Weedon delves into budget numbers for Senate
By Jason Winders
April 11, 2014
Alan Weedon, vice-provost (faculty, planning and policy), responded to senate questions Friday afternoon about the university’s budget, and the extent of the surplus in its financial statement.
“Some senators have written to the provost expressing concern that the operating budget reviewed at the last Senate meeting was somehow inaccurate in not reflecting those surpluses,” Weedon told the university Senate on Friday.
Last month, Senate voted to recommend Western’s 2014-15 budget to the Board of Governors, who will take up the issue at its April 21 meeting.
Marking the final year of the current four-year budget cycle, the 2014-15 budget shows an increase in operating revenue of 3.1 per cent to $679.2 million and an expenditure increase of 3.9 per cent to $689.2 million, for an in-year deficit of $10 million. That in-year deficit is attributed to $38 million in one-time allocations for priority items. Despite that, Western still projects an operating reserve of $32 million.
Following that meeting, an article appeared in the student Gazette reporting a University of Western Ontario Faculty Association (UWOFA) analysis of the university’s recent financial statements. That analysis pointed toward surpluses in the financial statements over the last four years totaling $202 million.
Weedon sought to clarify the numbers Friday.
He stressed the university’s financial statements are different from the operating budget.
The financial statement is an accounting – essentially an audit – of how the university spent its money in the previous year. The operating budget is a forward-looking document projecting how revenues will be used to support the ongoing expenses of the university.
Western’s most-recent financial statements showed $1.1 billion in revenues while the operating budget showed $634 million in revenues and expenditures.
“The difference between these two numbers reflects restricted funds that cannot be used or relied on to support the institution’s ongoing operating expenses,” Weedon said.
The $1.1 billion includes the revenues and expenses for the self-funded units including “some big numbers.” For instance, that number includes the costs of running student residences, and paying off the mortgages. As well, that number includes $200 million in research grants and contracts.
“These monies result from the success of faculty in acquiring funds to support their research,” Weedon said. “They are not available to fund the operating budget. In addition, they frequently come in mid-year and are not expended in the financial year covered by the financial statements.
“Consequently, they appear on the books as unspent funds and look like a surplus.”
Carry-forwards located in the faculty budgets are another part of the $1.1 billion.
“Most of our faculties have carry-forwards and, in a given year, these can total $20-$30 million,” Weedon said. “They arise, for example, because a faculty member leaves and it takes a year to recruit a replacement, leaving unexpended salary support. These funds also show on the financial statements as unspent funds and appear as a surplus, although they will be expended on one-time costs such as costs of recruitment and start up for new faculty.”
Weedon nodded to the fact the faculty association and the university administration will be discussing renewal of the faculty collective agreement this spring.
“Those discussions routinely involve a review of the university’s financial position,” he said. “Accordingly, in the very near future, there will be an opportunity for the administration to sit down with the association and go over the association’s analysis of the university’s financial statements.”
8:30 a.m. to 5 p.m.
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