UNIVERSITY OF CINCINNATI JUNE 30, 2 008
MANAGEMENT DISCUSSION AND ANALYSISINTRODUCTION
The following discussion and analysis provide an overview of the financial position and activities of the University of
Cincinnati (the “University”) for the year ended June 30, 2008, with selected comparative information for the years
ended June 30, 2007 and 2006. Comments relate only to the University and do not pertain to the University of
Cincinnati Foundation, a component unit of the University. This discussion has been prepared by management and
should be read in conjunction with the financial statements and the notes thereto, which follow this section.
The University was founded in 1819 and was city owned until becoming a state university in 1977. The University is
composed of 16 colleges and operates on three campuses in southwest Ohio. The University has been designated
by the Ohio Board of Regents as one of only two comprehensive graduate public universities in the state. It has an
enrollment of approximately 37,000 students. Faculty total approximately 4,300 with 2,300 having full-time status. In
total, there are more than 15,000 people employed by the University, making it the largest employer in the Cincinnati
region.
The University and its Board of Trustees are declared by statute to be a public body performing essential
governmental functions serving public purposes and an instrumentality of the State of Ohio. The Board of Trustees
comprises nine members appointed by the Governor of Ohio for overlapping terms of nine years.
The University is affiliated with a number of health care, educational, cultural and governmental institutions. Through
such affiliations, the University is able to broaden its curricular offerings.
USING THE FINANCIAL STATEMENTS
The University’s financial report includes three financial statements: the Statement of Net Assets; the Statement of
Revenues, Expenses and Changes in Net Assets; and the Statement of Cash Flows. These financial statements are
prepared in accordance with Governmental Accounting Standards Board (GASB) Statement 35, Basic Financial
Statements—and Management’s Discussion and Analysis—for Public Colleges and Universities, as amended by
GASB Statements 37 and 38. These statements establish standards for external financial reporting for public
colleges and universities and require that financial statements focus on the University as a whole, with resources
classified for accounting and reporting purposes into three net asset categories.
Revenues and expenses are categorized as either operating or non-operating. Significant recurring sources of the
University’s revenues, including state appropriations, gifts and investment income are considered non-operating.
Prior year federal and state grant programs totaling $24 million for fiscal year 2007 have been reclassified from
operating revenue to non-operating revenue on the Statement of Revenues, Expenses and Changes in Net Assets to
conform to the current year presentation. This reclassification was the result of the issuance by GASB of an
implementation guide that clarified that certain non-exchange grants should be reporting as non-operating revenues.
Scholarship allowances applied to student accounts are shown as a reduction of student tuition and fee revenues,
while stipends and other payments made directly to students are presented as scholarship and fellowship expense.
Capital assets, including general infrastructure assets, are shown net of depreciation. However, there is no
requirement to fund the accumulated depreciation. Instead, capital assets are largely funded by state capital
appropriations, issuance of debt, and by major gifts that support the academic, research and student services
missions of the institution. Gifts and capital appropriations are reflected on the financial statements as non operating
revenue and other revenue, respectively. The corresponding annual depreciation expense is reflected as an
operating expense.
Accounts of the University of Cincinnati Foundation have been consolidated in the accompanying financial
statements in a discrete columnar format.