March 14, 2018 | University Life

by John Verzani illustration of pie chart
Recently the UFS Budget Advisory Committee of the University Faculty Senate reviewed the University’s mid-year financial report with Senior Vice Chancellor and CFO Matthew Sapienza and University Budget Director Catherine Abata. At a previous meeting, the committee reviewed the first-quarter reports.

CUNY’s Quarterly Financial Reports Explained
CUNY generates quarterly financial reports—snapshots of the university’s financial position at the end of a quarter with detail on each individual campus. At the highest level, a college’s financial position includes its projected resources (the monies allocated to the campus, the pending allocations, the student technology fees, and the tuition revenue above CUNY’s target) and its projected expenditures. Ideally, for each campus the projected expenditures are less than the projected resources. When this is not the case at the end of a year the college will need to use its prior-year CUTRA (City University Tuition Reimbursable Account) and other reserves to cover the difference.

Variables, positive and negative
In regular budget times, each college targets to have between 1 to 3 percent of its annual budget in CUTRA. This allows slight yearly deficits to be easily covered and can facilitate multi-year commitments, such as start up costs for a new faculty member.  Meanwhile,  projections shift throughout the year. For example, the projected total resources for senior colleges rose from 2.259B to 2.265 billion dollars between the first-quarter and mid-year financial reports. On reflection, this makes sense. For example, tuition revenue will not be fully known until enrollment is set and tuition dollars are collected

More importantly, projected expenditures will also fluctuate. This budget year, for example, is a difficult one for most senior college campuses, as budget allocations reflect the reality that the colleges had to absorb a 1% reallocation to cover fully the costs of the collective bargaining increases. In the past quarter, the projected combined over expenditures at the senior campuses rose from 17.8M to 25.9M, though by no means were increases uniform across all campuses. (Community colleges see a similarly sized increase in over expenditures during this time period.)

Planning Ahead
The quarterly reports allow CUNY and its campuses to identify areas of possible concern before they can become issues. For faculty, looking at which campuses had big changes each quarter in their projected over/under expenditures is interesting, as it may explain what could be happening on a campus to increase revenue or contain expenses.

As an example, there were three senior colleges with projected year-end deficits in the first-quarter report.

The college with the largest projected over expenditure at the first quarter was able to trim their projection by 44% in the quarter, leading to a projected positive year-end balance. As roughly 80% of each campus budget is tied to “PS Regular” (full time personnel), large-scale trimming would typically involve changes in staffing levels. Significant savings can be achieved simply by leaving vacated positions unfilled or even temporarily unfilled, should these be viable options. The financial reports show staffing levels over several broad categories and compares these levels to the past few years allowing quick comparisons to past years. In this case, during this past quarter at this campus there were just 2 fewer positions, but over 800K in projected savings in this category. There are other areas where big differences can be made from year to year, such as, increasing tuition revenue and/or trimming the adjunct budget, though both of these can be difficult adjustments during the academic year.

The other two campuses with projected deficits show the effect of changes to OTPS expenditures (other than personnel services). At one campus, there was a nearly 1M cut in projected expenditures, primarily driven by decreased OTPS spending. At the other, OTPS spending went up along with the projected deficit. While much of OTPS obligations may be tied to contracts, there are may be areas where savings can occur, though some times at an inconvenience to faculty, students, and staff.

In the mid-year report, only one campus is projected to over spend their CUTRA and other reserves. But nearly every campus is projected to dip into their reserves. (At mid-year, for senior colleges, this “dip” is about 26M of the combined 41M in reserve.) Such spending is unsustainable in the long term, but there are good arguments for doing so this year. Hopefully, as proposed by the Governor but not yet adopted, in addition to other promising items, next year’s budget is anticipated to bring an additional 30M or so in new funds to CUNY through revenue appropriations to accommodate a $200 annual tuition increase. This should mean additional investment in the campuses and a return to growing reserves.

John Verzani is Professor and Chair of the Department of Mathematics at the College of Staten Island and Chair of the UFS Budget Advisory Committee.

For more information about the CUNY Budget consider attending the UFS’s Budget Workshop on Friday, April 13—email UFS Executive Director Matthew Cotter, at Registration is required.

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Image: mohamed_hassan,