Board approves three-year budget plan
Following months of consultation and number crunching, Concordia’s Financial Services Department has produced a solid three-year plan, which was approved by Concordia’s Board of Governors at its June 21 meeting.
Chief Financial Officer Patrick Kelley and his staff spearheaded the plan’s development, with input from Budget Review Working Group members drawn from across the university, including the Office of the Provost, Institutional Planning Office and Human Resources.
Kelley, who made the Board presentation, says this year’s budget exercise is all about change.
“The change I’m talking about has two aspects,” he explains. “One is the changing face of tuition and the provincial government’s funding regime for education.” As he notes, with so much in flux, arriving at firm numbers has been a challenge in itself.
“The second type of change is in today’s student,” Kelley continues. “Students have far greater expectations from us to deliver a quality education.” This pressure is positive for Concordia, Kelley says. It explains why $2.7 million from the 2012-13 budget is earmarked for the university’s Academic Plan.
The bottom line on Concordia’s finances? Kelley says the university is on sound financial footing: “Concordia’s senior management team will continue to follow good management practices and work hard to maintain a situation where we have no operating deficit.”
Financial prudence also dictated the plan’s three key targets. A modest operating surplus of $600,000 and an annual general reserve of one per cent of revenues will enable Concordia to respond to unexpected events. As well, the plan calls for strengthening the university’s balance sheet by investing any surpluses into debt repayment.
The budget for 2012-13 forecasts revenues of $371.1 million — 63.3 per cent of which comes from government grants — and expenses of $365.9 million (before Generally Accepted Accounting Principles and funding of financial obligation charges).
According to Kelley, “A three-year outlook helps us understand the consequences of today’s actions. For example, if we have a dip in enrolments today, this will take several years to work through our organization, so it’s a better way to plan.”
Among the budget’s big-ticket items, salaries and benefits account for 76.6 per cent of the university’s costs. The budget assumes contract-mandated salary increases for 2012-13 at about $9 million, with only a portion of this sum covered by government grants.
The budget plan also cites the costs of servicing the employee pension plan, which are forecast to rise by $1.1 million, reaching a total cost of $20.4 million by the end of 2012-13.
With “change” as this year’s watchword, Kelley and his team have produced a budget plan that’s unlike its predecessors. Kelley noted the past budget documents were choked with “accountant-driven explanations.” In the interests of transparency and clarity, the current plan is shorter and easier to read.
And while that’s a step forward, Kelley says he already has ideas to further improve next year’s document.
Related Links:
• Concordia Budget Plan 2012-13 Fact sheet
• Budget Plan 2012-13