Despite a recession that wreaked havoc on many public institutions and a still-sluggish economy, Indiana University is in very good shape, interim chief financial officer MaryFrances McCourt said Thursday.
“We have a very strong financial history,” she said, joining with university controller Joan Hagen to present fiscal year-ending figures to the university trustees.
That doesn’t mean everything is rosy, however, she cautioned. “We know we are not immune from the new normal,” she said, citing widespread opposition to tuition increases among factors that will challenge the university’s finances in the coming years.
The good news clearly was positive from an administration standpoint. The university’s general fund balance increased 11.2 percent from the year’s beginning fund balance, thanks to higher enrollment at most of the seven campuses IU administers, and cost efficiencies gained in areas ranging from procurement to delays in filling vacated positions.
Student fee income exceeded budget projections by $8.9 million, or 1.2 percent, on the Bloomington campus, which enabled the university to put more money into rehabilitation and repair projects — a campus and systemwide priority.
Areas of concern include enrollment declines at the Maurer School of Law (following national trends) and the Jacobs School of Music.
Enrollment declines at the South Bend and Southeast (New Albany) campuses also were flagged for scrutiny by university administration and the trustees.
Additionally, financial losses by IU Press ($449,000), South Bend housing and the Bloomington golf course ($498,000) were cited as areas of concern. The golf course now has a cumulative deficit of $4.1 million.
The “new normal” McCourt described includes not only pressure to minimize tuition increases but decreased household wealth, the national focus on student debt, the downward trend in state appropriations, declines in research funding and investment volatility.
At one point in Thursday’s discussion, Trustee Thomas E. Reilly, who is slated to become chairman of the board at Friday’s meeting, said, “We are no longer a state institution.” Reilly said IU needs to be modeling itself after private universities in view of state support accounting for just 11-12 percent of the operating costs on the Bloomington campus.
“Maybe the most valuable thing we can do is have a $4 billion endowment instead of a $1.2 billion endowment,” Reilly said.
The “new normal” McCourt described also included projections that most revenue sources will remain relatively flat over the coming years while health care costs will continue to rise at what she called a conservative estimate of 6-7 percent annually.
SO YOU KNOW
• Enrollment at Indiana University Southeast in 2012 was 6,904, down from a record of 7,256 students in 2011.