College officials predict a $2.6 million dollar surplus in the College's budget for the 2012 fiscal year, according to a finance report that will be presented at the Faculty of Arts and Sciences meeting on Monday. This marks the first time since the Strategic Budget Reduction and Investment initiative began in September 2009 that the College is predicting an operating surplus, according to the report that was obtained by The Dartmouth.
The report also provides more details about how College administrators closed the approximately $100-million budget gap.
Justin Anderson, director of media relations for the College, declined to comment until after the report is presented at the Faculty of Arts and Sciences meeting.
Efforts to close the projected $96-million budget gap estimated for fiscal year 2012 in the original budget projections made in 2009, included reductions in six areas: benefits and compensation; new revenues and initiative; reorganization and restructuring; administrative and programming support; financial aid; and other savings and adjustments, according to Vice President of Finance Michael Wagner.
The College achieved all intended reductions to close this projected gap in April, The Dartmouth previously reported.
New revenues and initiatives are expected to generate $14.1 million, Senior Vice President of the College Steven Kadish said in a previous interview with The Dartmouth before the report's release.
The College anticipates saving $12.7 million in spending for benefits and compensation, according to the report.
Tuition and fees are expected to bring in $2.1 million, according to the report.
"Tuition and endowment are our major sources of revenue," Kadish said. "What the endowment distribution and tuition should be are the two most important questions the [Board of Trustees] has to ask every year."
The College also anticipates saving $11.4 million in financial aid, the report stated. While the College will maintain its need-blind admissions policy, the College reinstated loans for families that earn more than $75,000 a year, The Dartmouth previously reported.
The Financial Aid office previously projected $6 million more than was necessary for the Financial Aid's fiscal year 2012 budget, according to Director of Financial Aid Virginia Hazen.
The Financial Aid office will now only experience an "actual cut" of $5 million out of its $11.4 million figure, Hazen said.
When the Financial Aid Office projected its budget for fiscal year 2012 three years ago, "it was a time the economy was looking bad, so we had to be on the safe side," Hazen said. "We knew the percent of students on financial aid would be at a record high, and that's why we predicted more."
The College also plans to save $15.6 million in reorganization and restructuring, according to the report. These savings come from increased parking fees and fines, the elimination of vacant positions, alterations to the Information Technology division and other changes, according to Kadish.
The College cut $29.7 million in administrative and programmatic support in order to partially account for the budget deficit, Kadish said. Cuts included 38 involuntary layoffs and benefit reductions for other employees, The Dartmouth previously reported.
Kadish said that when deciding which College services to eliminate or minimize, administrators closely evaluated different aspects of College life. For fiscal year 2011, for example, Kadish said he estimated that the College's printing costs was projected to be $3 million, a significant decrease from the "over $7 million" spent in fiscal year 2009 for printing services.
The College will also increase its percentage for overhead, or associated program costs, which consist of the money required to support new programs at the College through overhead costs such as IT infrastructure, facilities and other administrative expenses, according to the report. Following the establishment of associated program costs in 1999, 14.29 percent of programs provided by gifts and endowments would have gone toward associated program costs. Under the new budget plan, this amount will increase to 19.1 percent, bringing in $2 million for the College.
Updated budget projections for the 2012, 2013 and 2014 fiscal years are "significantly" different from the original budget projections made in September 2009, according to Kadish.
In the 2009 projections, the Office of Finance and Administration anticipated that the College would experience a budget deficit of $96 million for the 2012 fiscal year, Kadish said. In June 2010, the projections for the 2012 fiscal year climbed to a deficit of $15 million, while predictions made in April indicate a $2.6 million surplus, according to the report.
Projections for the 2013 and 2014 fiscal years saw similar increases from the original predictions, the report stated.
"There have been really good structural changes," Kadish said. "And I think Dartmouth is definitely working better."
For fiscal year 2012, the College anticipates earning $870 million in revenue, Kadish said. An increase in revenue is projected to come partially from a 5.9 percent increase in tuition, room, board and fees, which was announced by the Board of Trustees in March. The budget revenue was calculated under the assumption that the Class of 2015 would include 1,109 students, Kadish said.
The College also expects a 5 percent endowment return in fiscal year 2012 and anticipates expenses for fiscal year 2012 to be $876 million, according to Kadish.
Expenses are expected to increase in areas including the salary pool, total scholarship funds and operating costs for the construction of the Life Sciences Building, he said.
Staff writer Eliza Relman contributed to the reporting of this article.
