Addendum #6

FINANCE COMMITTEE

BOARD OF TRUSTEES

NORTHERN MICHIGAN UNIVERSITY

Report of meeting held October 9, 2003

CLOSED AGENDA

Mr. Bill Hummell, Fund Evaluation Group, presented the committee with the University’s investment performance for the period ending September, 2003.  The report was for information and no action was taken.

OPEN AGENDA

Mr. Riipi presented three internal audits to the committee.  The audits covered the Art and Design department co-op, the Bookstore inventory, and tuition and grading controls. The committee recommends approval.

Mr. Riipi also presented an external audit performed by Makela, Toutant, Hill, and Nardi.  The audit was for a Michigan Economic Development Corporation grant.  The grant regulations required each grant be audited.  The committee recommends approval.

The committee reviewed the management letter from our external auditors.  There were two recommendations that were made to improve procedures and controls.  The committee recommends approval.

Mr. Leach presented to the committee the Fraud Policy Update proposal.  This was for information only and no action was taken.

Mr. Leach presented to the committee the final copy of the 2002-2003 University Financial Reports.  This was for information only and no action was required.

Mr. Leach presented to the committee the 2004-2005 Operating Budget Request to the State.  The request projects a 2.7% increase in general fund budgeted expenditures on a per fiscal year equated student basis, a 4.2% increase in total expenditures, and an 8.8% increase in our state appropriation.  The committee recommends approval.

Mr. Leach presented to the committee the updated Facilities Five-Year Master Plan and the University’s 2004-2005 Capital Outlay Project Request.  Mr. Leach pointed out that the change in the five-year plan and in the capital request is the Sam M. Cohodas Administrative Center Renovation, which is now the number one priority for capital outlay funding.  The committee recommends approval.

Mr. Leach updated the committee on GASB 39 component unit reporting.  This was for information only and no action was taken.

Mr. Leach discussed with the committee the process for selecting the auditors for fiscal year 2003-04.  The administration will come back with a recommendation on how the University will proceed at the December 2003 meeting.