Compliance
Certification
Core Requirements
2.1 | 2.2 | 2.3 | 2.4 | 2.5 | 2.6 | 2.7.1 | 2.7.2 | 2.7.3 | 2.7.4 | 2.8 | 2.9 | 2.10 | 2.11

Quality Enhancement Plan
2.12

Comprehensive Standards
3.1.1 (Mission)

3.2.1 | 3.2.2 | 3.2.3 | 3.2.4 | 3.2.5 | 3.2.6 | 3.2.7 | 3.2.8 | 3.2.9 | 3.2.10 | 3.2.11 | 3.2.12 | 3.2.13 | 3.2.14 (Admin.)

3.3.1 (Effectiveness)

3.4.1 | 3.4.2 | 3.4.3 | 3.4.4 | 3.4.5 | 3.4.6 | 3.4.7 | 3.4.8 | 3.4.9 | 3.4.10 | 3.4.11 | 3.4.12 | 3.4.13 | 3.4.14 (Educational Program)

3.5.1 | 3.5.2 (Undergraduate Program)

3.7.1 | 3.7.2 | 3.7.3 | 3.7.4 | 3.7.5 (Faculty)

3.8.1 | 3.8.2 | 3.8.3 (Library)

3.9.1 | 3.9.2 | 3.9.3 (Students)

3.10.1 | 3.10.2 | 3.10.3 | 3.10.4 | 3.10.5 | 3.10.6 | 3.10.7 (Resources)

Federal Requirements
4.1 | 4.2 | 4.3 | 4.4 | 4.5 | 4.6 | 4.7 | 4.8

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Compliance Certification Report

Core Requirement 2.11 - Financial stability and physical resources

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

Judgment of Compliance

Davidson College is in compliance with Core Requirement 2.11.

Rationale for Judgment of Compliance

Davidson College maintains a sound financial basis and appropriate, high quality physical resources to support its mission, plans, programs, and services. Each year the College conducts a thorough budget planning process based on strategic planning priorities set out by the Priorities and Planning Committee in 1998’s Foundations of Excellence and further established by the Let Learning Be Cherished capital campaign that was completed on June 30, 2005. The sound financial basis is clear in the College’s annual financial statements, which show a clear pattern of growth in revenue, expenditures, and net assets.

Davidson demonstrates financial stability in the following ways:

• The College’s budget process includes a review by both the Principal Executive Staff and the Advisory Council on Finance, Personnel, and Development, which includes faculty, staff, and student members.  Those committees review both annual operating budgets as well as the College’s capital budget.  Their budget recommendations and comments are sent on to the President, who then presents his budget proposal to the Trustee Finance and Budget Committee and the entire Board for Trustees for approval.

• The College has always maintained balanced operating budgets. (Public Budget Reports for fiscal years 2004, 2005, 2006)

• The College has long maintained a bond rating of “AA” by Standard & Poor’s (last reviewed in 2000).

• The College’s average annual compound investment returns for the past ten years have been 12 percent, compared to the national endowment mean of 10.1 percent through June 30, 2005.  Davidson College was ranked in the 88th percentile by the National Association of College and University Business Officers for its 10-year average returns.

• The College prepares financial statements annually that are audited by KPMG and reviewed by the Audit Subcommittee of the College’s Board of Trustees and previously by the Finance and Budget Committee. Those financial statements have always included a clean audit opinion, no material weaknesses in internal controls, and no significant management letter comments. Those financial statements demonstrate a consistent pattern of growth in revenues, expenditures, and net assets. The most recent audit confirms that the College maintains a strong financial position with net assets totaling $669 million, an increase of $50.5 million over the prior year. Unrestricted net assets exclusive of plant assets were $226,965,353, an increase of $37,435,530 over the previous year. Total endowment on June 30, 2005 was $382,158,950, up 17.1 percent from the previous year.  (Audited Financial Statements from fiscal years 2003, 2004, and 2005)

The College continues to build its financial base through private fund raising as well as grants and contracts. The College recently completed it capital campaign, Let Learning be Cherished, raising $272 million against a goal of $250 million. The 34,000 donors to the campaign provided for 156 new scholarships, 15 new faculty endowments, four new academic and student life endowments, two athletic endowments, and $44 million to the Annual Fund, in addition to the capital improvements described below.

The College has made significant investments in its buildings and infrastructure. Over the course of the past several years, using a judicious combination of donations, bond funding, and internal funding, the College completed the renovation or construction of nine buildings and the construction and renovation of four athletic facilities. The College converted the former Grey College Union into the Sloan Music Building at a cost of $10.6 million, creating 55,795 gross square feet of studio space, classrooms, offices, a music library, and Tyler-Tallman Hall.  For a cost of $35 million, the College converted the former Johnston Gymnasium into the Knobloch Campus Center, with 87,095 gross square feet of renovated space and an additional 63,721 gross square feet as the Duke Family Performance Hall.  For $2.1 million, the College built a 9,000 square foot, state-of-the art facility for WDAV, Davidson’s classical radio station.  The College completely renovated the 133,931 gross square feet of Chambers Building for $21.8 million, creating state-of-the art technology classrooms, spacious offices, and multiple open meeting spaces. The fund-raising for each of these facilities included endowment funding for future maintenance.

In addition, the College used some campaign funds as well as borrowed funds to complete the campus infrastructure project for $14 million, which linked the updated campus utilities to nearly all buildings on campus. The College also upgraded its sports facilities in major ways, spending $1.6 million for the Carol Grotnes Belk Turf Field, $1 million for the Wilson Baseball Field, $2.5 million for the Richardson Stadium expansion, and $2 million for the Alumni Soccer Stadium.

Each year the College renovates at least one of its residence halls. In 2004, the College spent $4.8 million to renovate Belk Residence Hall, which houses over 250 first-year students. In 2005 the College renovated Martin Court F, a senior apartment living complex, and added improvement to Irwin, Akers, and Knox, three sophomore residence halls. The College also spent $3.5 million on Patterson Court eating house renovations. Still to be completed as part of campaign funding will be the renovation and addition of Duke Residence Hall combined with offices for the Dean Rusk International Studies Program, which is estimated to cost approximately $6.2 million, and for which the College has already raised $5.7 million.

Supporting Documentation

• Public Budget Reports for fiscal years 2004, 2005, 2006
• Audited Financial Statements from fiscal years 2003, 2004, and 2005
• Statement from Standard & Poor’s on Bond Rating

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