The institution’s recent financial history demonstrates financial stability.

Compliance Judgment:  In compliance


The strong financial history and leadership of East Carolina University (hereafter, ECU or the university or the institution) demonstrate its financial stability.  The Vice Chancellor for Administration and Finance serves as the chief financial officer for the university.  His qualifications and experience are found in ComprehensiveStandard3.2.8The Condensed Statement of Net Assets and Statement of Revenues, Expenses, and Changes in Net Assets for the past five fiscal years (2007 – 2011) shows sustained growth with consistent increases in assets, revenues, expenses, and net assets.  See also the financial audit reports for the last five years (Financial Audit Report 2011, Financial Audit Report 2010, Financial Audit Report 2009, Financial Audit Report 2008, and Financial Audit Report 2007).  Working capital is the difference between current assets and current liabilities and reflects the university’s short term financial health and overall operating efficiency.  Working capital has steadily increased from $153 million at fiscal year-end 2007 to $193 million at fiscal year-end 2011.  Net assets have increased from $667 million at fiscal year-end 2007 to $861 million at fiscal year-end 2011 or 29%.  ECU has shown sustained growth even during a period of state and national economic downturn.  During the fiscal year 2010, the university took advantage of low interest rates and sold $98 million of University of North Carolina System Pool Revenue bonds and General Revenue bonds to fund increases in the university’s physical infrastructure.  Over the last five years, the university has refinanced various bonds to achieve lower interest rates.

Revenue Sources

Approximately 73% of the university’s total operating and nonoperating revenues comes from state appropriations (noncapital); patient services, net; and student tuition and fees, net.  An additional 11% comes from sales and services, net, and the remaining 16% of revenues is from gifts, contracts and grants, and investment income.   

State Funding

State appropriations (noncapital) comprise the largest component of total ECU’s operating and nonoperating revenues with 35% in 2011.  For financial statement reporting, state funding is considered nonoperating revenues.  State appropriations ranged from $245 million in 2007 to $283 million in 2011.  The steady revenue stream demonstrates the commitment of the North Carolina legislature to provide adequate funding for education.  This commitment was supported, in part, by the receipt of federal recovery funds which is included in these amounts.  In better economic years, the State has provided capital appropriations; $13 million in 2007 and $32 million in 2008.  Capital appropriations have not been received in recent years; however, the State issued debt and distributed revenues to its universities in the form of capital grants.  ECU’s capital grants ranged from $37 million in 2008 to $19 million in 2011 from this sourceAlthough funding has been stable, the university recognizes the economic pressures on the State.  In April 2011, the Chancellor appointed the Program Prioritization Committee (PPC) to gain campus-wide input in determining how to use existing resources in the most efficient manner. 

Patient Services

Financial results for fiscal years 2007 – 2011 reflect significant growth in patient services revenue. In 2011, patient services, net, comprise the second largest component of total operating and nonoperating revenues with 20% in 2011Over the last five years, these revenues have increased by 18%, to reach a level of $153 million in 2011.  This increase is attributable to additional patient visits, a changing patient mix, and improved reimbursement rates.  The revenue growth is evidence of ECU Physicians’ continuing commitment to meet the health care needs of eastern North Carolina.

Tuition and Fees, Net

Tuition and fees revenue, net of scholarship discount, has increased annually from $112 million in 2007 to $138 million in 2011.  This 24% increase is attributable to a 6.8% increase in the student population as well as increases in tuition rates and fees.  The growth in the student population is shown in the ECU Fact Book 2010-2011.  The leveling-off of student growth in the last few years has been purposeful.

Foundations and University Endowment Support

On June 30, 2011 ECU and its foundations had $129 million in endowmentsPolicies governing endowment management are discussed and provided in ComprehensiveStandard3.10.3These policies establish the investment objectives, goals, portfolio guidelines, and rates for spending distributions and fees.  As shown in the Summary of Consolidated Endowment Pools, the annual rate of return has been positive over the last five years except during the years 2008 and 2009 when the entire country experienced an economic downturn and a subsequent decline in the market.  In response to the market recovery in 2010, ECU achieved a 13.75% annual rate of return in 2010 and a 23.2% annual rate of return in 2011.

Annual support from the foundations to the university has averaged $15.5 million over the five year period of 2007 through 2011  ECU finished its current capital campaign, the Second Century Campaign, on December 31, 2011 by surpassing the original $200 million goal by raising nearly $220 million.

Capital Assets and Debt

ECU’s capital assets consist of land, buildings, general infrastructure, equipment, and computer software.  As of June 30, 2011, the university has $775 million in capital assets, net of depreciation, as shown in Note 5 (page 35) of the Financial Audit Report 2011

ECU has Debt Management Guidelines that ensure that the institution maintains its financial stability. The university uses an FTE model and debt service fee to fund student health, student recreation and athletic debt and a business cash flow model to determine net revenues to support housing and dining debt in accordance with its Debt Management Guidelines.  The Statement of Indebtedness lists (by facility) the bonds and certificates of participation as of June 30, 2011, totaling $170 million and shows that there is almost no variable rate debt. All variable rate debt was eliminated in April 2012.  Interest rates on debt are low, ranging from .1% to 5.875% per Note 7B (page 37) of the Financial Audit Report 2011. The Schedule of State Capital Funding shows a recent history of funding and the related projects by the NC General AssemblyOf special note is the approval of debt to support the ECU Dental School, the ECU Coastal Studies Institute, a Family Medicine Building, and the Monk Geriatric Center.  The Schedule of Debt shows a comparison of debt from June 30, 2007, through June 30, 2011.  Revenue bonds significantly increased by $88 million in 2010 when ECU took advantage of low interest rates to fund an athletic field expansion project, an Olympic sport facility, a dining hall, and a dormitory; and to advance refund bonds.  The university monitors its debt for savings opportunities.  In December 2011, ECU sold bonds at a premium above the par amount of $14.9 million and used the proceeds to refund in advance of maturity existing bonds in the amount of $15.6 million.  ECU has an excellent bond rating of Aa2 from Moody’s and AA- from S&P as shown on the 2011 and 2010 bond issues


ECU depreciates capital assets using the straight-line and/or units of output method over the estimated useful lives of the assets, generally 10 to 75 years for general infrastructure, 10 to 100 years for buildings, 2 to 30 years for equipment, and 2 to 30 years for computer software.

Administrative Competencies

ECU has maintained financial stability through its leadership and the administrative competencies of its staff.  Financial Services leaders and staff have an average tenure of 21 years.  This sustained leadership contributes to consistent, strong financial management.  Additional detail is available in ComprehensiveStandard3.10.3.


Reference Title


Bond Rating 2011 issue

Bond Rating 2011 Issue

Bond Rating 2010 issue

bond rating 2010 issue

Comprehensive Standard 3.2.8


Comprehensive Standard 3.10.3


Condensed Statement of Net Assets and Statement of Revenues, Expenses, and Changes in Net Assets

Condensed SNA and SRECNA Comparison 2007-2011

Debt Management Guidelines

ECU Debt Management Guidelines-3-31-11- Approved by BOT April 2011

ECU Fact Book 2010-2011

ECU Fact Book 2010-2011

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

FMV of Endowments Graph

Summary of Consolidated Endowment Pools

Program Prioritization Committee – PPC Website

Program Prioritization Committee - PPC Website

Second Century Campaign Impact

2nd Century Campaign Impact - FINAL

Schedule of Support from the Foundations to East Carolina University

Schedule of Support from the Foundations to ECU

Schedule of Debt (2007 – 2011)

Schedule of Debt

Schedule of State Capital Funding (as of June 30, 2011)

Schedule of State Capital Funding

Statement of Indebtedness
(2007 – 2011)


Summary of Consolidated Endowment Pools (2007 – 2011)

Summary of Consolidated Endowment Pools

Total Operating and Nonoperating  Revenues Chart

Total Revenues Chart