Fri April 26, 2013
Accounting Expert: UW Surplus Is 'Nothing Unusual'
A national higher education accounting expert says she sees nothing unusual about the University of Wisconsin System's budget reserves.
Sue Menditto is the Director of Accounting Policy at the National Association of College and University Business Officers. The organization known as NACUBO represents about 2,200 colleges and universities nationwide. About half are public institutions.
Menditto says she regularly analyzes universities' financial statements. She looked at the UW's statements before commenting on this story.
“Nothing struck me as unusual compared to other systems or public institutions operating statements that I review.”
A memo last week from the non-partisan Legislative Fiscal Bureau found the UW had reserves of $648 million. But the memo also stated that the university was already committed to spending more than $400 million of that, leaving $207 million in reserves. Menditto says that's the number to focus on: “To me that's one month of an operating budget, as defined by the Legislative Fiscal Bureau.”
The Fiscal Bureau memo also found that $414 million of the UW's reserves came from tuition, a point criticized by lawmakers from both parties. Menditto says it's hard for her to speak to that issue without knowing more specifics about Wisconsin's situation. She says she did look at the total amount raised through tuition and fees and compared that to the total amount spent on education expenses. She says in the UW's case, those numbers are close.
“I don't see anything unusual on the face of the financial statements. It's about understanding what tuition buys.”
Menditto says her organization does not recommend a specific percentage of reserves, though she says from what she's seen, Wisconsin's reserves are on the low end.