WERE ON THE SAME SIDE

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WERE ON THE SAME SIDE

• COMMENTS BY
• JERRY G. BRIDGES
• CONTROLLER, JOHNS HOPKINS UNIVERSITY

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JOHNS HOPKINS UNIVERSITY MISSION STATEMENT

• TO IMPROVE LIFE

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JHU HIGHLIGHTS

• FISCAL YEAR, 2003
• TOTAL REVENUE 2.538 B
• TOTAL EMPLOYEES 21,644
• TOTAL ENROLLMENT 17,925

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PREVIEW OF REMARKS

• SYNOPSIS OF MAJOR SOURCES AND USES OF FUNDS AT
  RESEARCH UNIVERSITIES
• DISCUSSION OF MOST BINDING CONSTRAINTS
• COMMENTS ON SIMILIARITIES AND DIFFRENCES WITH
  GOVERNMENT AGENCIES
• SOME CONCLUSIONS

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PUBLIC AND PRIVATE INSTITUTIONS

• PRINCIPAL DIFFERENCE IS IN SOURCES OF FUNDS
• PUBLIC INSTITUTIONS RECEIVE DIRECT APPROPRIATIONS
  AND ARE LESS DEPENDENT ON GIFTS AND PRIVATE
  GRANTS
• PRIVATE INSTITUTIONS RELY MORE ON FUNDRAISING

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PRINCIPAL SOURCES OF OPERATING FUNDS (2001
AGGREGATE DATA)

• PUBLIC PRIVATE
• SOURCE INSTS INSTS JHU
• GOVT APPROPRIATIONS 31 - 0 - 1
• GOVT GRANTS ETC. 22 25 52
• PRIVATE GIFTS, ETC. 9 22 11
• NET TUITION AND FEES 13 20 11
• AUXILIARY ENTERPRISES 14 18 2
• ALL OTHER 11 15 23
• Council of Government Relations Report,
  Finances of Research Universities, September 25,
  2003
• Fiscal Year, 2002

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PRINCIPAL USES OF OPERATING FUNDS (2001 AGGREGATE
DATA)

• PUBLIC PRIVATE
• USES INSTS INSTS JHU
• INSTRUCTION 32 34
  29
• RESEARCH 25 23 44
• AUXILIARIES 18 18 3
• ACADEMIC SUPPORT 10 8 3
• INSTITUTIONAL SUPPORT 6 9
  6
• ALL OTHER 9 8 15
• Council of Government Relations Report,
  Finances of Research Universities, September 25,
  2003
• Fiscal Year, 2002

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PRINCIPAL TYPES OF CONSTRAINTS

• GOVERNMENT APPROPRIATIONS
• GOVERNMENT GRANTS AND CONTRACTS
• PRIVATE GIFTS, GRANTS AND CONTRACTS
• TUITION AND FEES
• AUXILIARY ENTERPRISES
• DEBT

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CONSTRAINTS

• GOVERNMENT APPROPRIATIONS
• STATE LAWS AND REGULATIONS
• UNCERTAINTY OF AMOUNT
• LAND GRANT ISSUES

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CONSTRAINTS (CONTINUED)

• GOVERNMENT GRANTS AND CONTRACTS
• ADMINISTRATIVE COST CAPS
• SALARY CAPS
• ALLOWABLE EXPENSES
• EXCLUSION OF FUND-RAISING COSTS
• OTHER COST CONSTRAINTS
• INFRASTRUCTURE COSTS

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CONSTRAINTS (CONTINUED)

• PRIVATE GIFTS, GRANTS AND CONTRACTS
• COST CAPS
• COST OF MAINTAINING A REPORTING INFRASTRUCTURE
• COLLECTION, DEFERRED PAYMENTS AND WRITE-OFFS
• RESTRICTED VS UNRESTRICTED GIFTS

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CONSTRAINTS (CONTINUED)

• INSTRUCTION
• PROVIDING QUALITY INSTRUCTION
• PROVIDING QUALITY SUPPORT
• (LIBRARIES, LABS, TECHNOLOGY)
• PROVIDING FINANCIAL AID
• PRIVACY LAWS COMPLIANCE
• TAX LAWS, ESP. FOREIGN STUDENTS

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CONSTRAINTS (CONTINUED)

• AUXILIARY ENTERPRISES
• QUALITY ROOM AND BOARD
• HEALTH AND SAFETY STANDARDS
• OTHER
• DEBT
• MAINTENANCE OF BOND RATINGS
• TAXABILITY ISSUES
• ROYALTIES
• CLINICAL ISSUES

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COMPARISON WITH GOVERNMENT AGENCIES

• GOVERNANCE COMPARISON
• INDIVIDUAL COMPONENTS (AGENCIES, SCHOOLS) OPERATE
  INDEPENDENTLY AND HAVE THEIR OWN CONSTITUENCIES
• UNIVERSITY RESEARCH IS SUBJECT TO PEER REVIEW FOR
  BOTH FUNDING PROPOSALS AND RESEARCH RESULTS
• BOTH ARE SUBJECT TO A MULTITUDE OF LAWS

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COMPARISON WITH GOVERNMENT AGENCIES (CONTINUED)

• ECONOMIC COMPARISON
• DEFINED, LIMITED BUDGETS
• PENALTIES FOR OVERSPENDING
• UNIVERSITY BUDGET CYCLE IS SHORTER AND MORE
  FLEXIBLE
• UNIVERSITIES BORROW ON THE BASIS OF THEIR
  FINANCIAL STATEMENTS

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COMPARISON WITH GOVERNMENT AGENCIES (CONTINUED)

• SOCIETAL COMPARISON
• SIMILAR MISSIONS (TO IMPROVE LIFE)

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CONCLUSIONS

• RESEARCH UNIVERSITIES AND THE AGENCIES WITH WHICH
  THEY DEAL HAVE SIMILAR GOALS.
• THE TRADITIONAL PARTNESHIP BETWEEN RESEARCH
  UNIVERSITIES AND THEIR GOVERNMENT SPONSORS IS
  UNDER STRESS.
• CONSTRAINTS IMPOSED BY THE AGENCIES ARE
  INCREASING AND ARE FINANCIALLY BURDENSOME.
• A NEW BUSINESS MODEL NEEDS TO ADDRESS THE IMPACT
  OF THESE CONSTRAINTS ON THE UNIVERSITIES.
• THIS PROCESS OFFERS AN OPPORTUNITY TO RE-BALANCE
  THE PARTNERSHIP FOR THE FUTURE.

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THE GOLDEN RULE

• THE ONE WITH THE GOLD MAKES THE RULES.