Approval of the Minutes

Minutes from the meeting of December 14, 2006 were approved as distributed.

Fiscal 2007 Second Quarter Operating Results

The University’s operating results through December trail budget. The six-month operating surplus is $169.8 million compared to a budget of $186.2 million. However, there are several timing issues affecting these results so the committee focused its discussion on projections in which timing issues are eliminated.

The projected operating surplus is $48 million slightly lower than the budgeted surplus of $57.6 million. This variance is relatively small on a base of over $3 billion. There are three primary factors contributing to the variance: decreased F&A recoveries, increased clinical trial compliance costs and higher Instruction and Research expenditures. F&A is lower than budgeted due to a changing mix of sponsored funding to more reliance on private funds which carry lower F&A rates and more subcontracting which earns no F&A beyond the first $25 thousand. Clinical trial compliance costs have increased to over $6 million due to the complexity of managing clinical care between research and medically necessary procedures. These costs are expected stabilize in future years after the compliance infrastructure is in place. Instruction and Research costs are higher than expected as faculty and researchers expend University funds to cover cost sharing requirements on sponsored research or to bridge funding between grants. These trends are expected to continue and will be incorporated in the Five-Year Plan.

The committee also compared the FY 2007 projection to FY 2006 actual results. As anticipated in the FY 2007 budget, the operating surplus is much lower than the prior year due to large gifts and other one-time revenue received in FY 2006. Revenue growth FY 2007 over FY 2006 is projected to be 3.9% versus expenditure growth of 5.8%. However, after adjusting for the extraordinary items noted above, the revenue growth is 5.6%. While still lower than projected expenditure growth, it does show improvement from earlier in the year. Trustee Flaherty noted this level of expenditure growth is hard to sustain.

Only the Bloomberg School of Public Health and the School of Medicine project to be significantly below budget at year end. F&A recoveries at both schools are projected to fall below budget, and the School of Medicine will also have to absorb the additional clinical trial compliance costs.

Business Continuity Planning

Dr. Links presented a report to the Committee on University-wide pandemic influenza planning, focusing on Business Continuity Planning. (Dr. Links directs the Center for Public Health Preparedness and is on CEPAR's Leadership Committee.) Most hazards are acute and of short duration; however, a flu pandemic would be of longer duration and requires different planning and response. Even so, the team is utilizing an all hazards model rather than planning solely for a pandemic, and is focusing on planning that enhances current (routine) operations as well as response to a pandemic. Because of the long duration of a pandemic, and the corresponding threat to business continuity (and, indeed, business viability), the team must balance the tension between student, staff, and faculty safety and health and continuity of operations.

CEPAR has designated three stages of pandemic influenza response: routine, which involves aggressive communications, hand washing protocols, and travel screening and restrictions; transitional, when all classes and face to face meetings are cancelled; and critical, when the only people on campus are those needed to sustain basic infrastructure operations. CEPAR's enterprise-wide plan establishes policies and procedures upon which the University, each campus, and each division will layer on its own plans.

Dr. Links also outlined a list of "ugly issues," such as payment of employees, "essential personnel" designation, and corporate security. These issues still need to be addressed by administration.

Spellings Commission Report

Dr. Lebo spoke to the Committee about the National Commission of the future of higher Education which was formed 1½ years ago and chaired by Charles Miller. Dr. Lebo summarized the federal critique and the action plan addressing accessibility, affordability and accountability. The AAU wrote a response indicating that the report is really about undergraduate education. Dr. Lebo showed the results of Hopkins own affordability study and pointed out that financial aid has increased by a higher percentage than tuition. Dr. McGill added that the in the Homewood Undergraduate programs there has been no net new revenue except for financial aid and instruction. As tuition covers about half of the cost of educating a student, instruction is subsidized by other programs and especially philanthropy. The Committee discussed the issue of accountability and the future of national testing and benchmarking. The current learning assessment is focused on process not results but future requirements may include individual student data. Dr. Lebo concluded with the implications of proposals moving forward at the Federal and State levels.

HopkinsOne Update

The Committee engaged in a thoughtful discussion of the future of the HopkinsOne Faculty Advisory Committee. Dr. Hemker introduced the topic of the structure of a successor group. Dr. Knapp suggested the group include faculty and administrators for efficiency and to manage both reality and perceptions between these groups. Dr. Links emphasized the necessity of adding communication people to the groups as perception can do more damage to the success of the project than deficiencies in the system. Several members of the Committee indicated that problems with training and ease of doing things were having a negative impact on staff, and Dr. McGill assured the group that training is being corrected now that is has transitioned to Human Resources. Dr. McGill asked that a few members of the FBAC discuss how to proceed with the successor committee to the HOFAC.

Provost Search

At Dr. Hemker’s request, Dr. McGill updated the Committee on the progress of the Provost Search. A committee has been assembled and will review CVs in May, conduct 12-14 interviews in June, and bring final 4-6 candidates for campus interviews.

Respectfully submitted,
Frederick W. Puddester

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Last updated 21Jun07 by dgips@jhu.edu