University of Calgary

University of Calgary financial statements for 2011-12

UToday HomeJuly 13, 2012

The University of Calgary’s financial statements for the fiscal year ended March 31, 2012 were approved last month by the Board of Governors.

“Because of the hard work and dedication of our faculty and staff, the University of Calgary is in sound financial health and has made significant progress in improving its financial controls,” says Jonathan (Jake) Gebert, vice-president (finance and services). “But the university faces real financial challenges ahead.”

Even with the two per cent increase in the university’s operating grant from the Government of Alberta for 2012- 13, the university is projecting that expenses will increase faster than revenues. Future operating expenses are projected to increase four to five per cent overall per year, while revenues are expected to increase about two per cent, resulting in an ongoing operating shortfall.

In preparation for projected operating shortfalls, the university made specific spending decisions in 2011 -12 to build a one-time “savings account” for future years.

“We planned to end the year with an excess of revenue over expenses and have rebuilt our one-time contingency fund,” says Gebert. “This contingency fund is one-time dollars only, not ongoing operating monies, so it can’t be used for ongoing costs such as salaries and benefits.”

The financial statements show that the excess of revenues over expenses was $93 million for the fiscal year ended March 31, 2012. Of this excess, $68 million has been set aside as a one-time savings account for internally-funded teaching, research, capital and other activities – for example, the university is making a major investment in IT infrastructure, and supporting specific faculty-led one-time projects, all to support teaching and research.

The remaining $25 million has been added to the university’s Unrestricted Net Asset balance to ensure that the university has one-time contingency for unforeseen spending requirements such as major building repairs, or unforeseen reduction in revenue such as a decrease in investment income due to fluctuations in the market.

Adds Gebert: “It is sound financial management to always have a contingency in an organization’s budget. In the past, the University of Calgary did not always have a contingency, which led to budget and staff reductions. “

The university has also made a great deal of progress in improving its financial controls. A June 1, 2012 report from the Office of the Auditor General of Alberta (OAG) received by the university’s Audit Committee noted that several specific recommendations from past OAG public reports have been implemented by the university, including the improvements to the effectiveness of the university’s overall control environment.

“Strong financial controls are the foundation of our future financial health, which will allow us to achieve our Eyes High goals,” says Gebert.

 

The Comprehensive Institutional Plan, the Academic Plan and the Research Plan will guide the allocation of financial, human and capital resources over the next several years in order to achieve the vision of Eyes High and the academic and research goals of the university.