UGFA’s Analysis of University of Guelph Finances

education-is-a-right-banner-final1Read the University of Guelph’s Faculty Associations Financial Analysis here.

The University of Guelph administration is in the process of implementing “cost savings” or budget cuts of 21 million dollars from 2014 to 2016.[1] UofG senior administration and the Board of Governors have also voted to increase tuition fees each year since 2006. These cuts and tuition fee increases have negative impacts on UofG faculty and worker’s job security and working conditions, and also harm student learning and living conditions. Administration argues these cuts and tuition fee increases are necessary because of a projected structural deficit. However, the University of Guelph Faculty Association has produced an analysis of the University of Guelph’s finances that finds Guelph to be in a structural surplus of $76 million from 2011 to 2014.[2]

Student tuition fees have grown in revenue by $32.935 million from 2011 to 2014.[3] As well, for the 2014-2015 academic year UofG had a target of $10.98 million in cuts in 2014-2015 and has a target of $10 million in cuts for the 2015-2016 academic year.[4] The amount of cuts and tuition fee increases amounts to $53.9 million. Instead of increasing tuition fees and making budget cuts, UofG Senior Administration and the Board of Governors should have used surpluses from 2011 to 2014 to help stop budget cuts and freeze tuition fees. By freezing tuition fees, stopping budget cuts, and calling on the provincial government for more funding, the university can put pressure as an institution on the provincial government to provide more investment to post-secondary education.

UGFA’s Analysis also found that:

The internally restricted funds have grown to $265 million in 2014. Previously they had grown from $35 million in 2006 to $172 million in 2012.[5] Almost all funds can be moved from internally restricted funds to open funds. Only the hospitality services money cannot be removed from internally restricted funds. Internally restricted funds are funds that are voluntarily restricted by the university administration to help pay for expected expenses that the university will have to deal with in the future (such as pensions etc).

These internally restricted funds could be used to stop budget cuts and freeze tuition fees tuition fees as well.

Finally, the report found that the administration has a high priority on capital expenditures.

As is stated in UGFA’s analysis, “in each of 2011-2013, the purchase of capital assets exceeded the cash flows from operations, meaning that money had to be found elsewhere to buy capital assets. This situation can be interpreted as the Administration placing a very high priority on capital investments, so high that they are willing to borrow money or starve other University activities perhaps of greater importance to our mission.” Even in 2014 when capital spending did not exceed cash flows Stopcutsfrom operations, the administration spent $49 million on capital assets.[6] The debt from capital expenditures is often used as an excuse by the university to cut programs, despite the fact there has been a surplus from 2011 to 2014.

University of Guelph’s mission statement that is written in UGFA’s analysis focuses on teaching/ learning and scholarship/ research. Cutting budgets lowers the quality of teaching/learning and scholarship/ research. As well, the administration’s focus on spending on capital assets as well as increasing internally restricted funds works against UofG’s mission. The University administration should not be spending so much on capital so education accessibility and quality does not suffer.

A main priority of the University of Guelph needs to be on quality, accessible, education instead of on increasing capital expenditures and increasing the amount of internally restricted funds. Another main priority of the university also needs to be on maintaining public and accessible education. This means using surpluses from previous years to freeze tuition fees, stop budget cuts, and call on the provincial government for more public funding for our university.

[1] University of Guelph. “University of Guelph: 2015/2016 Operating Fund Budget.” Page 25. https://www.uoguelph.ca/finance/sites/default/files/public/2015%202016%20MTCU%20Operating%20Fund%20Budget%20Final.pdf

[2] University of Guelph Faculty Association. “Analysis of University Finances.” Page 2. http://www.ugfa.ca/userContent/documents/UGFA%20Documents/FAC%20Financial%20Statement%20Analysis_2015.pdf

[3] Ibid. page 11.

[4] University of Guelph. “University of Guelph: 2015/2016 Operating Fund Budget.” Page 25. https://www.uoguelph.ca/finance/sites/default/files/public/2015%202016%20MTCU%20Operating%20Fund%20Budget%20Final.pdf

[5] University of Guelph Faculty Association. “Analysis of University Finances.” Page 7. http://www.ugfa.ca/userContent/documents/UGFA%20Documents/FAC%20Financial%20Statement%20Analysis_2015.pdf

[6] University of Guelph Faculty Association. “Analysis of University Finances.” Page 12. http://www.ugfa.ca/userContent/documents/UGFA%20Documents/FAC%20Financial%20Statement%20Analysis_2015.pdf