Less than one half of one percent of the University of Wisconsin Oshkosh’s 2012 fund balances and reserves were “undocumented,” while the remainder of the institution’s $27.2 million total was 1.) “planned” for 2.) “designated,” for and 3.) “obligated” to for specific academic programs and campus initiatives or was 4.) in “reserves.”
That’s according to a recent, 25-page state Legislative Fiscal Bureau (LAB) audit of campus and UW System fund balances and reserves statewide. The audit validated a report UW Oshkosh developed and documented in April (see the report here) as concerns over the appropriate levels of and uses for UW institutions’ fund balances emerged. Monies that some critics labeled “slush funds” are, in fact, almost entirely committed to specific UW Oshkosh programs and strategically-planned initiatives. In UW Oshkosh’s case, fund balance is dedicated to, but not limited to, things as critical as planned University police radio system upgrades, the successful “Student Titan Employment Program” (STEP) internships and the campus’ Undergraduate Advising Resource Center.
“Our April assessment of fund balance and reserve designations and commitments is affirmed by the LAB’s recent report,” UW Oshkosh Chancellor Richard Wells said. “Months ago, we were adamant that our numbers, our forward-looking stewardship and precise documentation demonstrated that our fund balances and reserves at UW Oshkosh were being responsibly managed. The new audit findings validate that. The LAB’s report also helps create a new and uniform reporting system that, now and moving forward, will help us more clearly and succinctly share with stakeholders what a good job our campus community is doing to leverage fund balances and reserves to propel and protect this institution of more than 13,500 students and 1,700 employees.”
Wells emphasized the LAB audit’s categorization of a mere .4 percent of UW Oshkosh’s $27.2 million total in reserves and fund balances as “undocumented.”
“I am usually the last to compare an organization as complex as our University to an everyday household, but in this case the analogy is appropriate,” he said. “Just as a responsible family keeps close watch on its checking, savings, emergency and future or planned-purchases accounts, so do we closely monitor and regularly balance comparable, UW Oshkosh accounts. A family may have, for example, rent, utilities and other costs specified in a budget. After that funding is accounted for, there may be a few hundred dollars remaining. At the end of the day, the LAB found we had $136,000, or .4 percent of our total $27.2 million in fund balance and reserves, ‘undocumented.’ Better said, that money is yet to be committed. So, we are reconciling our checkbook to account for plans for these yet-to-be committed funds. Relatively, it is a miniscule amount compared to the $250 million in budget transactions this institution is annually responsible for.”
Beyond its detailing of the undocumented fund balance amounts, the LAB’s “Level of Commitment for University of Wisconsin System Program Revenue Balances” report also found:
- 40.5 percent of UW Oshkosh’s “program revenue balances” were “planned.” This means balances are held for a purpose as indicated by documentation, such as a budget document or a memorandum signed by the Chancellor. Institutions may use planned balances for other purposes if the use complies with any funding source requirements. An example of a UW Oshkosh planned commitment in this category is the $650,000 from General Receipts to continue the STEP in FY 2012-13.
- 38.2 percent of the balances were “designated.” This means balances are held for purposes related to the original funding source, but for which documentation of an obligation or specific plan was not provided. Institutions may use designated balances for other purposes only if the use complies with funding source requirements. Examples at UW Oshkosh include academic student fee balances related to differential tuition, which supports the Undergraduate Advising Resource Center, our Counseling Center, Career Services and other student programs.
- 9.8 percent of the balances were “obligated,” or found to be most committed. These balances are held for a purpose as indicated by documentation such as a contract or an encumbrance that would make it difficult for institutions to easily use the balance for other purposes. Two examples: $78,000 from General Receipts planned for purchase of a University Police radio system upgrade and $1.2 million in Cooperative Academic Partnership Program (CAPP) contracts. The CAPP gives a growing number of qualifying high school students in the area and region an opportunity to earn college credit through high-quality, collaborative academic programs in their native districts, reducing their time to degree.
- 11.0 percent of the balances were in “reserves,” meaning they are held for emergencies, from unexpected and sharp declines in student enrollment to fiscal crisis that might befall the state.
“Overall, the LAB’s audit and the hard work that went into it are appreciated,” Wells said. “The results are a testament to the precision and quality work of our UW Oshkosh administrative services team and broader campus community, which routinely monitor and rigorously review and report out our financial status. We are all doing the right thing to support our students and our academic mission.”
- To see the full “Level of Commitment for University of Wisconsin System Program Revenue Balances” report, click HERE.