approval of the Board.  The committee recommends the Vice President for Finance and Administration be authorized to delegate contract signing authority to the Dean of Academic Information Services for contracts that pertain to library acquisitions and software licenses that are funded from the Academic Information Services budget.

Because of time constraints the capital outlay agenda item was postponed to a future meeting.