University of Alberta ends 2018 fiscal year with $106-million surplus
While the University of Alberta ended the 2018 fiscal year with a $106-million surplus, most of those funds have restricted uses within the university such as endowments or capital projects.
The surplus was discussed at the Board of Governors meeting on May 28, where they approved the university’s draft financial statements. The surplus is an increase from the previous year’s surplus of $83.4 million.
While planning the 2018-19 budget, the university justified a four per cent cross-faculty budget cut, as well as several fee increases in residence rent and international student tuition, in order to address its $14-million structural deficit. In response to the fee increases, a number of protests were organized by students.
However, Gitta Kulczycki, vice-president (finance and administration) of the U of A, said the $106-million surplus is tied up in the university’s financial assets like endowments, buildings, and equipment.
“It’s not like there’s gobs of money sitting around somewhere,” she said.
Of the $106 million from this year’s surplus, $53.2 million consists of donations directed towards endowments — financial gifts reserved for specific purposes like scholarships or research chairs. That money remains in an account where the interest generated from it provides a revenue stream for the university.
“That’s not money we can use for any other reason,” Kulczycki said. “That’s entirely restricted.”
The remaining annual operating surplus of $52.8 million consists of various items. Part of it includes $16.6 million from decreased obligations towards employee future benefits, which includes pension obligations and disability benefits.
Ancillary services also have a surplus of $4.5 million, but that money can only be used to support operations within the service like the residence system or the U of A bookstore.
‘The ancillary has to fund themselves,” said Associate Vice-President (Finance) Martin Coutts. “They’re run like a business, the only difference is they’re not there to make a profit… we’re just there to break even.”
Another part of the surplus is $18 million left over from various faculties. The money is available for faculties to spend immediately on things such as new appointments and professor’s salaries.
While that leaves a $13.7-million operating surplus, Kulczycki said it will go towards pending capital commitments, such as renewing the labs in the Biological Sciences Building. Those commitments total to $28.5 million.
“It’s all those kinds of things that we need to have as a university,” Kulczycki said.
Coutts said the U of A used to receive government grants for capital projects, such as the building of the Centennial Centre for Interdisciplinary Science and the Edmonton Clinic Health Academy. But since then, grants are now directed towards the university’s deferred maintenance projects, such as the Dentistry Pharmacy Building.
“Those days are kind of gone, the government doesn’t have that kind of money anymore to throw around at big building projects,” Coutts said.