Board of Regents Meeting Overview: General fund to come in on budget this year

The Board of Regents’ Finance, Audit and Investment Committee heard an overall positive report about the university’s five budget categories from university administrators Tuesday afternoon. Members of the committee, which included all Board members, asked questions about each category and the rate of improving the university’s IT infrastructure. The committee also accepted a positive report about WEMU and reviewed a recommendation
to extend the contract with Sungard for another ten years as its Banner software.

“So, you are on record as saying our General Fund will come in on budget?” This question, from committee chair Mike Morris, came after Chief Financial Officer John Lumm had reported the University’s General Fund expenditures currently are on track to exceed revenue by $3 million.

Lumm responded, “Yes, that’s only one percent on a $300 million dollar budget.” He reported a combination of spending under-runs and deferrals would balance the fund.

The Auxiliaries Fund’s operating budget is $40.7 million and on track to be balanced. Grants and Contracts, the third category, whose target for FY 2012 is $120 million (less than FY 2011’s $125 million), shows promise. Lumm reported that there are $26.8 million worth of proposals as of December 2011. Last year at this time, there were only $20.2. Regent Francine Parker suggested that “professors need more training to be more successful. We need a centralized mechanism.” Her comment was in response to Lumm’s statement that federal grants have become harder to get.

The fourth category, Fundraising (cash and gifts in kind), whose FY 2012 goal is $9.5 million, has already brought in $9 million, far exceeding FY2011’s $5.1 million.

The last category, Cash and Investments, holds $90.7 million as of January 2012. This fund has three parts: long-term investments, which are 30 percent equities and 70 percent bonds ($41.1 million); intermediate term ($1.5 million); and cash and short term holdings ($39.6 million). Chair Morris asked about goals for investment return and suggested using benchmarks to measure success.

The report on Information Technology, from Chief Information Officer Carl Powell, emphasized network infrastructure upgrades in Pray-Harrold, installation of pilot cell phone charging kiosks in Pray-Harrold and Halle and the recent upgrade of Eaglemail.

Questions from the committee pressed Powell on where EMU’s technology stands in relation to peer state schools.

He replied, “We are behind the curve compared to a couple, including Western.” This generated discussion of the need to improve wireless coverage
and make a plan for what it would cost to make major improvements. Powell described a plan to get that information.

The Committee also reviewed WEMU’s financial statements and Plante Moran’s review of the station’s financial situation. Lumm reported on WEMU’s
progress to reduce costs, expressing appreciation for the work of Walter Kraft, Vice President for Communications, and station manager Molly

Finally, the Committee reviewed the recommendation from Lumm and his staff to extend the contract for Banner software, from SunGard, for another ten years. The initial 2002 contract is about to expire.

The new contract, for a bit under $400,000 a year, has a 4 percent annual escalatory clause, Lumm said, that includes software upgrades. He had not considered changing systems, since Banner has been satisfactory and there would be “massive” costs in changing systems.

Banner software, which is used by about 50 percent of the market, underlies all EMU operations affecting students, financial aid, financial record keeping, human resources and advancement.

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