Memo From the President
Office-Of-The-President@wmich.edu> 11/09/07 11:13 AM
>>> TO: Deans, Directors, Chairs and Managers
FR: President John M. Dunn CC: Campus and Employee Group Leaders
RE: 2007-08 Budget Nov. 9, 2007
Now that the Michigan budget has been passed, and the state kept to its promise to return our $10.2 million August payment, I would like to address our current budget situation.
As you probably know, the Board of Trustees passed a General Fund budget in July that contained a $5.9 million structural deficit (more expenses budgeted than revenue). Our commitment to our trustees is to recapture as much of that difference as possible through one-time cost savings during the year. It is our further goal to continually reduce that structural deficit over the next few years to achieve a balanced budget.
You may have heard that the state has provided an "increase" of 1 percent to higher education, which for WMU, amounts to $1.1 million. However, when we factor in last spring's $1.9 millio
n Executive Order budget cut, we remain $800,000 behind where we were at the start of the last fiscal year. Fortunately, we budgeted conservatively, not counting on new funding from the state for the 2007-08 year. We will use the $1.1 million in unbudgeted state appropriations to reduce our operating deficit from $5.9 million to $4.8 million. In the coming years, we expect enrollment growth coupled with campuswide administrative efficiencies to help us achieve greater budget stability.
For the past seven months, we have had in place expenditure controls intended to deal with both cash flow shortages and our budget issues. We continue to be in a very lean budget situation, but after consultation with the Senior Leadership Team and the Provost's Council, I am asking our administrative staff to relax those controls to return to our normal processing of expenditures. Effective immediately, the additional approval required for travel and other large expenditures will be lifted. Additionally, Human Resource-related processing, including searches and position re-evaluations, will return to the normal approval process. I must stress that we remain in a tight budget situation, and we are relying on your good judgment and experience to make only those spending decisions needed to keep the University moving forward in these challenging economic times.
Because of the uncertainty with projected state revenues, there is still a very real possibility that the governor might issue an Executive Order cut mid-year. If that occurs, we may need to revisit the more stringent expenditure controls we are setting aside today. Thank you for your patience and cooperation these past several months. And thank you for your continued vigilance in monitoring expenditures.