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Fiscal year will end with a balanced consolidated budget

Elmira Mangum
Mangum

On June 30, Cornell's Ithaca campus will end its fiscal year with a balanced consolidated operating budget, only four years after the university's structural deficit stood at $148 million and was expected, if no action had been taken, to grow to more than $215 million by 2015.

"The achievement of a balanced consolidated budget could not have happened without the contributions from strategic, campuswide initiatives to reduce administrative cost and budget reductions shared by all units across campus," said Vice President for Planning and Budget Elmira Mangum. "President David Skorton, Provost Kent Fuchs and I are proud and thankful of the effort of the entire Cornell community to help strengthen our fiscal house for the future."

Significant factors involved in bringing the budget into balance have included a staff retirement incentive program (in 2009) together with job actions that reduced the university's workforce; a reduction in unit reserves to pay off long-term debt; the commitment to no new debt and no increased cost without increased revenue policies; reduced central administration commitments; pauses in new hiring and construction; discretionary base budget reductions; administrative streamlining; and organizational restructuring. Equally important have been the increases in revenue gained through alumni support in the annual giving program, the recovery of the university's endowment and increases in tuition and fees.

Two programs -- the new budget model and the Administrative Streamlining Program (ASP), coming out of the strategic planning effort dubbed "Reimagining Cornell" led by Fuchs beginning in 2009, will help prevent future budget imbalances, while allowing the university to continue to pursue its major priorities. And the ASP already has been an essential component in helping balance the budget, said Mangum.

The ASP, which consists of seven cost-cutting initiatives, was designed to examine ways to create a more lean university while retaining academic excellence. In the administrative and service arena and under the leadership of Skorton and Fuchs, the campus community worked with consultants to identify cost-saving opportunities and management strategies to improve the efficiency and effectiveness of support operations and services across the university. Carrying out these opportunities and strategies is expected to provide more effective service delivery, campuswide, and reduce operating costs by an estimated $75 million annually by FY 2015.

"This continues to be a campuswide effort, and only through full participation by all units and the continued strong commitment by the senior leadership team will we be successful," said Mangum. "The campus has made steady progress in several initiatives, and we remain committed to achieving all of our goals, and in particular, to providing even more effective service and achieving the financial savings targets that will help with the already implemented budget reductions."

"The ASP's initiatives represent a fundamental shift in the delivery of services, from which -- with everyone's participation -- the campus will continue to benefit for years to come," said John Adams, who was appointed in 2011 by Mangum to lead the ASP office.

The ASP office has the objective of overseeing and monitoring universitywide efficiency improvements and ongoing cost reductions, while ensuring that administrative support functions work effectively. Through FY 2013, $59.2 million of identified costs have been cut from the university's operating budget through ASP initiatives.

"I am confident that the new budget model and our strategic planning efforts will enable us to meet our budget goals," said Fuchs. "The discipline coming from these processes is our insurance."

 

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