The budget for the 2021 fiscal year was created with the assumption that the COVID-19 pandemic will have concluded by fall 2021. When initially creating the budget, there was an expectation of a 4.1% decrease in the State Share of Instruction, or SSI.
A higher number of graduates results in more funding from the SSI, which may be affected due to a decrease in undergraduate enrollment and tuition over the past year.
This enrollment decrease has also had an effect on the university’s revenue, as undergraduate student tuition is the primary source of funds. The loss of room and board payments due to removing students from campus in March created the largest financial impact of COVID-19.
E-learning net tuition has steadily decreased since fiscal year 2017, mainly due to fewer enrollments and graduates from the Registered Nurse to Bachelors of Science in Nursing (RN to BSN) program. However, there has been a 6% increase in other online programs.
Although it is expected that COVID-19 will subside during this year, it is estimated that there will be a loss of about $1 million per week if students return to all-online instruction.
Additionally, the university awarded excess financial aid during the Fall Semester as an attempt to help students being affected by the pandemic. The university experienced a $46,543,042 impact due to COVID-19, excluding insurance recovery.
A recent cash flow forecast that includes CARES Act funding will be reevaluated since the release of the funding guidelines Thursday.
As of Jan. 13, Ohio University plans to increase the budget for COVID-19 testing, as it is now working with Ohio Health, Vault Health and CVS.
Audit and Risk Management Committee
The OU Board of Trustees was informed Friday two audits have already been completed, and all other audits are on track to be completed by the end of the fiscal year.
Both the Treasury Management and the NCAA Agreed Upon Procedures audits have been completed, while audits being done on regional campuses are still in progress. An ICA Compliance Audit and Institutional Research Audit are both planned.
“With only two audits left for the second half of the year, there may be a need to add an additional audit,” interim Chief Audit Executive Mary Ann Boyle said.
Christine Torres from Crowe LLP, the university’s external audit firm, reported the financial statements from the university have been finished as well as all various reports that have been filed and accepted by the auditor of state.
Torres said the NCAA procedures have been finalized, and Crowe will be issuing and submitting that report Friday to the auditor of state. The Ohio Media Center report has already been finalized and submitted, Torres said.
Torres also said Crowe is in the final review stages of a full report for CARES Act funds received by the university. OU has been working with the committee to finalize all the details before completion.
“There were no audit findings through the financial reporting process, so we had no material weaknesses and no significant deficiencies through that process with our draft reports,” Torres said.
Audits for the following fiscal year are already being planned and will be started following the completion of the final audits for this year, Torres said.
“As we finish this, we’ll be beginning and talking about next year’s audit and setting up the schedule and getting the requests ready for that,” she said.
OU also named Marion Candrea as the new chief audit executive.
“I’m really thrilled to be joining Ohio University and this warm and welcoming community,” Candrea said.
Deb Shaffer, senior vice president for Finance and Administration, also opened the floor to trustees for questions about the Enterprise Risk Management Project.
Main Board Meeting
Leadership updates across the Athens and regional campuses were presented by OU President Duane Nellis during the Main Board meeting.
New deans on the Chillicothe campus, Eastern campus, Lancaster campus and Zanesville campus were recognized. On the Athens campus, Jackie Ulmer will be the new College of Business dean, effective Feb. 1. John McCarthy is currently serving as the interim dean of the College of Health Sciences and Professions as of Dec. 9, 2020.
Nellis spoke about his focus for the 2020-2021 year, which includes budget and minimizing impact on financial reserves, managing enrollment and brand development, growing the student retention rate and focusing on diversity and inclusion for underrepresented students.
Nellis also spoke about the plans for the Spring Semester and COVID-19 testing.
All students who will return to campus were required to take a mail-in COVID test. The about 3,200 students residing on campus will be tested weekly, and students who will be living off-campus in Athens will be tested biweekly, Nellis said.
The new Heritage College of Osteopathic Medicine building, Heritage Hall, will be the site of a partnership between OU and the Athens community for COVID-19 vaccines. The building is spacious enough that multiple residents can receive their vaccinations at the same time.
“It’s really perfect for providing large numbers of the public to come through and get vaccines,” Nellis said.
Nellis also recognized a number of students, faculty and alumni for various accomplishments and achievements in their respective fields during the meeting.
Media Availability
Ohio University’s budget shows that over the next several fiscal years, the university will be pulling money from reserves that would not be covered by the cash flow forecast by the university. If that remains the case, the amount left in the reserves will continue to diminish.
University administration said plans to reduce costs and pull less from the reserves are being worked on, and they are considering many options. A specific plan has not been chosen yet.
“Right now, we have a tremendous number of options to try to understand what the impact would be on our employees, on the university, on our operation,” Shaffer said. “Every one of our areas is currently looking both academic and administrative about efficiencies and necessity.”
Additionally, to try and close the gap between spending and cash flow, the university is looking at a 0% increase in raises for staff, excluding staff who are currently under a bargaining agreement.
“Our assumption is that there will be a 0% raise,” Shaffer said. “Certainly that can change, but that is the assumption that is currently in our budgeting information.”
Trustees also said the decrease in tenured track professors was not caused by layoffs, as the university did not lay off any tenured track faculty. That reduction is the result of voluntary separation and the retirement plan.
Bekah Bostick, Lydia Colvin, Anna Millar and Emma Skidmore contributed to this report.
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