Wharton faces sizable deficit for fiscal year

and STEPHEN GLASS The Wharton School expects to finish the current fiscal year with a $750,000 deficit, administrators told the Board of Trustees Friday. Two of the University's 12 schools -- Wharton and the Graduate School of Fine Arts -- project a deficit for this fiscal year, based on their financial standing after six months. GSFA is anticipated to run a $525,000 deficit. Administrators said that some of the reasons for Wharton's financial woes include firms pulling out of the executive education program at the Steinberg Conference Center because of an uncertain economy. But in a statement released by the Wharton administration, the business school's financial situation is "sound." "Executive education operations continue to make financial contributions to both the school and the University, even though, given the weakened economy, enrollments were softer than targeted," the statement read. Administrators added that Wharton's addition of faculty members last year have also placed strains on the schools' pocketbook. Stephen Golding, executive director of budget and planning, said last year's faculty hirings were supported by the University's administration. The Wharton statement also said the school's faculty hiring was within levels authorized by the University for the fiscal year. Golding added that the schools are currently looking at methods to rectify the situation. "The deans are looking at ways to reduce expenditures without impacting programs," Golding said. "In essence they are going to control spending and squeeze additional revenues out of their lines." "The deficit is manageable," Executive Vice President Marna Whittington said Friday. The schools may also use a multi-year budgeting plan to resolve the anticipated deficit, which administrators said may make balancing next fiscal year's budget difficult. The Wharton unrestricted budget is $57 million and GSFA's unrestricted budget is $12 million. Golding outlined several ways the schools could improve their financial situation, including borrowing money and transferring unrestricted spending to restricted spending if deemed appropriate. Spending is divided into two categories. Restricted funding, is dedicated to a particular project or program, while unrestricted funding can be used for general expenditures. "I'm not ready to say that any programs will be cut -- both deans have a long list of strategies to deal with these issues," Golding said. "But they probably will withhold those decisions until they have a clearer sense of the size [of the deficit's impact]." The Graduate School of Education has projected a $500,000 surplus this year and all of the other schools anticipate breaking even for the fiscal year. It is not clear what specific circumstances are causing the GSFA to predict a deficit. GSFA Dean Patricia Conway could not be reached for comment. A staff member said Friday she was out of the country. In other business, the Undergraduate Assembly made its annual plea to the Trustees to lower the rate of tuition increase. "[We're seeking] a long-term policy to keep tuition increases at a minimum -- not just an artificial remission from a steadily increasing trend," College sophomore David Chun said. "When the trustees commit to a long-term plan to lower the rate of tuition increase at Penn, the students will finally be free to explore and enjoy the academic opportunities that Penn is so famous for." Trustees said they would consider the students concerns, but that the University's financial condition, particularly its state appropriations, would ultimately dictate their decision.

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