Institutional Financial Ratios Audited Data
- Trend Data: FY16-FY20 (Excluding Associated Impacts of GASB 68/75)
- FY2019 (Excluding Associated Impacts of GASB 68/75)
- FY2019 (Including Associated Impacts of GASB 68/75)
- FY2018 (Excluding Associated Impacts of GASB 68/75)
- FY2018 (Including Associated Impacts of GASB 68/75)
- FY2017 (Excluding Associated Impacts of GASB 68)
- FY2017 (Including Associated Impacts of GASB 68)
- FY2016 (Excluding Associated Impacts of GASB 68)
- FY2016 (Including Associated Impacts of GASB 68)
- FY2015 (Excluding Associated Impacts of GASB 68)
- FY2015 (Including Associated Impacts of GASB 68)
Senate Bill 6 of the 122nd General Assembly was enacted into law in 1997. It is designed to increase financial accountability of state colleges and universities by using a standard set of measures with which to monitor the fiscal health of campuses. Using the year-end audited financial statements submitted by each public institution, the Ohio Department of Higher Education annually applies these standards to monitor individual campus finances. In addition, Senate Bill 6 requires state colleges and universities to submit quarterly financial reports to the Ohio Department of Higher Education within 30 days after the end of each fiscal quarter.
Beginning in FY2015, Governmental Accounting Standards Board (GASB) Statement Number 68 (Accounting and Financial Reporting for Pensions) requires public institutions of higher education to recognize a net pension liability, pension expense and pension related deferred inflows and outflows of resources based on the institution’s proportionate share of collective amounts for all participating employers in the respective state-sponsored retirement plan. In an effort to appropriately recognize the incorporation of these elements as an accounting change rather than a structural change in the true financial condition of the institution, the Ohio Department of Higher Education will calculate institutional financial ratios from FY2015 onward both including and excluding associated impacts of GASB 68. Pursuant to administrative rule (126:3-1-01) established in response to Senate Bill 6 of the 122nd General Assembly, a composite score of or below 1.75 for two consecutive years results in an institution being placed on fiscal watch. For the purposes of this determination, the Chancellor will utilize composite scores excluding associated impacts of GASB 68.
Ratio Analysis Methodology
In order to meet the legislative intent of Senate Bill 6, the Ohio Department of Higher Education computes three ratios from which four scores are generated. The original methodology for computing the ratios was modified to recognize the new reporting format required by GASB statements 34 and 35, which became effective in FY 2002. The data and methodology used to conduct the ratio analysis for FY 2002 and thereafter are as follows:
- Expendable net assets: The sum of unrestricted net assets and restricted expendable net assets.
- Plant debt: Total long-term debt (including the current portion thereof), including but not limited to bonds payable, notes payable, and capital lease obligations.
- Total revenues: Total operating revenues, plus total non-operating revenues, plus capital appropriations, capital grants and gifts, and additions to permanent endowments.
- Total operating expenses: Total operating expenses, plus interest on long-term debt.
- Total non-operating expenses: All expenses reported as non-operating with the exception of interest expenses.
- Change in total net assets: Total revenues (operating and non-operating), less total expenses (operating and non-operating).
The methodology for calculating the three ratios is as follows:
- Viability ratio: Expendable net assets divided by plant debt. (Note: if plant debt is less than $50,000, then the viability ratio is not calculated.)
- Primary reserve ratio: Expendable net assets divided by total operating expenses.
- Net Income Ratio: Change in total net assets divided by total revenues.
Based on the calculations described above, each ratio is assigned a score ranging from zero to five according to the criteria listed in the table below. A score of 5 indicates the highest degree of fiscal strength in each category.
|Viability Ratio||< 0||0 to .29||.30 to .59||.6 to .99||1.0 to 2.5||> 2.5 or N/A|
|Primary Reserve Ratio||< -.1||-.1 to .049||.05 to .099||.10 to .249||.25 to .49||.5 or greater|
|Net Income Ratio||< -.05||-.05 to 0||0 to .009||.01 to .029||.03 to .049||.05 or greater|
- Based on these scores, a summary score termed the composite score is determined, which is the primary indicator of fiscal health. The composite score equals the sum of the assigned viability score multiplied by 30% (if plant debt is greater than $50,000), the assigned primary reserve score multiplied by 50% (or 80% if plant debt is less than $50,000), and the assigned net income score multiplied by 20%.
- NOTE: A composite score of or below 1.75 for two consecutive years would result in an institution being placed on fiscal watch. The highest composite score possible is 5.00.
Current Fiscal Year Composite Score Projection
Starting in FY 2021, ODHE is posting on this site the current fiscal year projected Composite Score as submitted by the institutions within their third quarter Schedule QF-1. The final Composite Scores will be based on each institution's audited financial statements and may differ from the projections provided at the end of the third quarter (March 31).
- FY2021 (Excluding Associated Impacts of GASB 68/75)
State colleges and universities are required to submit quarterly financial reports (unaudited) to the Ohio Department of Higher Education within 30 days after the end of each fiscal quarter. Pursuant to Senate Bill 6, a campus's failure to comply with these reporting guidelines requires the Ohio Department of Higher Education to withhold that campus's monthly subsidy payment until its quarterly report is received. Deadlines for the quarterly reports are shown in the table below.
The quarterly report consists of three parts:
- Schedule QF-1: Statement of Revenues, Expenditures, and Other Changes. An institutional projection of expendable net assets, plant debt, revenues, expenditures, change in net assets, and financial ratios for the current fiscal year, as compared to final actual data in each category for the prior two fiscal years. Current year data are unaudited and regarded as being subject to subsequent revisions and adjustments. This component should only be submitted for quarters 2 and 3 in each fiscal year.
- Schedule QF-2: Quarterly Report of Financial Actions. Consists of multiple questions designed to uncover the presence of serious cash flow problems and to provide early warning of significant problems with the current year budget. This component should be submitted for each quarter.
- Certification: Each institution’s fiscal officer, or an appropriate designee, is required to complete and submit a certification attesting to the validity of the quarterly reporting information. This component should be submitted for each quarter.
Dates to Remember
|Report||Reporting Period||Due Date|
|First Quarter*||July 1 through September 30||October 30|
|Second Quarter*||July 1 through December 31||January 30|
|Third Quarter*||July 1 through March 31||April 30|
|Fourth Quarter*||July 1 through June 30||July 30|
|Unaudited Year-End Financial Statements**||July 1 through June 30||October 31|
|Audited Year-End Financial Statements**||July 1 through June 30||December 31|
Who to Contact
*SB6 quarterly reports may be submitted to Jennifer Carson at email@example.com
**Unaudited and audited year-end financial statements are submitted to the Auditor of State. The Auditor of State may grant an extension.