During the past 12 months, the University suffered several financial setbacks and was forced to enact several budget cuts for the 2009-10 academic year to cope with the recession. Despite the economic slump and its unavoidable impact on University operations, officials are actively seeking to expand programs and services as they look to the future of the institution.
“Virtually all revenue sources have been affected,” said Colette Sheehy, vice president for management and budget, about the past year’s economic crisis and budget reductions.
The University’s service units, for example, have received less money, as their customer bases have reduced spending levels. In addition, the Medical Center has seen fewer patients, because several patients with elective procedures have often chosen to defer their appointments, Sheehy said.
In October, the University’s state funding for 2008-09 was cut by $10.6 million, Sheehy said. The University also had to plan for a reduction of $12.3 million for 2009-10, Sheehy added.
The University’s endowment — which increased by more 25 percent in 2006-07 and 6 percent in 2007-08 — fell by about 25 percent during the six-month period that ended Dec. 31, according to an e-mail from Leonard Sandridge, executive vice president and chief operating officer. Since the decrease, the endowment has remained relatively flat since January, Sandridge’s e-mail stated.
“Although none of us feel good about an absolute decline of this magnitude, we believe the endowment is performing well on a basis relative to similar endowments,” Sandridge stated. “We are a long-term investor and we will work our way through this period.”
To adapt to the budget reductions, the University continues to use some of the same policies that it implemented during the past year.
“Across the University we are holding positions vacant, reducing and deferring discretionary expenditures, looking at the feasibility of consolidating departments with like responsibilities and creatively looking for new revenue opportunities,” Sheehy stated.
The University, however, is required to pay for some committed costs, such as utilities, research and teaching, said Anda Webb, vice provost for administration and chief of staff.
“No one’s salary has been cut,” Webb said. “One of our priorities is to preserve the core mission of the University, which [includes] teaching [and] research.”
Although the budget cuts have affected several University entities, federal grant money for research in the sciences has changed little since last year and may possibly increase as the University applies for grant money funded by the American Recovery and Reinvestment Act, said Jeffrey Blank, assistant vice president for research. In addition, the commonwealth recently approved $10.7 million of stimulus money for the University’s 2009-10 operating budget, according to an e-mail from Sheehy.
“The stimulus money is just being applied for now,” Blank said. “By the coming year we hope some of the money will be flowing into the University’s research programs.”
The stimulus money will increase funding for the National Institutes of Health — the University’s largest source of research grant funding — by about $10.4 billion, or one-third of the pre-stimulus NIH budget, Blank said. In addition, the National Science Foundation — which is the University’s second largest source of research grant funding — is receiving $3 billion from the stimulus, he added.
To receive NIH stimulus money, researchers who already have NIH grants can apply for a supplement to their current state of money, Blank said. In addition, the NIH will review applications for additional grants that it did not provide before the stimulus act passed.
University researchers may also apply for money from other federal research-supporting agencies, such as the Departments of Commerce, Defense and Energy, as well as from the National Aeronautics and Space Administration, Blank said. These agencies, however, have not yet finalized their proposal guidelines for stimulus-funded grants.
The University, meanwhile, must also remain mindful that stimulus money will only be provided for two years, Blank said.
“We’re hoping those [federal] agencies can maintain the research funding at a high level ... so we can maintain the great research that we’re doing here into the future,” Blank said.
University-wide projects among different schools have continued through the recession.
“There are many collaborations between and among schools that exemplify the spirit of collaboration at the University of Virginia,” University Provost Arthur Garson stated in an e-mail.
The Commission on the Future of the University, for example, is continuing to work on its first six initiatives, which are intended “to further distinguish the University,” Garson said. The University also hosted a Leadership in Academic Matters Group and started a University-wide process “to develop cross-school collaboration in research,” Garson added.
Even as the University’s pocketbooks continue to be squeezed by the nation’s financial downturn, University administrators still are seeking ways to grow and provide enhanced services to community members. To reach desired performance benchmarks and goals, officials have begun to employ careful budget-planning and decision-making tactics, Garson stated, and despite the challenges posed by the economic climate, the University believes it must achieve its aims eventually.
“We are mindful that in times of budget stress that we must spend wisely,” Garson added. “If we fail to act on the recommendations made by the faculty, staff, students, and alumni who contributed to the Commission, five years from now, the lack of progress will be remembered, not the budget issues.”
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