Review of University Budget Reveals Projected Deficit of $3.2 Million
Neelofer Qadir
Issue date: 3/1/06 Section: News
Provost of Academic Affairs Joseph Morreale and Executive Vice President of Finance and Administration Rick Whitfield presented a review of the audited 2005 budget and the projected budget for fiscal year 2006, which revealed an oversight of $2.5 million, paving the way for an $8.6 million deficit for fiscal year 2005.
Whitfield, who was hired by the University in November 2004, began by explaining the major changes that took place in fiscal year 2005; most of which were isolated to technological changes, such as the switch from the ISIS system to the Banner system, more commonly known as Project SPARTA, but also include his hire and the hire of William Black, vice president for Enrollment Management.
Shortly after Whitfield's arrival, Moody's Investment Services downgraded the University's credit rating from stable to negative, which was the third consecutive downgrade of the University's bond status. In order to re-establish a stable credit rating, Whitfield refinanced $40 million of the University's short-term debt to long-term debt. By doing this, the high interest rate of 6 percent was lowered to 3.3 percent, which according to Whitfield "bought us time-four years."
Currently, the University is posting a $60 million working capital, one which is mostly tuition dependent, meaning that the University receives a large sum of money at times when tuition is due and the months in between are "lean times," Whitfield said.
The budget committee predicted a total expenditure of $252 million for the fiscal year 2005; however, at the close of the year, the University had spent $260 million. The additional expenses incurred were mostly due to an increase in operational costs Whitfield said.
Additionally, the face of enrollment has changed steadily over the course of the last two fiscal years. The University missed the target for enrollment for Fall 2004; it exceeded its Fall 2005 target by 700. However, by missing the target enrollment in Fall 2004, the University lost $15.5 million in tuition and fees and $400,000 in the expected Housing budget.
Whitfield, who was hired by the University in November 2004, began by explaining the major changes that took place in fiscal year 2005; most of which were isolated to technological changes, such as the switch from the ISIS system to the Banner system, more commonly known as Project SPARTA, but also include his hire and the hire of William Black, vice president for Enrollment Management.
Shortly after Whitfield's arrival, Moody's Investment Services downgraded the University's credit rating from stable to negative, which was the third consecutive downgrade of the University's bond status. In order to re-establish a stable credit rating, Whitfield refinanced $40 million of the University's short-term debt to long-term debt. By doing this, the high interest rate of 6 percent was lowered to 3.3 percent, which according to Whitfield "bought us time-four years."
Currently, the University is posting a $60 million working capital, one which is mostly tuition dependent, meaning that the University receives a large sum of money at times when tuition is due and the months in between are "lean times," Whitfield said.
The budget committee predicted a total expenditure of $252 million for the fiscal year 2005; however, at the close of the year, the University had spent $260 million. The additional expenses incurred were mostly due to an increase in operational costs Whitfield said.
Additionally, the face of enrollment has changed steadily over the course of the last two fiscal years. The University missed the target for enrollment for Fall 2004; it exceeded its Fall 2005 target by 700. However, by missing the target enrollment in Fall 2004, the University lost $15.5 million in tuition and fees and $400,000 in the expected Housing budget.