April 5, 2012
Dear Faculty and Staff:
Over the past several weeks many public claims have been made about what the most recent Comprehensive Annual Financial Report (CAFR) says about the financial status of UNI. We think it's important that you consider the following information in making up your own mind about the university's situation.
Claim #1 – Budget priorities are misplaced.
During FY2011 (academic year 2010-11), UNI spent over $78.5M on instruction, an increase of more than $7.4 million or 10.4% when compared to FY2010 spending. During the same year, tuition and fees revenue increased by $2.75 million and our General Education Fund (GEF) state appropriation decreased by $4.8 million yielding only a 1.5% increase in operating revenue. To the extent possible, UNI has kept the focus on academics even in a difficult budget situation by reallocating and reducing elsewhere in the university.
(source: FY2011 Comprehensive Annual Financial Report, p. 29)
Claim #2 – There are fewer faculty.
The number of Full Time Equivalent (FTE) faculty members increased by 20 (from 690 to 710) for FY2011 compared to the previous year. The student to faculty ratio dropped from 17.0 to 16.0.
(source: FY2011 Comprehensive Annual Financial Report, p. 92)
Claim #3 - The number of academic administrators has increased.
The number of executive/managerial administrators at UNI has declined to 98, a ten year decrease of 5.8%. The number of Professional and Scientific staff has increased in the past few years. Examples include an increase in ITS to provide support for the advanced technology networks and devices we have all come to rely on; the Office of Sponsored Programs, which supports the increased grants and contracts activity of faculty; the Counseling Center which serves an ever-increasing number of students who come to campus with more serious mental health issues; and in the development office which is aggressively working to build an endowment, which will help fill future budget gaps we will face as state support for higher education continues to decline.
(source: 2010-2011 Fact Book, p.57 and information compiled by the Provost's office using Human Resources Services database)
Claim #4 – UNI has plenty of money to support its operating budget since net assets have increased.
Net assets did increase in FY2011 by over $7 million as compared to the previous year. As a result of the renovation of Sabin Hall, funded by the State of Iowa, the value of Sabin Hall increased significantly. This increase in value is the largest contributor to the net asset increase. The renovation provides an enhanced educational environment for students and faculty but the only way the university can use this asset to support the operating budget is to sell Sabin Hall.
(source: FY2011 Supplement to the Comprehensive Annual Financial Report, p. 53)
Claim #5 – The President's and Provost's office expenses have grown disproportionately the past few years.
In fulfilling a request from a Senate caucus staff member, the worksheet they provided asked UNI to utilize actual data for four years and budget for this year. The five year trend shows an average growth of 1.3% per year for the President's office and 0.5% for the Provost's office.
Claim #6 – The University uses its General Fund to erase the deficits of auxiliary enterprises.
Auxiliaries do not routinely run deficits. The budgets of auxiliary units are prepared annually as part of the normal university budget planning process. The amount of GEF support that will be provided to each unit in a given year is included in the budget which is approved by the Board of Regents. Auxiliaries contribute to student learning, personal growth, engagement, satisfaction, retention, graduation and success. They help us educate the "whole person." GEF support to auxiliaries has declined from 6.7% in FY2007 to 4.8% in FY2011 and is now below the FY2000 rate of 4.9 percent. In addition, the major auxiliaries paid an administrative overhead fee to the GEF of almost $1 million in FY2011.
Claim #7 – The University is flush with cash.
The FY2011 financial report shows a cash and cash equivalent balance of around $27 million cash (CAFR, p. 27). This is equal to about one month's worth of expenses for the university, similar to what most of us experience the day after our monthly paycheck is deposited.
Claim #8 – Everyone should read the Comprehensive Annual Financial Report; there is interesting information in there.
We agree! If you would like to read more, the Comprehensive Annual Financial Report is available at https://access.uni.edu/reports/cafr/index.shtml
Thank you for your continued service to the University of Northern Iowa.
Gloria Gibson, Executive Vice President and Provost
Michael Hager, Vice President for Administration and Financial Services