Administrators announce details of budget shortfall

By: Taylor Fulkerson & Justin Worthing ~Managing Editor & Staff Writer~

University administrators announced the size of the fall’s pending budget shortfall and the strategies employed to ameliorate it this week. According to a letter from President, Fr. Michael Graham, S.J., addressed to “the Campus Community,” there is a potential budget shortfall of approximately $8 million for this fiscal year.

Graham’s letter, published on Oct. 23, addressed concerns over the shortfall.
The amount of the potential shortfall “was determined by using our known enrollment/net tuition results to-date and forecasting the spring semester and upcoming summer period from the existing results,” Graham wrote.

Some strategies listed for eliminating the potential shortfall are deferral of capital investments, selective delays in hiring — including of a chief diversity and inclusion officer — and limited use of gift funds designated for departments or programs.

“All of these actions are one-time in nature, and therefore, resolve the shortfall for FY15 (fiscal year 2015) only,” Graham wrote.

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Graham, pictured here in 2007, outlined details of the budget shortfall he announced in September.

The administration will also be focused on “setting and achieving realistic enrollment targets” to set a balanced budget for fiscal year 2016, Graham noted.

This budget shortfall is not $8 million below last year’s budget; rather, it is a shortfall compared to the fiscal year 2015 budget goal.

“We do anticipate a net tuition revenue shortfall compared to our current-year plan,” Chief Financial Officer Beth Amyot and Chief Academic Officer Scott Chadwick said in an email. “We are adjusting expenditures, however, to result in a balanced budget. No across-the-board cuts or reductions-in-force are planned.”

Administrators have also noted that this is a common issue for many American universities.
“Managing enrollment and financial aid are important issues,” Amyot and Chadwick said. “Many universities across the U.S. are dealing with financial pressures, often connected to enrollment and financial aid.”

Amyot also presented on the shortfall, among other topics, on Oct. 27 to students, faculty and staff in Kennedy Auditorium. She elaborated on the potential shortfall, noting where the shortfalls originated.

“Of the $8 million, about $3.5 million is attributable, over the course of the year, to the projected graduate enrollment shortfall. About $2.5 million, just a little under $2.5 million, is attributable to overspending and financial aid. And the other $2 million is projected under undergraduate tuition enrollment and shortfall,” Amyot said.

Amyot also contextualized the potential shortfall, noting that the overall fiscal picture of the university looks positive for the last year.

Xavier’s endowment grew by $20 million in the last fiscal year, outperforming even Ivy League universities. The university also successfully refinanced debt in the recent past without lowering its credit score.

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Chief Financial Officer Beth Amyot

Graham first announced the pending shortfall for this fiscal year at the University Convocation on Sept. 8, but did not offer any numbers during the presentation to students, faculty and staff. At the time, administrators did not have clear figures “because of a variety of reasons,” Graham said.

Last academic year, many faculty were upset by an unexpected budget shortfall. This year the administration is attempting better communication strategies, as both Graham and Amyot have noted.

Amyot’s forum on Oct. 27 was new for the university. “It is also part of a larger communication initiative that I launched just this semester at the suggestion of some others,” to augment Amyot’s “standing offer” to discuss financial issues with faculty and staff, Amyot said. “I’ve been looking forward to this forum since last spring when we decided to do it.”

Dr. Lynda Kilborne, chair of Faculty Committee, believes communication has improved this year, despite Graham’s failure to communicate numbers during the University Convocation.

“I think communication has improved significantly, on all fronts, and it continues to do that, but it’s something we continue to work on, too,” Kilborne said. In regard to shared governance of the university between administration and faculty, “we do have, I think, a much better effort toward communicating about (shared governance) and about everything else.”

Faculty asked questions about the priority of athletics facilities and a new recreation center during the forum. Faculty and staff also asked what staff hiring would be deferred and when laboratories would be expanded and updated.

Graham’s letter can be found at BudgetUpdateLetterFINAL.pdf.