UA Foundation

R​‌‍‍‍‌‍‍‌‍‌‌‍‍‍‌‍‌‌‌‍​eview the attached audits conducted by HoganTaylor for the UA Foundation Inc. from FY June 30, 2019, 2018, and 2017. In a two or three-paragraph post relate your observations on the financial health of the foundation and anything you found interesting in the reports. You'll notice that big changes were made in the 2019 report from the adoption of the new non-profit accounting standard. The main changes were collapsing the three net asset classes into two, adding in the statement of functional expenses, and adding in a liquidity footnote. Below is an interesting note I received from Ms. Sarah Langham with HoganTaylor who headed up the foundation audit. She comments on the fact that NPO's don't have an MD&A section in their report (like governmental entities do) and how that the addition of such a section might be beneficial for report readers. She writes: "One thing that your class may find interesting is seeing how transactions/items roll from one year to the next and what is required to be disclosed. For example – in the 2017 report, footnote 12 disclosed the subsequ​‌‍‍‍‌‍‍‌‍‌‌‍‍‍‌‍‌‌‌‍​ent event related to the contribution to the School of Art. This was a required disclosure since it happened before the financials were issued and were material. The contribution was accounted for in the 2018 report, you can see it flow through the Statement of Activities (there is a significant increase in perm restricted contributions compared to 2017) and you see if flow through the endowment footnote. However, in the 2018 report – we don’t (and there is no requirement to) call out the increases and explain why/what happened. The UofA Foundation is a nonprofit and its stand-alone report is not under governmental accounting standards. This is one reason why in governmental accounting, there is a requirement for an MD&A section. The average person who wants to know what is going on with their city/county/etc isn’t going to have the working knowledge of what should change in the financials (the backstory of what is happening in governmental accounting isn’t always a hot topic in the news). MD&A gives the users insight into the story of what changed and​‌‍‍‍‌‍‍‌‍‌‌‍‍‍‌‍‌‌‌‍​ why."