by Jeff Fox
“Money, it’s a gas, grab that cash with both hands and make a stash.”
- Roger Waters (1973)
At the recent WVU Parkersburg Board of Governors meeting, the department heads made their way through their various reports as per the normal agenda. Near the end of the Sept. 14th meeting, Dr. Vincent Mensah, WVU Parkersburg’s Chief Financial Officer, approached the podium to make a few short comments regarding the financial position of the university.
As expected, Dr. Mensah reported that WVU Parkersburg is on solid financial ground, due largely in part to a surge in student enrollment, often seen during tough economic times. As Board members shuffled through the university’s balance sheet, Dr. Mensah informed them that the official financial audit for 2010-2011 fiscal year should be available for review in October. Until then, Dr. Mensah had compiled some key numbers for the Board and shared them in short overview prior to the upcoming audit.
As board members discussed the numbers, one particular number piqued the interests of the small audience gathered in the newly upholstered theatre seats. As previously noted, the university was enjoying the success of increased tuition and funding … to the tune of $11 million dollars in a current reserve fund. The numbers spurred a few conversations between faculty and staff hoping for an anticipated raise, and students who recently started paying a higher tuition rate.
Just what is this $11 million dollar reserve fund? In actuality, the number must be broken down into two categories, restricted and unrestricted. The restricted reserves are mostly state and federal grants, which the college has applied for and received over different time periods. At present, the restricted reserves total around $3 million. However, that number is ever-changing as available grant money windows open and close over a period of time. The grants may be available for one, two, or three years and have staggered start and end dates. “The $3 million dollars is for specific uses, and it may take awhile for a program to start up,” Dr. Mensah said. Startup may include hiring new faculty, obtaining new equipment, and even remodeling or building an area for the program to take place. At present, WVU Parkersburg is working with “50 or 60 different state, local, federal and private grants,” Dr. Mensah said.
The other type of reserve fund is unrestricted. As one might expect, it is not as encumbered by specific rules or laws governing its expenditure. It has slowly grown over years, and currently stands at approximately $8 million. Last year, largely due to the growth in enrollment, the university was able to bank $1.05 million into the unrestricted reserve fund. “Enrollment has risen sharply, but it is projected to go back down in the next two years to 2008-2009 levels,” Dr. Mensah said.
As many financial advisors recommend, it is good planning for any individual or organization to have approximately 6 months of operating funds in reserve. When this principle is applied to WVU Parkersburg, the resulting estimate would call for approximately a $10.5 million dollar reserve fund. As one can see, the $8 million dollar unrestricted reserves would be a little low on its own to meet this estimated amount. “Many private and land grant colleges would have ten to twenty times our reserve amount,” Dr. Mensah said.
There are several reasons why the university needs a solid reserve fund. “A reserve is not meant to be used,” Dr. Mensah said, “there are so many needs and so many wants, that $8 million could easily be gone.” The university must be prepared for any unexpected expenses, such as building maintenance and repair, funding new programs, adding new faculty and staff, buying materials and equipment and more.
Also, “having a good reserve shows good financial health,” Dr. Mensah said. When the university seeks to begin new projects it must have its financial house in order. While traditional funding means are helpful, the university must also be looking for new ways to fund future endeavors.
“We have increased costs of operating programs. We have had the joy of increased enrollment only with only a small decrease in funding over the last few years. And, we have found other ways of funding capital projects. There is no promise that this trend will continue. With some of the project investments on the horizon, we will need to look to the reserves for funding,” President Marie Gnage said. While tuition certainly plays a large role in university revenue, WVU Parkersburg is also exploring the idea of an area capital campaign to help add to those reserves, with financial support being pledged by businesses and individuals.
While money may not be the key to happiness, it is often the key to organizational growth. With a steady financial foundation WVU Parkersburg will be ready for future challenges. “I truly look forward to keeping our college in the spotlight as the regional college of choice for the Mid-Ohio Valley, and as a flagship community college for the state. In the future, I would like for us to develop additional academic/workforce programs to meet the needs of the region; add additional facilities at Jackson County Center, Parkersburg, and in one or two other counties; and provide more opportunities for student engagement (activities/facilities). More importantly, I would like for our college to be considered by business, industry and the community as the premier college in the state for career ladder programs—noncredit courses and certificate, to credit certificate, to associates degree, to baccalaureate degree,” Dr. Gnage said. In the end, money well spent.
“Money, it’s a gas, grab that cash with both hands and make a stash.”
- Roger Waters (1973)
At the recent WVU Parkersburg Board of Governors meeting, the department heads made their way through their various reports as per the normal agenda. Near the end of the Sept. 14th meeting, Dr. Vincent Mensah, WVU Parkersburg’s Chief Financial Officer, approached the podium to make a few short comments regarding the financial position of the university.
As expected, Dr. Mensah reported that WVU Parkersburg is on solid financial ground, due largely in part to a surge in student enrollment, often seen during tough economic times. As Board members shuffled through the university’s balance sheet, Dr. Mensah informed them that the official financial audit for 2010-2011 fiscal year should be available for review in October. Until then, Dr. Mensah had compiled some key numbers for the Board and shared them in short overview prior to the upcoming audit.
As board members discussed the numbers, one particular number piqued the interests of the small audience gathered in the newly upholstered theatre seats. As previously noted, the university was enjoying the success of increased tuition and funding … to the tune of $11 million dollars in a current reserve fund. The numbers spurred a few conversations between faculty and staff hoping for an anticipated raise, and students who recently started paying a higher tuition rate.
Just what is this $11 million dollar reserve fund? In actuality, the number must be broken down into two categories, restricted and unrestricted. The restricted reserves are mostly state and federal grants, which the college has applied for and received over different time periods. At present, the restricted reserves total around $3 million. However, that number is ever-changing as available grant money windows open and close over a period of time. The grants may be available for one, two, or three years and have staggered start and end dates. “The $3 million dollars is for specific uses, and it may take awhile for a program to start up,” Dr. Mensah said. Startup may include hiring new faculty, obtaining new equipment, and even remodeling or building an area for the program to take place. At present, WVU Parkersburg is working with “50 or 60 different state, local, federal and private grants,” Dr. Mensah said.
The other type of reserve fund is unrestricted. As one might expect, it is not as encumbered by specific rules or laws governing its expenditure. It has slowly grown over years, and currently stands at approximately $8 million. Last year, largely due to the growth in enrollment, the university was able to bank $1.05 million into the unrestricted reserve fund. “Enrollment has risen sharply, but it is projected to go back down in the next two years to 2008-2009 levels,” Dr. Mensah said.
As many financial advisors recommend, it is good planning for any individual or organization to have approximately 6 months of operating funds in reserve. When this principle is applied to WVU Parkersburg, the resulting estimate would call for approximately a $10.5 million dollar reserve fund. As one can see, the $8 million dollar unrestricted reserves would be a little low on its own to meet this estimated amount. “Many private and land grant colleges would have ten to twenty times our reserve amount,” Dr. Mensah said.
There are several reasons why the university needs a solid reserve fund. “A reserve is not meant to be used,” Dr. Mensah said, “there are so many needs and so many wants, that $8 million could easily be gone.” The university must be prepared for any unexpected expenses, such as building maintenance and repair, funding new programs, adding new faculty and staff, buying materials and equipment and more.
Also, “having a good reserve shows good financial health,” Dr. Mensah said. When the university seeks to begin new projects it must have its financial house in order. While traditional funding means are helpful, the university must also be looking for new ways to fund future endeavors.
“We have increased costs of operating programs. We have had the joy of increased enrollment only with only a small decrease in funding over the last few years. And, we have found other ways of funding capital projects. There is no promise that this trend will continue. With some of the project investments on the horizon, we will need to look to the reserves for funding,” President Marie Gnage said. While tuition certainly plays a large role in university revenue, WVU Parkersburg is also exploring the idea of an area capital campaign to help add to those reserves, with financial support being pledged by businesses and individuals.
While money may not be the key to happiness, it is often the key to organizational growth. With a steady financial foundation WVU Parkersburg will be ready for future challenges. “I truly look forward to keeping our college in the spotlight as the regional college of choice for the Mid-Ohio Valley, and as a flagship community college for the state. In the future, I would like for us to develop additional academic/workforce programs to meet the needs of the region; add additional facilities at Jackson County Center, Parkersburg, and in one or two other counties; and provide more opportunities for student engagement (activities/facilities). More importantly, I would like for our college to be considered by business, industry and the community as the premier college in the state for career ladder programs—noncredit courses and certificate, to credit certificate, to associates degree, to baccalaureate degree,” Dr. Gnage said. In the end, money well spent.