I took a few moments to glance through some recent University
of Alberta annual financial statements which
are provided here. Basically, I was
interested in the difference between revenues and operating expenses. My results are presented in the table
below. It shows that the University
reported operating deficits (which occurred when expenses exceeded revenue) in
only two years (2008 and 2009). It
should be noted that for accounting reasons these numbers do not include an
accumulating debt related to maintenance costs.
As well, it does not include the University’s plan to operate with a
deficit for the next three years as it implements a plan to balance its
budget. The minister is apparently
unhappy with this three year plan, desires the university budget to be balanced
earlier, and is spending $70,000 on external consultants to help achieve this
goal.
Report Year
|
Revenue
|
Expenses
|
Revenue Minus Expenses
|
2006
|
$1,123.0
|
$1,124.5
|
$57.3
|
2007
|
$1,205.9
|
$1,191.9
|
$65.8
|
2008
|
$1,228.5
|
$1,327.4
|
-$42.0
|
2009
|
$1,344.4
|
$1,487.5
|
-$67.6
|
2010
|
$1,606.7
|
$1,593.2
|
$13.5
|
2011
|
$1,644.7
|
$1,569.6
|
$75.2
|
2012
|
$1,690.9
|
$1,679.1
|
$11.8
|
2013
|
$1,727.8
|
$1,702.4
|
$25.4
|
Revenue and
expense information from recent financial statements available from the
University of Alberta website. All
values are in millions of dollars.
|
The table suggests that the University was able to rebound
from this unfavorable impact relatively quickly; its ability to adapt was due
to its ability to find ‘administrative efficiencies’. It is still doing so in light of the March
budget’s surprise cut in postsecondary funding.
For example, the 2013 financial statement states: “The $25.4 million
operating surplus is mainly due to savings at the unit level which have
occurred as units reduce spending to assist in meeting their 2013-14 operating
budget reductions.” Given this kind of
information, it is perhaps not too surprising that the chair of the board of
governors is confident of the result of external scrutiny.
Of course, the provincial government has not been as successful in dealing with the financial upheaval of 2008. As obvious in the image below, which the Calgary Herald included as part of a story on the 2013-14 provincial budget, 2008 marked the start of an unbroken string of provincial deficits. A nice synopsis this string is provided in this story by CTV News. The cost of recent flooding in the province will hardly help this situation. It seems to me that hiring the consultants is a case of an encrusted kettle calling a clean pot black.
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