A PLAN TO STABILIZE, INVEST AND GROW
Board approves budget for new fiscal year
Posted June 14, 2017
After hearing a review of the results of the Fiscal Year 2016 – 2017 budget, which concludes on June 30, 2017, the Board of Trustees on June 14 adopted a budget for the upcoming Fiscal 2017-2018 year.
As has been reported previously, preliminary numbers for the current fiscal year show that the cost control measures that were put in place across the campus have yielded good results, enough that the anticipated withdrawals from University reserves will be significantly less than the $18 million that was projected originally. President Matthew J. Wilson said, “The Board and I very much appreciate the efforts that everyone made to be fiscally prudent, including restraints on hiring. While next year’s budget still is challenging, we are in a better position than we would have been without those collective efforts.”
Chief Financial Officer Nathan Mortimer outlined several assumptions that form the backdrop for the upcoming fiscal year budget. They include: a 5% decrease in total enrollment, due to large graduating classes the last two years and the significant drop in freshman enrollment last fall; a slight decrease in State Share of Instruction funding; and, no increase in tuition and general fees.
General Fund revenues for FY 2017 – 2018 are projected to be $340 million, while expenditures are projected to be $369 million, leaving a $29 million gap that is to be filled by a combination of increasing revenues, continuing to aggressively control costs and then withdrawing what is needed from University reserves to cover the difference.
Message from President Wilson: Update to the Transformation Plan
Posted March 14, 2017
President Matthew Wilson sent a message to faculty and staff about the proposed voluntary buyout plan, the Akron Guarantee Scholarship, the success of our cost-containment program and more.
Message from President Wilson: Introducing the Transformation Plan
Posted Nov. 21, 2016
We have had much good news to celebrate recently, and I anticipate even more to come. Donations to the University are climbing, there is a renewed sense of coming together, student applications are once again headed in the right direction, the media coverage has been positive, the focus on our students has redoubled, and just a few weeks ago we announced a $3 million Knight Foundation grant. Thank you to all who have participated in our numerous town hall meetings and informal conversations. I want to continue our dialogue in the months ahead.
President Matthew J. Wilson
As discussed, the University faces the financial realities associated with a downturn in enrollment. Over the past five years, we have experienced gradual enrollment declines resulting from the University’s move to more selective admission standards several years ago, demographics, the impact of large graduating classes and the turbulence of the last year, which resulted in a smaller entering freshman class this fall.
The smaller student body, combined with our efforts to provide an affordable education, require that we closely analyze and adjust our expenditures to ensure our future success. Naturally, we need to minimize the impact these adjustments might have on students – particularly in the areas of recruitment, access, diversity, academic quality, research opportunities, retention, success and ultimately, timely completion of degree.
Addressing budget realities
In recent months, we have explored various approaches to address these realities. I have solicited suggestions from the campus community on ways to increase revenue and reduce expenses. The tiger team focused significant time and effort on these important issues. The University leadership team (both academic and administrative) has continuously discussed possible options. We even enlisted outside expertise and assistance through UA supporters and, using a gift from an anonymous donor, engaged the services of the management and accounting firm of Ernst and Young (E&Y). E&Y has assessed our past financial activities, examined our current financial situation, and provided preliminary suggestions for ways to ensure budgetary stability going forward. I compliment the E&Y team on an outstanding job in achieving these objectives.
Based on ongoing discussions combined with E&Y’s objective and impartial assistance, we have formulated a two-year action plan to tackle our financial challenges and balance the budget in two years. We will continue to flesh out the details of this plan based on ongoing discussions across campus and expert advice. We need flexibility, creativity, and understanding. To date, I have outlined our financial reality and portions of the action plan in town halls and other meetings. We also have discussed these things with the leadership of Faculty Senate, University Council, the AAUP and other bargaining units, and the Board of Trustees. I believe everyone is working toward a common understanding of the situation, and appreciates the importance of maintaining positivity for this plan to succeed. We need to focus on UA’s many strengths while working to resolve our challenges. This means constantly championing the successes of our students, quality of our academic programs, and strengths of our faculty and research endeavors while we work on our fiscal challenges.
Because e-mail cannot adequately convey all the relevant information, we have outlined the two-year financial plan and posted it together with the E&Y report and an explanatory video at uakron.edu/budget. In short, I can summarize the key finding of the report – expenses still outpace our revenues despite a cut of about $20 million from our budget last year. In large part this stems from the 8% decline in enrollment this year. Absent meaningful adjustments now, this trend will continue and quickly raise even greater risks.
Stabilize, invest and grow
I remain encouraged and optimistic. Fortunately, the E&Y report, together with our ongoing discussions, have helped focus us on solutions to our financial realities. The plan we have developed to meet our challenges can best be summarized as Stabilize–Invest–Grow. We can further stabilize our institution with a variety of initiatives, including a voluntary buy-out program to reduce personnel expenses, enhanced retention and recruitment initiatives (international focus and enhanced evening/weekend/online offerings), increased fundraising efforts, remodeling of our scholarship system, updating of our graduate assistantship program, and enhancements to the efficiency of our systems and processes.
There is much to digest, and our initiatives still need to be fleshed out. We will continue discussions with University governance groups, other segments of the UA family, and community. If you have questions, comments, and suggestions, please do not hesitate to e-mail me at firstname.lastname@example.org.
I strongly believe this two-year plan will carry us forward. At the same time, please know that it will require everyone to work in unity to make it succeed. We have the talent, energy, and ability to overcome our current challenges. We need to believe in ourselves, talk positively, and demonstrate our belief in the long-term success of UA through our commitment and actions.
Thank you for all you do every day for our students, our University, and our community. We have been entrusted with a rich legacy and important mission to educate, empower, innovate, and equip a workforce highly trained in diverse disciplines. I look forward to working together to continue UA’s legacy and realize our mission.
Matthew J. Wilson