Citing needs for increased resources for Dining Services and physical improvements around campus, Provost Robert Barchi highlighted the financial concerns that Penn will face in the immediate future at yesterday's University Council meeting.
In a presentation that recapped Penn's budget for Fiscal Year 2002, Barchi reported that the University's $3.2 billion operating budget had been expended over the academic year. Of the $3.2 billion, $1.54 billion is allotted for the school's academic budget.
Barchi said that for this current school year, the largest piece of the operating budget -- 54 percent -- went toward compensation for all University faculty, staff and employees. Much of the remaining budget was expended on maintaining the quality of the academic programs, research centers and student services at Penn's 12 schools.
The Medical School, College of Arts and Sciences and the Wharton School are allotted the largest portions of this money.
Moreover, Barchi pointed out the areas that had put the largest constraints on the University's financial status over the past year.
"The budget is a strained one in any given year, but we have a large number of academic needs," Barchi said. "We have major needs for undergraduate housing and dining, additional needs for undergraduate financial aid and continued investments that we have to make in our physical plant."
In addition to the continued demands that these expenses will place on the budget, Barchi said that the University's funding will be further constrained by the continued decrease in Indirect Cost Recovery, or government reimbursement for indirect costs not covered by the University's research grants.
Between FY 1991 and FY 2002, ICR has decreased from 65 to 58.8 percent, which means that Penn has had to allocate more money toward the overhead costs of research projects.
Barchi said that other financial constraints, including a proposed 7.2 percent decrease in the University's monetary appropriation from the Commonwealth of Pennsylvania, would also place a significant dent in Penn's budget for future years.
Looking ahead to the next five years, Barchi recommended the need for careful planning when considering these additional demands on the bank account.
"We need to be more attentive to how we spend our dollars and whether we get a revenue from them, and we need to be more efficient in our administrative centers," Barchi said. "At the level of our schools, our deans need to be more cost-conscious in making... very clear priority decisions about where their dollars are spent."
On top of continuing with ambitious fundraising and developmental efforts, Barchi also said it is imperative that the University continue to build relationships with the private sector.
"We have to be very creative about our partnerships with the University in the private sector and work out ways of getting other individuals and parties to spend money on things that Penn needs to do so that our own core resources can be used for academic priorities," Barchi said.
Despite the looming financial constraints that the University will experience in the near future, Barchi did note that it is not particularly unusual for a large-scale university to have a limited budget.
"We're always in a capital- and cash-constrained environment -- the more money that we have, the more that we would be able to do," Barchi said. "We're not in a situation where if we did a little better we would put money in the bank, so we have to look at it from that point of view."
In his presentation, Barchi also reviewed the 4.6 percent increase in student charges for the 2002-2003 academic year, which will total to $36,212. Compared to Penn's peer institutions, Barchi claimed that this rise in tuition and other costs was not unreasonable.
"We believe that our tuition policy is a moderate policy," Barchi said.
Following Barchi's review of the University's finances, Vice President for Facilities Services and Real Estate Services Omar Blaik made a brief presentation on recent developments with regard to the physical aspects of the University.
Blaik highlighted the remodeling of the Left Bank Apartment Complex, the new banner program on public streets and the creation of more open public spaces around campus as visible signs of the University's progress in this area.
Blaik also said that the creation of the Woodland Walk, a new sidewalk that spans across Hill Field to the corner of 33rd and Chestnut streets, had successfully linked Penn to the surrounding community.
"Woodland Walk made a connection to 30th Street Station and Drexel much closer," Blaik said.
The meeting ended with a brief update on increased collaboration among student groups to organize events for the University community.
Vice Provost for University Life Valarie Swain-Cade McCoullum commended campus organizations for working with each other to enrich the University with programming efforts like the West Philadelphia Tutoring Project, the Foundation and the Civic House Campus Community Dialogues.
"Student leaders across the University as well as a number of divisions and offices have dramatically increased the number of collaborative co-sponsored social and educational events on campus," McCoullum said. "I want to compliment every student organization for changing the way that they have interacted over the past year."
