2017 – 2016 Notes

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Note 14 – Contingencies and Commitments  

The University has sovereign immunity and is, therefore, in the opinion of University Counsel, immune to ordinary tort actions. The University has consistently been dismissed from lawsuits on the basis of the sovereign immunity doctrine. That doctrine also protects the University from vicarious liability arising from the negligence of its employees. As a matter of policy, the University has chosen to indemnify its employees through a self-insured trust fund against liabilities arising from the performance of their official duties. Some exceptions to the sovereign immunity doctrine exist, most notably federal court cases arising under the federal Constitution or federal statutes. The University is engaged in various legal actions in the ordinary course of business. Management does not believe the ultimate outcome of those actions will have a material adverse effect on the financial statements. However, the settlement of legal actions is subject to inherent uncertainties, and it is possible that such outcomes could differ materially from management’s current expectations.  

Amounts received or receivable from grantor agencies are subject to audit and adjustments by such agencies, principally the United States Government. Any disallowed claims, including amounts already collected, may constitute a liability of the University. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the University expects any such amounts to be immaterial.  

The University has contracted for the construction and renovation of several facilities. At September 30, 2017 and 2016, the estimated remaining cost to complete the construction and renovation of these facilities was approximately $148.3 million and $39.3 million, respectively, which is expected to be financed from grants, bond proceeds, University funds, and private gifts. The $109.0 million increase primarily results from the construction of several projects on campus during fiscal year including Freshman Residential Housing, Tutwiler Parking Deck, and HM Comer renovations.