2000 spending accelerated as investment values dropped
College expenditures increased by over 11 percent in 2001 to a total of $426 million, according to Dartmouth's annual report, which is set to be released next week.
According to College Treasurer Win Johnson, Dartmouth boosted expenditures across the board -- making improvements to residence halls, increasing fellowship funding and providing more services to students.
He added that another major jump in spending during the last fiscal year resulted from a restructuring and elevation of compensation for College employees.
Even as Dartmouth's spending rose, the return on its investments dropped, as tougher economic conditions took hold nationwide. College President James Wright said this week that the College's financial situation had "softened" as a result of the weakening markets.
Last year the $2.4 billion endowment fell by 0.4 percent and it dropped even more in the first quarter of the current fiscal year, Johnson said.
He cautioned that the down-turning economy will not immediately affect the College's wealth since income from the endowment is assessed using a multi-year average.
"Even though there was a drop in yield last year, on average, the income from the endowment is still increasing," he explained. He added that the endowment funds would have to face many negative years in succession before its income would be negative.
Johnson said he could make no assumptions about future spending, but said he did not expect any drastic changes in allocating funds this year.
It is hard to compare Dartmouth's spending patterns to those at other colleges and universities because accounting styles differ from institution to institution. But Johnson said Dartmouth's expenditures run the gamut from being much greater, to around equal to slightly less than the national average.
"At the broadest level," Johnson said, "the expenditures of all institutions look alike until you drill down to more specific levels, where classification becomes harder and harder."
For example, at Dartmouth, the people who work in the registrar's office are paid in the same category as professors. But at some other schools, they would be paid as administrative staff members.
Johnson said one across-the-board constant, however, is that 55 to 60 percent of all university spending goes towards compensating employees.
The College's expenditures on scholarship and financial aid hover near the national average (11.9 percent to 11.4 percent average), as does spending on student services (6.5 percent to 5.4 percent average).
However, Johnson said Dartmouth differs significantly from the national average on certain expenditures. For instance, whereas the College spends 40.3 percent of its yearly spending on instruction and research, the national average for private colleges and universities is only 34.7 percent.
In general, Dartmouth's accounting system is vastly complex. Its expenditures are analogous to balancing the personal checkbook of a multi-billion dollar corporation.
When assessing College figures, it is important to distinguish between types of spending.
Operation expenditure is annual, and subject to normal renewal. Examples of such expenditures include paying for landscaping and dorm refurbishing.
Money for capital expenditures, on the other hand, is raised separately from operational costs. This type of money goes towards big projects, such as the building of Berry Library, which cost $55.5 million, and the McCulloch and Whitemore residence hall projects.
All capital expenditures are onetime expenses that are drawn-out in time.
In many of its accounting practices, Dartmouth acts more like a corporation than most students might imagine. Each year the College puts out an annual report, which includes a breakdown of financial statistics. This year's report is scheduled to be released next week.
According to the report, the College spent more than $383 million during the 2000 fiscal year.
These expenses included, but were not limited to, the following revenue recipients:
Instruction. This category included money spent on undergraduate and graduate academics, including professor salaries, and accounted for 40.3 percent of spending.
Libraries and arts. This category included money routed to the Hood Acquisition Fund, the Hopkins Center and the libraries, and accounted for 6.3 percent of spending.
Scholarship. Spending on financial aid accounted for 11.9 percent.
Student Services. This group included the costs of providing career advice to students, funding Student Assembly and supporting student organizations, and accounted for 6.5 percent.
Institutional Services. This group included the funds that supported the Admissions office, the Office of Residential Life, the Registrar and the President, and accounted for 4.3 percent.
Physical Plant. This category included money spent on the general upkeep of College buildings and grounds, and accounted for 8.9 percent.
Labeled as "Educational and General" expenses, these figures do not include auxiliary expenses, such as maintaining residence halls, operating Dartmouth Dining Services and funding the Skiway and the Golf Course.