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Archive for Sunday, October 16, 2011

KU funding, by the numbers: Research income largest slice of budgetary pie

October 16, 2011

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As Kansas University officials continue to undertake efforts to spend less, here’s a breakdown of where KU gets its money. These percentages are from the 2010 fiscal year, which ended in June 2010 (2011 fiscal reports haven’t been fully compiled yet), and include all KU campuses (including KU Medical Center).

23 percent — grants and contracts

This area now constitutes the largest single source of income for the university.

Steve Warren, vice chancellor for research and graduate studies, said the percentage likely reflects the steady growth — “not spectacular, but steady,” he said — of external research funding in the past few years.

Looking at preliminary data for 2011, Warren said he expected that external research funding would again rise to record levels.

“This is one area we’ve continued to grow in,” he said.

However, he said it’s important to remember that nearly all of this type of funding is locked in for specific uses. It can contribute to the teaching mission, by paying for salaries for graduate students, but use of the money is highly restricted.

“It’s a wonderful story, but it doesn’t mean we have a whole bunch of money sitting around that we can do whatever we want with,” Warren said.

22 percent — state appropriations

The state’s contribution to education continues to shrink at KU, having fallen by more than $4,300 per full-time student, adjusted for inflation, since 1985.

“Obviously, the trend of the last 20 years is not what you want it to be,” said Ed McKechnie, chairman of the Kansas Board of Regents.

He said he served in the Legislature for 10 of those 20 years, and on the appropriations committee for four of those years.

“The message that the university delivers just gets lost,” he said. “We need to find out how to communicate that better. If we don’t, we’re going to be destined to live with the same problem.”

The state in recent years has been pretty good at funding what McKechnie called “the boutique things” — such as the job-creating efforts in the School of Pharmacy and School of Engineering.

“The problem is you’ve still got to have kids who can read, do math and chemistry,” he said. It won’t be easy, he said, to reverse the trend.

“If I didn’t think there was a chance, I wouldn’t be serving on the board,” he said. “The goal is to miss the icebergs and not to hit them.”

20 percent — tuition and fees

Tuition comprises the third largest source of revenue for KU overall, but if only taking into account the Lawrence campus, tuition long ago surpassed state funds, said KU Provost Jeff Vitter.

In Lawrence, $248 million came from tuition revenue, and $134 million came from the state.

“That’s the unfortunate reality,” Vitter said.

Tuition costs have increased each year for many years, and more increases are likely as KU needs to maintain an amount of tuition increase in order to sustain its four-year tuition compact.

“We’re trying to be as good stewards as we possibly can,” Vitter said, saying that KU has undertaken a study to try to find new ways to cut costs.

Also, the school needs to increase its enrollments to find more tuition revenue, he said.

“We have the capacity for more students, and failure to have the proper enrollments is really costing the university in terms of the income to pay for the educational mission,” Vitter said.

13 percent — auxiliary enterprises

This area includes money from all of the different revenue entities that go to KU. It includes money from areas such as housing, parking, Kansas Athletics (for student scholarships), Watkins Health Services and KU Memorial Unions.

10 percent — KU Endowment support

The total amount of the KU Endowment Association’s support to KU will likely increase during an upcoming comprehensive campaign, said Dale Seuferling, KU Endowment president.

“We do expect that the dollar amount from KU Endowment would increase during the campaign, but it would be hard to predict whether the percentage of support would change dramatically in relation to other revenue sources,” Seuferling said in an email.

7 percent — other revenues

This area includes areas such as nonendowment gifts that are made directly to the university. These can take the form of in-kind donations, or any donation that a donor gives to a unit directly rather than to KU Endowment.

5 percent — sales and services of educational departments

This includes revenue from summer camps, study abroad programs and sales of supplies to research departments.

Comments

yourworstnightmare 3 years, 2 months ago

"Tuition comprises the third largest source of revenue for KU overall, but if only taking into account the Lawrence campus, tuition long ago surpassed state funds, said KU Provost Jeff Vitter."

So, KU Lawrence gets $134 million from the state and brings in $248 million in tuition, yet for KU overall state appropriation is a higher percentage.

This must mean that the KU Medical Center brings in very little tuition and other revenue relative to state appropriation.

ahyland 3 years, 2 months ago

KUMC is definitely much more reliant on state funds than most regents institutions. I've written a bit about this in the past...

yourworstnightmare 3 years, 2 months ago

Indeed you have. Thanks.

KUMC has traditionally been at the bottom of medical schools in terms of research grants. It is getting better, but has a long way to go to be comparable to peers such as Iowa and Nebraska.

The Cancer Center is helping, but is has been a multi-million dollar investment of state and private funds.

thinkinganalytically 3 years, 2 months ago

I think it would be interesting to break the budgets out for each campus, and possibly for each school on each campus. Apparently the School of Engineering and School of Pharmacy on the Lawrence campus get higher level of state funding, suggesting that the other schools on the Lawrence campus, the giant College of Liberal Arts and Sciences for example, get very little state support.

Chip McConnell 3 years, 2 months ago

I believe that KU will need to raise tuition and raise more Endowment funds in order to maintain a quality education. I further believe that KU should have a consolidated independent financial audit in order to ensure that available funds are used appropriately. It's hard to believe that KU hasn't taken this basic financial management step that other Universities took decades ago.

yourworstnightmare 3 years, 2 months ago

This is currently happening. The Huron Group is doing just such an audit.

yourworstnightmare 3 years, 2 months ago

This is great news that KU continues to get better in attracting outside research funds.

Like it or not, this is the future. The state will continue to cut funding for KU, so KU wil need to be entrepreneurial in finding funds.

KU will need to continue to invest in research, and it will likely need to raise tuition.

The state and the people of Kansas are telling KU that it must be self-reliant and self sufficient. Raise tuition, aggressively pursue private donations, and continue investing in research. This is the only way that KU will survive, let alone improve.

Chip McConnell 3 years, 2 months ago

Hopefully the Huron Group is performing a consolidated financial audit for KU. Usually the Huron Group performs managerial assistance work, particularily in the IT area. If the Huron Group is performing KU's first consolidated financial audit, it should be completed and published by 12/31/11 - since that's six months after KU's 06/30/11 fiscal year end. Timely publication of financial results is very imporant and six months should be sufficient time, assuming that management's draft consolidated financial results are properly prepared.

Steve Bunch 3 years, 2 months ago

I may be mistaken, but I don't think the Huron Group is doing a financial audit. I think they've focused on operational efficiency, duplicated services, etc.

yourworstnightmare 3 years, 2 months ago

You are correct, but this has obvious financial implications. Duplications and inefficiencies can be solved by budgetary means.

newmedia 3 years, 2 months ago

Does anyone have a rough estimate of the balance in the Endowment funds?

ahyland 3 years, 2 months ago

The market value of KU Endowment's endowed funds ended the 2011 fiscal year at $1.25 billion.

The value of its total assets — which includes real estate, etc. — ended the 2011 fiscal year at $1.65 billion.

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