Interim MU Chancellor releases plan to address $20 million budget shortfall
This week Interim MU Chancellor Hank Foley announced funding to address the approximate $20 million budget shortfall will come from the university’s reserves.
This comes after Governor Eric Greitens restricted state funding from higher education institutions for fiscal year 2017.
Foley says the reserves are decentralized across hundreds of accounts throughout the university.
The interim chancellor released the following list of budget guiding principles:
The FY17 budget shortfall will be backfilled using cash on hand (available reserves) rather than paying it down in future years with future revenues. We will use a formula that takes both reserve balances and General Revenue Allocation (GRA) received to calculate how the responsibility for covering the shortfall will be assigned. We will include resources held in unrestricted operating accounts as well as those in unrestricted plant funds that were carried forward from FY16 into FY17 in making the calculation formula for the reserves aspect. We will use the net amount of positive and negative balances for each C/S/D, i.e. all account balances will be in the calculation, not just those with a positive value. For the GRA component of the calculation we will include FY17 general revenue allocations (GRA). Reserves and GRA will not have equal weight in the calculation formula. We will assign 70 percent of the weight to reserves and 30 percent of the weight to GRA. Auxiliaries are to be included in calculating the amount collected from all units and will be treated the same as academic and other campus units. The Hospital, as a separate business enterprise in many ways, will provide support in assisting with the shortfall, but the amount will be determined through a discussion with what is reasonable given the different demand in that industry to hold cash on hand. The General Revenue allocated for campus based scholarships, fellowships and waivers is exempted from the GRA part of the calculation. A number and the details on how it was calculated will be given to leaders at the College, School, Division level indicating the amount of the shortfall that will be their responsibility to cover. From there, CSD leaders can use our principles or their own set of principles to determine how they will arrive at their number.
Foley says these principles will be used to determine the contributions for each college or division. He says the principles will only apply to fiscal year 2017 and that discussions on how to address fiscal year 2018 are in progress.
