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On 4/17 the "Resources Committee", an ad hoc group appointed of faculty and a rep from the controllers office, for the second year presented a university wide review of budgeting and subsequent financial decision making, transparency and accountability for resources across BU.
The Committee is led by a professor from BU's accounting department.
The Committee put together a very easy to understand presentation summarizing, among other things, the financial resource allocation across BU.
There are very real concerns about the deficit spending, lack of accountability for such spending and a lack of transparency from university management related to not providing the full financial information. Moreover the Committee has for the second year sounded the alarm over the fact there is no urgency around these very real issues and this damage is already done and needs very dramatic solutions.
It also sounds like BU will miss its enrollment targets this year which will create more pressure.
The report presents that expenses are, and have been, exceeding revenues and the problem is ongoing and accelerating without any plan to remedy the issues. The report uses 2005 as a baseline and compares the intervening years, including 2013, on a number of measures.
So while BU's gross financial resources coming in have increased through tuition increases and other sources, the gross resources going out have out stripped revenue. For every $1.00 coming in ...BU is spending $1.50. Or put another way...what formerly was approximately $10 mil positive result is now in excess of ($6.2 mil) negative with expenses exceeding revenues for 2013.
-Over the sample period Athletics revenue has generally been consistent and flat.....however beginning in 2007 Athletics expenses have ramped up and now have doubled in 2013. From expenses of $5.5mil in 2005 to $10.1 mil in 2013.
- while gross tuition with rate increases has risen....the need to discount tuition to attract students has increased. But BU's leadership spending on operating expenses has dramatically increased. Net annual tuition increased $27 mil since 2005 but annual operating expenses have increased $39 mil since 2005. Or for every $1 increase in net tuition ....operating expenses have grown by $1.42 in 2013.
The report worried about the sustainability of ongoing 4 percent annual tuition increases ....the need for growing tuition discounting and the related financial impact ...and the current and growing expense versus revenue gap. The lack of a long term financial plan was noted.
The report cited concerns over:
-the lack any consistent urgency to resolve these issues...
-the lack of financial transparency from the BU administration ...
- the lack of complete data and whether any financial comprehension and acumen exists to understand these issues...
-the lack any rigorous responsibility for budgeting and results..
-BU's high leverage ratios...
-And amazingly......whether the Board of Trustees are engaged/involved.
So while others have tried minimize what has been unfolding financially at BU....the university's own special faculty committee has and is sounding the alarm bell.
The Committee is led by a professor from BU's accounting department.
The Committee put together a very easy to understand presentation summarizing, among other things, the financial resource allocation across BU.
There are very real concerns about the deficit spending, lack of accountability for such spending and a lack of transparency from university management related to not providing the full financial information. Moreover the Committee has for the second year sounded the alarm over the fact there is no urgency around these very real issues and this damage is already done and needs very dramatic solutions.
It also sounds like BU will miss its enrollment targets this year which will create more pressure.
The report presents that expenses are, and have been, exceeding revenues and the problem is ongoing and accelerating without any plan to remedy the issues. The report uses 2005 as a baseline and compares the intervening years, including 2013, on a number of measures.
So while BU's gross financial resources coming in have increased through tuition increases and other sources, the gross resources going out have out stripped revenue. For every $1.00 coming in ...BU is spending $1.50. Or put another way...what formerly was approximately $10 mil positive result is now in excess of ($6.2 mil) negative with expenses exceeding revenues for 2013.
-Over the sample period Athletics revenue has generally been consistent and flat.....however beginning in 2007 Athletics expenses have ramped up and now have doubled in 2013. From expenses of $5.5mil in 2005 to $10.1 mil in 2013.
- while gross tuition with rate increases has risen....the need to discount tuition to attract students has increased. But BU's leadership spending on operating expenses has dramatically increased. Net annual tuition increased $27 mil since 2005 but annual operating expenses have increased $39 mil since 2005. Or for every $1 increase in net tuition ....operating expenses have grown by $1.42 in 2013.
The report worried about the sustainability of ongoing 4 percent annual tuition increases ....the need for growing tuition discounting and the related financial impact ...and the current and growing expense versus revenue gap. The lack of a long term financial plan was noted.
The report cited concerns over:
-the lack any consistent urgency to resolve these issues...
-the lack of financial transparency from the BU administration ...
- the lack of complete data and whether any financial comprehension and acumen exists to understand these issues...
-the lack any rigorous responsibility for budgeting and results..
-BU's high leverage ratios...
-And amazingly......whether the Board of Trustees are engaged/involved.
So while others have tried minimize what has been unfolding financially at BU....the university's own special faculty committee has and is sounding the alarm bell.
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