Budget and Finance

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INDEPENDENT AUDITORS’ REPORT
To the Board of Trustees of
the University of Cincinnati:
We have audited the accompanying statements of net assets of the University of Cincinnati (“University”), a
component unit of the State of Ohio, as of June 30, 2008 and 2007, and the related statements of revenues,
expenses and changes in net assets and of cash flows for the years then ended. These financial statements are
the responsibility of the University’s management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the financial statements of the University of
Cincinnati Foundation, a discretely presented component unit. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included
for the University of Cincinnati Foundation, is based solely on the report of such other auditors.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards issued
by the Comptroller General of the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the University’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits and
the reports of other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the financial statements referred to
above present fairly, in all material respects, the financial position of the University as of June 30, 2008 and
2007, and the results of its operations and its cash flows, as applicable, for the years then ended in conformity
with accounting principles generally accepted in the United States of America.
As discussed in Note 1C to the financial statements, the financial statements include investments valued at
$416 million (22% of net assets) and $437 million (22% of net assets) as of June 30, 2008 and 2007,
respectively, whose fair values have been estimated by management in the absence of readily determinable
fair values. Management's estimates are based on information provided by the fund managers or the general
partners.
As discussed in Note 12 to the financial statements, the University has a 29.12% equity interest in the Health
Alliance of Greater Cincinnati (the “Alliance”) as a participating entity and has included such $389,446,000
equity investment in other long-term investments as of June 30, 2008 in the Statement of Net Assets. During