Long-term budget resource strategy was an important issue during the Ohio State Board of Trustees meeting Friday.
“We’re concerned with our current funding, our future allocation,and the impact of the statewide budget on the tuition of our current and prospective students, and on our ability to implement our academic plan,” said OSU President Karen A. Holbrook.
Provost Ed Ray and Bill Shkurti, vice president of business and finance, presented their take on long-term budget resource issues to the board.
“We have some very real resource challenges facing us immediately,” Ray said. “We are positioning ourselves to deal with them and deal with long-term challenges in the state of Ohio.”
Ray and Shkurti’s presentation addressed numerous aspects of the university’s budget. In terms of revenue costs, OSU is doing well compared to other colleges, according to the report.
“Our own benchmarking shows that our costs are substantially below those of comparable institutions, but that doesn’t translate into diminished expectations from the students, the community, or from the state of Ohio,” Ray said.
Ray said OSU’s large size is a comparative advantage over others to formulate unique sources of additional income and cost reduction.
“Changes in our budget process are intended to show that we can manage resources in a way that is supportive of what we are trying to accomplish through the Academic Plan,” Ray said. “We are committed to moving this institution forward, and that means that we need to have the resources to get the job done right.”
Resources alone do not show success, so the university must be focused on becoming a success, Ray said.
The university has had a long record of innovative approaches to developing revenue and achieving cost reductions. In the 1980s, fund-raising efforts were increased by the university. Fund raising continued in the 1990s through the “Affirm Thy Friendship” campaign, which brought in $1.23 billion. Cost reductions were made in the 1970s through energy conservation and in the 1990s through comprehensive restructuring of many academic programs.
The university is taking an “outside the box” initiative towards revenue raising, which includes a change in state law for increased extramural sponsorship and increased cost recovery on federally sponsored research.
“We restructured the budget process to provide a greater incentive to academic units to raise revenues and cut their costs,” Ray said.
An elimination of 600 faculty and staff positions for the 2003 fiscal year was one thing the university had to do to reduce costs. The property and liability insurance has been restructured as well, and a Web-based auction site has been created for the sale of surplus materials from the university.
In the next 12 to 18 months, the university has many goals to help its budget. Among these goals is the need to be more aggressive about federal agendas, to work to increase extramural sponsorship of research, to increase the cost recovery rate on sponsored research and to expand opportunities for private giving.
“Sometimes the size of the university can be to our advantage, but it can also be a big challenge when it comes to cost saving,” Shkurti said.
One goal of the university is to avoid $20 million to $25 million in spending over the next five years.
With the economy down and education funding low, the university must be prepared for anything.
“We have to hope for the best and prepare for the worst,” Shkurti said.
The university has a $10-million “rainy day” fund set aside in the budget, but it may not be enough to sustain further spending.
“Another option that we would be real reluctant to do is to raise tuition in mid-year, but we are not, I repeat, not going to do this unless absolutely forced to by very dire circumstances,” Shkurti said.
Thirteen resolutions were approved by the board, including the establishment of a doctoral program in comparative studies.
