In Weeks 4, 8, and 12 of this course, you will work on a course project related

Question

In Weeks 4, 8, and 12 of this course, you will work on a course project related to understanding the accounting practices of non-profit educational institutions.

Using your research from this week’s Learning Activity, prepare a document that answers the following questions:

What is the purpose of a professional association such as the National Association of College and University Business Officers?

What type of information is provided about college and university accounting?

Based on what you were able to learn from exploring the site, discuss two unique accounting issues facing colleges and universities.

For citation guidelines, please refer to the table in the APA Style section of the syllabus.

Since the course project is requiring you to do research, I would like to expand on the expectations of the first ‘technical’ area from the rubric above.

Students must follow APA Style guidelines and must include the following standardized elements:

·         Title page

·         Main body

·         In-text citations for paraphrased and quoted material

·         References page

·         Minimum number of credible, academic sources

·         Running head

·         Page numbers

·         Double spaced on standard sized paper (8.5” x 11”)

·         1” margins

·         12 pt. Times New Roman

·         Indent each new paragraph (tab ½” or 5 spaces)

Each of these elements should comply with guidelines presented in the APA Style 6th Edition Manual.

Also, research papers must include an Abstract. Thus, I would expect your paper to be at least 4 pages long (title page, abstract page, body of paper, reference page).

Explanation / Answer

Q.What is the purpose of a professional association such as the National Association of College and University Business Officers?

Ans.The National Association of College and University Business Officers (NACUBO) is a membership organisation representing more than 2500 colleges, universities and higher education service provider across the country and around the world.

NACUBO specifically represents chief business and financial officers through advocacy efforts, community service and professional development activities. The association's mission is to advance the economic viability and business practices of higher education institutions in fulfillment of their academic missions.

NACUBO membership is instituionally based and runs from June 1 through May 31 of the next year. staff members of a member institution are eligible to receive benefits, including dicounted product & services. student and retired business officers may purchase an individual memberships

Q.What type of information is provided about college and university accounting?

Ans.

Although similar to the government model used by state and local governments, the present-day College Model of financial reporting is unique to the higher-education industry. The generally accepted accounting principles (GAAP) that prescribe the statements for the College Model are provided in the Financial Accounting and Reporting Manual for Higher Education published by the National Association of College and University Business Officers (NACUBO) 1990. The final form of the College Model was determined in 1974 and published in NACUBO’s third edition of College and University Business Administration 1974. Until future authoritative pronouncements of the FASB and the GASB generate new reporting models, the 1990 Manual and the 1974 CUBA Manual will continue to provide the higher-education industry with generally accepted accounting principles.

In a manner that will be used for each major reporting model reviewed in this paper, Figure 1 provides an abbreviated illustration of the 1974 College Model and shows the format of each statement required by higher-education GAAP, including report titles, column headings, and major row headings.

Q.Based on what you were able to learn from exploring the site, discuss two unique accounting issues facing colleges and universities.

Ans. There many issues which are faced by college & universities. Following are the two main accounting issues

1.Long term Investment

After more than five years of solid growth in the value of college and university investments, primarily held in endowments, steep global market declines have erased a significant share of these gains.  many institutions base their endowment spending policies using a rule to smooth spending from one year to the next, a short-term drop in endowment values typically has a modest impact on spending. For example, a majority of participants in NACUBO’s annual endowment study report using a rule that calls for spending a pre-specified percentage of a moving average of their endowment market value, either over the prior three fiscal years, or prior twelve quarters. As a result, a drop in market value in one quarter will, when included with market value from eleven other quarters, not exert an immediate downward pull on endowment spending.

Long Term debt:

The national and global economic crisis remains highly fluid and its impact on higher educational institutions will likely require many quarters, if not years, to appreciate fully. The quarter ending September 30th will likely be remembered as one of most tumultuous periods in the global financial system and credit and equity markets. What began as a liquidity and credit crisis evolved into a solvency crisis as financial institutions struggled (or were unable) to cover existing liabilities.

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