Outgoing University of Wisconsin-Madison Chancellor David Ward provided clarification about the university’s recently discovered surplus funds in Monday’s Faculty Senate meeting, saying a majority of the balances will be used as financial aid resources.
The release of a state audit last month revealed the UW System held a balance of over $1 billion at the end of June 2012, $420 million of which came from UW-Madison reserves. Approximately $100 million of the total UW-Madison balance came directly from students’ tuition.
Campus and state leaders have criticized the reserves since the amounts were brought to the public’s attention over the role tuition increases played in creating the balances.
According to Ward, the reserves are both “prudent and reasonable,” and the amount has grown over the past years due to uncertainties in future revenue. Ward said the UW System’s response could have been “nimbler” and the process of holding reserves needs to be more accountable in the future.
But he admitted the system should engage in a careful evaluation of tuition policy and “learn something” from the issue.
According to Ward, a bulk of the surplus funds have been used to directly impact students through initiatives such as increased financial aid.
Multiple faculty senators, including mathematics professor Julie Mitchell, questioned the build-up of the funds, asking Ward why university departments were asked to make cuts when money appears to have been available.
“It feels like you took our rainy-day fund and put it in yours,” Mitchell said.
According to Ward, the funds are dispersed across multiple accounts and are not easily transferable throughout campus.
Ward also said the two-year tuition freeze proposed by multiple state legislators will be “a challenge” and also noted the increased vulnerability of the proposed $181 million in UW System funding in the 2013-’15 budget due to backlash over the audit’s findings.
Faculty Senator and chemistry professor Judith Burstyn said she was “disappointed but not surprised” the system’s funding could be at risk. She said the new flexibilities given to system in the budget may be “problematic” if the flexibilities will allow funding to be cut from the university’s cost to continue.
According to Ward, it is “not a happy situation” but he said administrators hope to hold on to the proposed funding as the budget moves through the state Joint Finance Committee.
Ward said he hopes there will be “some sanity” as the legislature decides on the budget in the coming weeks.
