Approval of Minutes; Minutes of the meeting of December 15, 2005 were approved.

Fiscal 2006 Second Quarter Operating Results

The Committee reviewed the University's FY 2006 second quarter financial results which are favorable compared to budget through December. With spring tuition recorded, the University's cash position is strong as expected, a $185.8 million operating surplus, and better than the budgeted level of $153.6 million. Higher than expected revenue attainment is the primary cause of this improvement compared to budget. In particular, expendable gift revenue is significantly above budget ($69.2 million versus a budget of $49.1 million). Total spending is at budgeted levels through December.

Tuition revenue is $9.3 million (2.3%) higher than budgeted and 10.7% higher than last year. The significant increases against budget were at the Schools of Arts & Sciences, Public Health, Nursing and Medicine and SAIS.

Sponsored grants and contracts revenue is over budgeted levels ($3.5 million, 0.9%) through December, led by the School of Public Health. While their grants and contracts budgets are smaller, SAIS and the Schools of Professional Studies and Nursing also reported higher than budgeted revenue through December. The other major research divisions are either at or below budget for total research revenues at mid-year. Total sponsored grant and contract revenue is up $19.0 million (4.9%) over last year.

Facilities & Administrative cost recoveries generally track that of sponsored grants and contracts. Through December, F&A recoveries are slightly below budget ($933 thousand, 0.8%). The variance between the modest growth in grants and contracts and small shortfall in F&A recoveries is attributable to increased subcontract activity (limited F&A) and foundation awards (generally lower F&A than on federal awards).

Clinical services revenue is up slightly compared to budget through March (up $3.2 million, 2.1%) and is $25.3 million (11.8%) more than last year. The School of Medicine reports increased activity that drives both clinical revenue and expense.

Expendable gift revenue is $20.1 million over budget through December. The Schools of Medicine and Public Health are above budgeted levels, $8.8 million and $8.4 million, respectively. These amounts do not include the recently announced $100 million anonymous gift, the proceeds of which will fund programs at Medicine, Public Health and Arts and Sciences, as well as Johns Hopkins Hospital. That gift will be reflected in 3rd quarter results.

Total expenditures are above budget $22.6 million (1.5%) through the first half of the year. Most categories of spending are at or near budget. Notable exceptions are instruction and research which is up $10.7 million (3.5%) due to higher spending in the divisions with higher enrollment than budgeted and clinical spending, up 9.8 million (6.0%), due to increased clinical activity and higher than budgeted clinical bonuses which were related to better than expected results in the prior year.

There are other variances in spending compared to budget through December. Auxiliary enterprise spending is above budget ($801 thousand, 3.1%) due to increased activity at Johns Hopkins Press. Student service spending is below budget principally due to a reduction in variable costs in the part-time programs at the Schools of Arts and Sciences and Engineering and is expected to remain below budget at year end. Library spending is under budget due to timing issues on purchases of library materials but projected to be at budget for the fiscal year.

Faculty Salary Studies

Dr. Lebo presented the results of the annual faculty salary review. Hopkins and its peer institutions have been working with the AAU to develop a national source of salary data by discipline. The next step is to refine the peer groups for each JHU division. As of March 2006, peer groups were limited to public universities and masked private universities. The privates will be unmasked in July 2006 allowing for more precise peer selection. Dr. Lebo will be meeting with Deans and FBAC representatives to review division specific results.

The review of the Arts and Sciences results led to a discussion on the philosophy on setting faculty salaries, where the nine-month salaries of humanities faculty compare more favorably with peer institutions than natural sciences faculty salaries. Dr. Townsend noted that this disparity has existed for decades. Provost Knapp indicated that salary decisions are made by the Deans of the schools, and noted that deans have made significant efforts in recent years to align natural science faculty salaries more closely with those of with their peers.

Further discussion was held on retention issues. Due to competition with other elite schools for top faculty, the Deans must spend significantly on retaining faculty. However, several members of the committee indicated that faculty retention is not only about pay but also due to the collaborative environment at the University.

Other divisional faculty data discussed included the School of Engineering, the Peabody Institute and the School of Public Health. The Public Health analysis will be modified when the peer group can be established in July. Dr. Lebo added that Public Health data will be available for some subspecialties.

HopkinsOne

Dr. Steinwachs provided an update from the HopkinsOne Faculty Advisory Committee (HOFAC). The Committee continues to provide a voice for the faculty during the development of the enterprise-wide system.

Respectfully submitted,
Frederick W. Puddester

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