The institution has a sound financial base and demonstrated financial stability to support the mission of the institution and the scope of its programs and services.

The member institution provides the following financial statements:  (1) an institutional audit (or Standard Review Report issued in accordance with Statements on Standards for Accounting and Review Services issued by the AICPA for those institutions audited as part of a systemwide or statewide audit) and written institutional management letter for the most recent fiscal year prepared by an independent certified public accountant and/or an appropriate governmental auditing agency employing the appropriate audit (or Standard Review Report) guide; (2) a statement of financial position of unrestricted net assets, exclusive of plant assets and plant-related debt, which represents the change in unrestricted net assets attributable to operations for the most recent year; and (3) an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.

Compliance Judgment:  In compliance


East Carolina University (hereafter, ECU or the university or the institution) has a strong financial base and a history of financial stability.  This is demonstrated by audited financial statements; management letters; financial ratio analyses; bond ratings; enrollment growth; continued growth in state appropriations, contracts and grants; fund raising results; and a strong and transparent budgetary process.

ECU’s financial audit report 2011, financial audit report 2010, financial audit report 2009, financial audit report 2008 and financial audit report 2007 performed by the North Carolina Office of the State Auditor are provided herewith along with the auditor’s management letters for fiscal years 2011, 2010, 2009, 2008 and 2007  The financial audit report and the management letter for 2012 will be available for the SACS On-Site Committee. All audits are conducted in accordance with auditing standards generally accepted within the United States of America and the Government Auditing Standards issued by the Comptroller General of the United States.  The State Auditor’s most recent financial audit for the fiscal year that ended June 30, 2011, provides evidence that ECU’s financial base is sound. The SACS 2.11.1 Financial Worksheet Template is also provided.

ECU’s Office of Financial Services performs annual financial ratio analyses to evaluate the university’s financial health.  Operating, leverage, and liquidity ratios are reviewed.  Over time these measures provide indicators of the financial strength of the university and demonstrate ECU’s capacity to sustain its financial status in the future.  These ratios are provided in the Financial Ratio Analysis worksheet.  The ratios demonstrate considerable consistency over the period of analysis.  A critical ratio is the current ratio, defined as current assets divided by current liabilities.  In FY 2011 the current ratio is 4.1; the current ratio is an indicator of the university’s strength in providing more than sufficient current assets to liquidate current obligations.

In May 2010, Moody’s Investors Services recalibrated the university’s credit rating to Aa2, up one level from the previous rating of Aa3, with a stable outlook.  In May 2010, the university received its first rating from Standard and Poor’s of AA-.  These ratings were maintained on the most recent bond rating 2011 issueThe Moody’s Report lists the five broad factors considered in its rating assessment.  These are:

  1. Board and senior management team leadership capability in stable and stressful times
  2. Oversight and disclosure processes that reduce risk and enhance operational effectiveness
  3. Execution of integrated short- and long-term plans to optimize resource utilization
  4. Commitment to self-assessment and benchmarking to promote ongoing improvement
  5. Effective management of Government relations to encourage future support

In June 2012, Moody’s Investors Services affirmed the Aa2 long term rating, with a stable outlook.

The ECU Fact Book for 2010-2011 shows steady, upward enrollment growth since 1909.  In the past ten years, the university’s enrollment has increased by 41%.  Because the university is concentrating on student quality and retention of students rather than just enrollment growth, this growth trend has purposefully moderated in recent years.  As enrollment and expenses have increased, tuition and fees, net of scholarship allowances, have also increased.  The university uses a standard business model to determine tuition and fee rates as discussed in the Budget Process section (following).

With the exception of 2009, the Schedule of State Appropriations for the past ten years indicates an upward trend in allocations.  The Schedule of Grants and Contracts Revenues since 2008 shows steadily increasing grants and contracts revenues.

ECU Foundation

ECU was a winner of the 2010 Council for Advancement and Support of Education (CASE) WealthEngine Award for Educational Fundraising and was named to the Circle of Excellence in the categories of Overall Improvement in Fundraising and Sustained Excellence for FundraisingThe university initiated the Second Century Campaign in May of 2004, with the public phase of the campaign starting in 2008.  Surpassing its original $200 million goal, the campaign concluded in December 2011 with nearly $220 million raised.  The campaign priorities, aligned to the ECU Mission and the institution’s strategic directions, included: funding for capital needs, faculty support and research, student scholarships and projects, and annual giving and other strategic initiatives in support of each of the university’s colleges, schools, departments, athletic scholarships and programs, institutes and centers.   Future goals to maintain financial stability include an increase in giving by foundation board members and faculty and staff, an increase in emphasis on soliciting and cultivating planned gifts, an increase in the number of major donor prospects, and an increase in the alumni participation rate in planned activities.

Statement of Unrestricted Net Assets Exclusive of Plant and Plant-Related Debt for FY 2007-2011

The Statement of Unrestricted Net Assets Exclusive of Plant and Plant-Related Debt for FY 2007-2011 displays the day-to-day operations of ECU exclusive of plant assets and plant-related debt.  The university’s unrestricted net assets exclusive of plant and plant-related debt have increased 41.6% since 2007.  An updated statement through FY 2012 will be available as a Focus Report for the SACS On-Site Committee.

Budget Process

As one of 17 constituent institutions of the University of North Carolina (hereafter, UNC), ECU follows the guidelines of the University of North Carolina Budget Process as detailed in the University of North Carolina Budget Development Process.  The biennial North Carolina budget process includes the budget request for continued operations (Continuation Budget) and the expansion of current operations including capital improvement, new programs and salary increases for faculty and senior administrators (Expansion Budget).  Salary increases for other employees are determined by the North Carolina General Assembly.

Capital budget requests are further divided into three categories:  state appropriated capital improvements, repairs and renovations, and non-appropriated capital improvements (self-liquidating projects which are paid from other revenue streams).  These requests are made based on a six-year campus plan.  The UNC-General Administration (UNC-GA) spreads the funding requests for each state-appropriated project over three years and usually requests one state-appropriated project per campus per year.

For the expansion budget process, each campus submits its highest priorities to the UNC-GA.  Priorities are determined through a collaborative process conducted by the UNC President, individual institutional Chancellors, and the General Administration staff.  The UNC Board of Governors (hereafter, BOG) comprehensive budget request is presented to the Governor through the Office of State Budget and Management and is incorporated into the Governor’s budget as presented to the General Assembly.  After approval by the General Assembly, the BOG approves the allocation of the final budget. For information on the current biennial funding cycle see Appendix I for Current Operations and Appendix J for Capital Improvements in the UNC Board of Governors' Meeting, August 12, 2011.  See also the 2011-2012 and 2012-13 Certified Budget (Code 16065 and Code 16066).

Preparation of the Budget: In accordance with the ECU budget planning process, ECU’s major divisions conduct annual budget meetings for the purpose of preparing unified budget requests to the Chancellor.  All budgetary changes are aligned with the university’s strategic action plan. The Chancellor’s Executive Council reviews requests from divisions for funding from each of ECU’s divisions and approves allocations

Tuition and Fees:  The institution follows a schedule of tasks to evaluate and propose tuition and fee amounts.  ECU uses a Campus Tuition and Fee Committee to review the proposed amount and ensures student representation within the decision-making process regarding the schedule for tuition and feesThe Tuition and Fee Committee’s recommendation is reviewed and approved by the Chancellor’s Executive Council, Chancellor, and Board of Trustees; and ultimately by the UNC BOG(See authorization of tuition for 2012-13 and authorization of fees for 2012-13 – both approved by the Board of Governors on February 10, 2012.)

ECU Physicians (ECUP)Within the Health Sciences Division there is a special budgeting process for ECU Physicians, the clinical practice plan of ECU’s Brody School of Medicine.  With more than 365 credentialed faculty representing 11 clinical departments, the practice plan generated more than $180 million in clinical revenue in FY 10-11.  The ECU Physicians Board of Directors (January 13, 2011 Minutes) provides guidance to the ECUP Finance Committee for budget preparation, monitoring ongoing financial performance, and reviewing business development proposals.  The ECUP Finance Committee considers budget requests made by department chairs and administrators in conjunction with ECUP’s executive director and chief financial officer and consolidates the requests into one practice plan consolidated budget.  The budget is reviewed and approved (e.g. ECU Physicians Board of Directors - June 9, 2011) by the ECU Physicians Board, of which the Dean of the Medical School, the Vice Chancellor for Health Sciences, and the Vice Chancellor for Administration and Finance are members.  Should a budget be approved by a majority vote of the board but with which vote the dean or the respective vice chancellors disagree, any or all of these officials have the opportunity to reject the proposed budget and to send it back to the ECU Physicians Board for refinement.

Athletics:  Decisions relating to athletics operating budgets are made within the framework of the overall annual budgeting process at the university. Both the Director of Athletics Business and the Executive Associate Director of Athletics work with athletic department budgetary authorities to create the annual athletic operating budget. This process typically begins in February with a goal of completing the budget process by the end of May. The budget document (e.g. Athletic Department Operating Budget 2011-12) is uploaded into the university’s financial system and hard copies are submitted to the Vice Chancellor for Administration and Finance and to the Chancellor.

Therefore, ECU’s mission and broad scope of programs and services are supported by the institution’s sound and stable financial base.


Reference Title


2.11.1 Financial Worksheet Template

2 11.1 Financial Worksheet Template

Appendix I for Current Operations

Appendix I  2011-2012 Allocations - Current Operations - see August 12, 2011 minutes

Appendix J for Capital Improvements

Appendix J  2011-2012 Allocations - Capital Improvements - see August 12, 2011 minutes

Athletic Department Operating Budget 2011-12

Final Athletic Operating Budget 2011-2012

Auditor’s Management Letter for 2007

Audit Management Letter YE June 30, 2007

Auditor’s Management Letter for 2008

Audit Management Letter YE June 30, 2008

Auditor’s Management Letter for 2009

Audit Management Letter YE June 30, 2009

Auditor’s Management Letter for 2010

Audit Management Letter YE June 30, 20010

Auditor’s Management Letter 2011

Audit Management Letter YE June 30, 20011

Authorization of Fees for 2012-13

2012-13 Approved Fees by Board of Governors - Feb 10, 2012

Authorization of Tuition for 2012-13

2012-13 Approved Tuition by Board of Governors - Feb 10, 2012

Bond Rating 2011 Issue

Bond Rating 2011 Issue

Board of Trustees

ECU Board of Trustees Minutes Dec 2, 2011

Code 16065 (main campus)

BD307 - 16065 - FY 2011-12 Certification

Code 16066 (Health Sciences)

BD307 - 16066 - FY 2011-12 Certification

Consolidated Budget

Consolidated ECU Physicians Budget FY 2011-12

ECU Budget Planning Process

ECU Budget Planning Process

ECU Fact Book for 2011-2012


ECU Physicians Board of Directors ­­ (January 13, 2011 Minutes)


ECU Physicians Board of Directors Minutes 2011-2012

ECU Physicians Board of Directors – June 9, 2011

2.11.1 ECU Physicians Budget Approval June 9, 2011 Minutes

Financial Audit Report 2007

ECU Financial Audit Report 2007

Financial Audit Report 2008

ECU Financial Audit Report 2008

Financial Audit Report 2009

ECU Financial Audit Report 2009

Financial Audit Report 2010

ECU Financial Audit Report 2010

Financial Audit Report 2011

ECU Financial Audit Report 2011

Financial Ratio Analysis

Financial Ratio Analysis

June 2012, Moody’s Investors Services

Moody's-Affirms East Carolina University's Aa2, Outlook Stable 6_05_12

Moody’s Report

Moody's Report

Overall Improvement in Fundraising

FY2010 CASE Award - Wealth Engine for Overall Improvement in Fundraising

Requests from Divisions for Funding

Executive Council Approval of Requests from Divisions for Funding

Schedule for Tuition and Fees

Tuition and Fee Schedule

Schedule of Grants and Contracts Revenues

Schedule of Grants and Contracts Revenues

Schedule of State Appropriations

Schedule of Appropriations

Schedule of Tasks

Schedule of Tasks for Tuition and Fees (2012-2013)

Second Century Campaign

Executive Summary of Fund Raising

Statement of Unrestricted Net Assets Exclusive of Plant and Plant-Related Debt for FY 2007-2011

Statement of Unrestricted Net Assets Exclusive of Plant and Plant-Related Debt

Strategic Action Plan


Sustained Excellence in Fundraising

FY2010 CASE Award - Weath Engine for Sustained Excellence

University of North Carolina Budget Development Process

UNC Budget Development Process 2-2011

UNC Board of Governors’ Meeting, August 12, 2011

UNC Board of Governors Minutes August 12, 2011

University of North Carolina Budget Process