MILWAUKEE, Wis. – The University of Wisconsin System Board of Regents today approved a $6.097 billion spending plan for the state’s public university system, using $159.9 million in accumulated balances to freeze tuition rates at current levels and to support other student-related academic and program needs.
The Board’s action funds the UW System for the fiscal year that begins on July 1, 2014, and ends on June 30, 2015. The FY15 budget is an increase of approximately 1.7 percent in total expenditures, primarily the result of the state-approved one percent pay increase plan, as well as debt service and projected increases in the UW System’s costs for utilities, goods, and services.
In presenting the spending plan to the Board, UW System President Ray Cross said that it provides more details on types and categories of expenditures than was ever provided to regents in previous annual plans. Cross said it was part of a comprehensive reform of the university’s financial management and reporting practices.
“Perhaps the most noteworthy reform we are making within the financial management systems is the disaggregation of our finances,” Cross explained. “In this proposed annual budget you will see the budget broken down by fund and by institution. Before the October Board meeting, you will also see each institution’s fund balances broken down by category.”
“These reforms are consistent with the Board’s charge to Ray and his administration,” stated Michael J. Falbo, president of the UW Board of Regents. “As the university system’s governing body, we must have access to the best information possible in order to provide appropriate levels of oversight. The changes presented to us today will improve our ability to meet our statutory obligation to assess the present and plan for the future.”
Cross added that as part of the reforms, the UW System and its member institutions will be required to conform to terminology and standards used by the Legislative Audit Bureau. Doing so will provide greater clarity and accountability regarding the university’s finances, he said.
Cross also reported that the institutional and systemwide fund balances accumulated over time has been reduced from $1.097 billion on July 1 to a projected $917 million at the end of this month in order to support ongoing and one-time needs.
“This represents a 16.5 percent reduction during the last year,” he explained. “Those balances are projected to further drop to approximately $800 million by June of next year. In total, this represents a 27 percent drop over a two-year period.”
Cross also pointed out that two categories of spending have seen significant reductions through planned and designated uses.
“It is important to note that the tuition fund balance is projected to drop significantly—from $551 million last June to $304 million by June of next year. That represents a 45 percent reduction in the two-year period.” Those funds are being used to keep tuition rates at existing levels, he explained.
“I am also pleased to note that [the centrally held] systemwide tuition fund is projected to be down from $151 million in June of last year to about $60 million this June,” Cross continued. “I promised the Board, the Governor, the Legislature, and the chancellors it would be cut in half by this June. I am pleased to report that we have exceeded our goal and have reduced it by over 60 percent. Now we are working to make it even more transparent and lower it further.