Webster University will make more than $6 million in mid-year budget adjustments due to the university’s projected shortfall. The adjustments could reach $7 million. Webster Chief Financial Officer Greg Gunderson said the university will make short-term reductions to align the budget for fiscal year (FY) 2014 and approach the budget process for FY15 differently than last year. Webster’s fiscal year begins June 1st.
Webster announced the projected shortfall in an email sent from the university administration on Jan. 31.
The email outlined the following areas as a focus for the university as it works to realign its budget to fit within enrollment numbers:
—Continue to target investments to support our core academic mission and create a foundation for future revenue growth.
—Forgo the potential mid-year salary adjustment since this had been dependent on enrollment targets. The revenue shortfall is projected to be larger than the reserve set aside for a mid-year salary adjustment.
—Marshall resources to strengthen academic quality, recruiting and retention efforts.
—Offer a balanced budget signifying that Webster remains a financially solid institution dedicated to long-term financial sustainability.
—Examine long-held assumptions and policies in order to create savings and efficiencies in all colleges, schools and administrative units.
The university has yet to decide where the budget reductions will occur within its FY14 budget.
“We are currently still assessing our options,” Gunderson said.
Gunderson said the university will first seek faculty input on where cuts should come from.
Gunderson and Provost Julian Schuster were scheduled to meet with faculty at the Faculty Assembly Tuesday, Jan. 4. Due to weather, the meeting was rescheduled to Thursday, Jan. 6.
“After that (discussion) we will be able to set a timeline (for when mid-year adjustments will start). But I think it will be a matter of weeks not a matter of months.” Gunderson said.
After finishing adjustments for FY14, the university will focus on budgeting for next year. The budget planning process for FY15 will, for the most part, look like it did last year. But, Gunderson said how the university projects enrollment for next year’s budget will probably look radically different than in the past.
When forming a budget, the university first sets tuition rates, then it makes enrollment projections. From those two elements, it forms a budget and allocates the funds.
For FY15, the university will cap its enrollment projects at the actual enrollment numbers for FY14 for planning purposes.
“Clearly that budget (FY15) will be a smaller budget than this fiscal year’s budget because we’re reassessing our enrollment projections in light of national enrollment trends for graduate students and we want to be more conservative,” Gunderson said.
In a fall 2012 interview with The Journal, Paul Carney, the vice president of enrollment management and student affairs at the time, said the university’s budget is based on a “conservative” estimate for expected enrollment.
The following January, the university announced a projected $12.2 million budget shortfall below its revenue goal for the year.
More than 90 percent of Webster’s revenue comes from tuition fees.
Webster’s incoming 2013-2014 freshmen class was the largest it has been in 14 years, President Elizabeth Stroble announced at the Fall Convocation. Webster enrolled 502 students in the fall.
However, undergraduate enrollment makes up a smaller proportion of Webster’s budget than graduate enrollment.
“Its growth (the freshmen class) in proportion to its share doesn’t offset the reductions in enrollment that we saw on the graduate side,” Gunderson said.
Last year’s mid-year cuts helped the university stay within budget for the remainder of the 2012 – 2013 fiscal year. The university made budget reductions in the following areas last year:
—Five percent budget reduction for all budget lines except for salary and utilities.
—Limit new hires.
—Hold on travel and entertainment expenses.
—Cap on new classroom furniture expenses at $150,000.
—Cap on deferred maintenance spending at $140,000.
—Cap new site setup spending at $250,000.
Coordinator of Academic Affairs Tamara Minley did not know about the budget shortfall until she received the email late Friday afternoon. She said other staff members found out in the same way. Minley said her only concern at this time is “whether or not staff will receive raises based off of this communication.” Staff members have not yet had an opportunity to discuss what will happen next.
Gunderson said next, Webster will hold a town hall meeting, which will be open to the entire university community.
“We intend to have town halls that are open to students, faculty and staff so that everyone can have a better understanding of what are the fundamentals issues that underlie the actions we are taking and what’s the goals and strategies we are taking in addressing that and how we are using this process to reposition ourselves for FY15. but that starts with faculty,” Gunderson said.
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[…] the second year in a row, Webster University is making mid-year budget adjustments. The university is predicting a $6 million shortfall for the Fiscal Year (FY) 2014, which ends May 31. Webster’s total budget for FY14 was $221.4 […]
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