Financial results – funding basis

The funding basis in essence represents committed cash. A positive balance, or funding surplus, represents uncommitted cash, and a negative balance, or funding deficit, represents over committed cash. The actual funding surplus for 2014-15 of $7.514 million is before year-end discretionary appropriations for reinvestment in the University to cover off historical deficits, potential unplanned costs with previous capital projects, or one-time funding supporting academic priorities. When the 2014-15 funding budget was originally established, we estimated a funding deficit of $3.221 million. To the whole University community, congratulations and thank you for your commitment to eliminating the deficit. This said, we know going forward we still have our fiscal challenges. As highlighted in the 2015-16 Budget Report, enrolment remains a key concern, and our financial framework remains with expense growth of 3.01 per cent and revenue growth at 1.97 per cent. Recognizing these challenges and the fact we just finished the year with a surplus which was slightly greater than two per cent of the total budget, the logical question is – are we at least moving forward with a head start on the structural financial framework deficit? Unfortunately the answer is likely not as much of a head start as we might like to think. While there is no one reason for the funding surplus in 2014-15, the following are some of the specific drivers of the surplus on a budget to actual basis:

1. One-time adjustment to recognize revenue of $1.7 million previously deferred several years ago in error.

2. One-time lawsuit settlement revenue of $0.6 million.

3.Lower pension payment requirements of $3.5 million following an updated actuarial pension valuation that was completed with an effective date of July 1, 2014, which put the plan as almost fully funded.

4.Unwinding of internal financing resulting in $1.4 million less expense.

5. Filing of an HST (Section 211) claim resulting in $0.4 million of revenue.

6.Lower than budgeted spending on part-time teaching of $0.9 million across all

Teaching Faculities.

7. Lower than budgeted repair and maintenance spending, especially by the

Department of Residence of $0.6 million.

It is important to note that we started the 2015-16 budget process with a projected deficit of $17.9 million. Many of the items identified above are either one-time or have already been adjusted and worked into the fiscal 2015-16 budget which, when approved, still required $3.9 million in mitigation. As we move through fiscal 2015-16, budget developers across the University will continue with their second-quarter reporting at the end of October and third-quarter at the end of January to provide updates on the University’s financial health which will be informative to the 2016-17 budget preparation.