WSU begins new fiscal year with $7.8 million surplus
Operating deficits ranged from $25 to $30 million during 2014, 2017 fiscal years
September 2, 2019
WSU officials announced on Aug. 26 that the operating budget for the 2019 fiscal year began with about a $7.8 million surplus, meaning the university is no longer using money from reserve accounts for the first time in about six years.
Since fiscal year 2013, the University has been depleting its central reserves, or its “savings”, due to multiple investments like the SPARK building, the Museum of Art, and the new campus in Everett, WA, according to the fiscal health website. The University also invested in the Elson S. Floyd College of Medicine.
“Even though the state has come through with funding for the medical school, all the start-up of that, we funded from our savings,” Kelley Westhoff, executive director for budget, planning, and analysis at WSU, said.
With these major investments, the University had to tap into its central reserves, causing its savings to decline by 56 percent, or $115 million, according to WSU’s Budget Office in 2017.
“The earlier administration was spending much more money than we were bringing in, in revenue… but the challenge was we just did them all at the same time,” Phil Weiler, WSU vice president for marketing and communication, said.
During the fiscal years 2014 to 2017 alone, the University had “operating deficits ranging from $25 to $30 million annually,” President Kirk Schulz said in his campus-wide email on August 26th.
Weiler said a Fiscal Health Advisory Committee was developed to address this financial problem. The committee is responsible for proposing budget models and help develop strategies to decrease spending and increase revenue. It is composed of students, faculty, and staff members. Westhoff and Weiler are committee members as well.
A new budget model is currently under development and is being led by Provost Mitzi Montoya and Stacy Pearson, vice president for finance and administration. This new model will help make financial information more readily available and accessible.
“Changing budget models is a big process, but we’ll be doing lots of analysis,” Westhoff said. “That’s what we’re starting to do, but that will be a multi-year process to make that full transition.”
A 3-year fiscal healthy recovery plan was also put in place. The University had to decrease its spending or increase its revenue by 2.5 percent every year, from fiscal year 2018 to fiscal year 2020.
“We’re still going to continue that fiscal recovery, or that fiscal health plan, for year three even though… we’re in the black, because that will then allow us to help rebuild those reserves,” Weiler said.
A new financial system, Workday, will be launched by the University. It is also known as the modernization project. This new system will be replacing the University’s 30-year-old system.
“Basically, we’re going to leapfrog five or six generations of technology to be able to get us to a place where now we’re going to have really instantaneous access to financial and personnel information,” Weiler said.
The University is implementing various strategies to continue this financial progress. Aside from decreasing its spending, Weiler said the University is hoping to increase its revenue by providing diverse educational opportunities to both traditional and nontraditional students.
Rebuilding the central reserves and making wise investments are also key strategies in this process, he said. Addressing deferred maintenance projects is another strategy. Weiler said that looking at WSU’s various campuses as an integrated system will help people make better decisions with their finances.
“We are in the black for the first time since I believe fiscal year 13. And that is due to staff members, faculty members really working hard and asking questions,” Weiler said.
Weiler also attributed this success to President Schulz, who has worked hard in communicating the University’s efforts to the public whilst engaging in transparency and accountability.
Students can learn more about the fiscal health recovery plan, as well as voice their perspectives and suggestions, at WSU’s fiscal health website.
*This article was updated to clarify that WSU began its new fiscal year with about a $7.8 million surplus.