Approval of minutes Minutes of the meeting of May 16, 2001 were approved as distributed and will be put on the Committee website.

Preliminary Fiscal 2001 operating results as of June 30, 2001

The University closed fiscal 2001 with a general funds surplus of $16.4 million (Table 1, line 30). This compared favorably to the budgeted surplus of $4.9 million. The Applied Physics Laboratory (APL) and the School of Public Health account for most of the surplus. In addition to this surplus, the divisions added $86.9 million to reserves through the retention of designated funds and transferring unspent general funds to reserves. Most of these additional reserves are restricted, including the $58 million Cell Engineering gift at the School of Medicine and a $20 million gift for Malaria research at the Bloomberg School of Public Health.

Revenues

Total revenue was $2.1 billion, 11.1% more than budget and an increase of 12.4% over fiscal 2000 (Tables 1 and 2, respectively, line 17.) General fund revenue totaled $746.1 million. Total general funds tuition revenue for FY 2001 was $5.2 million (1.8%) more than budgeted. The Bloomberg School of Public Health experienced higher than expected enrollment in its Masters of Health Science program and the School of Advanced International Studies (SAIS) exceeded its estimate of 430 students by 40. The School of Nursing, however, reported a $910 thousand shortfall in tuition revenue. Enrollments were below budgeted levels in most programs. All other divisions ended the year at or slightly above their budgeted amounts.

F&A recoveries totaled $5.7 million (3.5%) more than budgeted for FY 2001. The Schools of Medicine and Arts and Sciences reported significantly higher recoveries compared to budget 4.0% and 9.2% over-attainment, respectively. JHPIEGO recorded recoveries 28% over budget for FY 2001. The Bloomberg School of Public Health reported lower than budgeted recoveries ($879 thousand) for the fiscal year due to lower than budgeted effective recovery rates and less spending on the Gates awards. Recoveries for the Whiting School of Engineering were also under budgeted levels ($125 thousand). Recoveries for both schools, however, are significantly more (14% and 16%, respectively) than were achieved in FY 2000.

Clinical services revenue for the School of Medicine was 3.5% higher than budgeted for FY 2001. This amount is $7.4 million (3.9%) higher than FY 2000 actual attainment. Chairman Steinwachs asked if there were any adverse effects on clinical activities due to September 11, 2001. Dr. Berg stated that the insurance companies are feeling most of the adverse effects.

Sponsored and designated revenue grew a robust 16.2% ($193.7 million) over fiscal 2000, totaling $1.4 billion. Compared to budget, there were significant increases in designated revenue. Gifts revenue exceeded budget by $97.5 million. Other designated funds exceeding budget include sponsored research ($27.6 million), affiliated organization revenue ($13.8 million) and other sources ($38.0 million).

Expenditures

Total spending was $1.98 billion, exceeding the original budget by $30.0 million, or 1.5% (Table 1, line 26). Most of the difference compared to budget was in sponsored and designated funds, which exceeded budget by almost 4%, reflecting additional research expenditures. Compared to fiscal 2000, total spending increased by $175 million, or 9.7%.

General fund expenditures totaled $758 million, which represents a 5.5% increase over fiscal 2000. All expenditure categories increased over fiscal 2000 levels, except at the Applied Physics Laboratory, and were slightly below fiscal 2001 budget ($12.1million, 1.6%).

Expenditures for sponsored and designated programs grew $135 million (12.4%) over fiscal 2000 spending. This year's spending also exceeded budgeted amounts, especially in instruction and research.

Divisional Results

The Krieger School of Arts and Sciences ended the fiscal year with a balanced budget within general funds. General fund revenue attainment exceeded budget by $2.9 million, driven by additional tuition revenue ($1.3 million) and facilities and administrative cost recoveries ($1.3 million). Expenditures came in at budget. In designated funds, sponsored research revenues totaled $53.5 million, a $6.2 million (13.3%) increase over budgeted amounts. The Center for the Social Organization of Schools (CSOS) was the primary contributor to this increase. Endowment payout revenue and designated gift exceeded budget by $8.4 million and $4.8 million, respectively, due primarily to under- budgeting in FY 2001.

The Whiting School of Engineering reported a balanced general fund budget, but also needed less designated funds to achieve this financial position. Net tuition revenues were $1.1 million over budget as enrollment was slightly more than expected and graduate student aid expenses were $600 thousand less than budget. Total general fund expenditures in FY 2001 were $1.5 million less than budgeted. Most categories of spending exceeded budget but were more than offset by under spending in operation and maintenance of plant ($1.6 million). Designated fund revenue exceeded budget by $4.7 million, principally due to gifts and endowment payout being recognized as received.

The Bloomberg School of Public Health finished fiscal 2001 with a total surplus of $14.4 million. The general funds surplus was $2.7 million, which was due to the combination of increases in tuition revenue ($1.4 million) and less student aid ($1.1 million). Facilities and administrative cost recoveries were slightly under budget due to lower than expected effective recovery rates. Total expenditures were slightly under budget, 2.5%. Designated fund revenues exceeded budget by almost $30 million, led by a $20 million gift for Malaria research and approximately $8 million in sponsored research. These additional revenues were partially offset by additional research expenditures, resulting in a $22 million operating surplus. Of this amount, the School transferred $10.5 million primarily to endowment principal and construction projects.

The School of Medicine ended fiscal year 2001 with a balanced general fund budget. Additional facilities and administrative cost recoveries ($4.3 million) and clinical revenues ($7.7 million) helped drive total revenues up $15.3 million (4.6%) over budget. General fund expenditures were only slightly over budget ($3 million). The School reported a surplus of $59.6 million in sponsored and designated funds due primarily to the $58 million Cell Engineering gift.

The School of Nursing general funds revenues were $1 million under budget primarily due to a $900 thousand shortfall in tuition due to lower enrollment. Facilities and administrative cost recoveries were also under budget by $196 thousand (25%). Modest increases were experienced in other sources and clinical revenue. The general funds expenses reflect a savings of approximately $300 thousand in instruction and research.

Applied Physics Laboratory ended fiscal 2001 with a $13.0 million general funds surplus, $8.6 million over budget. Revenues came in at budget, so the improved fiscal picture is driven by reduced expenditures in three categories. Cost sharing and new business expenditures were lower as a result of a smaller contribution to the rate stabilization fund. Capital projects were under budget by $3 million due to project timing. Finally, equipment purchases were down in an attempt to manage departmental overhead rates.

The Academic and Cultural Centers ended FY 2001 with a surplus of almost $500 thousand, consistent with budgeted amounts. These results mask considerable variation among the Centers. The Center for Talented Youth had a $1.1 million surplus, driven by significant increases in enrollment. Sponsored research increased significantly at JHPIEGO resulting in facilities and administrative cost recoveries 24% more than budgeted, which helped JHPIEGO finish FY 2001 with a $439 thousand surplus. The Johns Hopkins University Press experienced a $1.2 million deficit. Mirroring industry trends, the book division was especially hard hit. Slow book sales and increased returns contributed to a $1.3 million shortfall in the book division alone.

The School of Advanced International Studies ended FY 2001 on a positive note. The School experienced higher than expected enrollment, which generated an additional $1.2 million in tuition revenue. Expenses were higher than anticipated ($517 thousand) due to additional part-time faculty required by the increase in enrollment, faculty searches and renovations to the Nitze and Rome buildings.

The School of Professional Studies in Business and Education ended FY 2001 with $1.5 million more in general funds than budgeted. Tuition revenue exceeded budget due to strong spring enrollment and facilities and administrative cost recoveries were higher than expected as a result of increased educational research. Expenses were generally below budgeted levels.

Faculty salary competitiveness

Provost Knapp led a discussion on proposed changes to the way the University determines faculty salary competitiveness. The AAUP survey is not a good benchmark as it does not count medical student salaries but does include Business and Law programs which pulls the University's ranking down. A similar discussion with the Council of Deans was held earlier.

In order to make this analysis more meaningful, the following proposed change in methodology was made: the Committee member would work with the divisional dean in determining the important factors for their school and would also help identify their comparators. This would include answers to how competitive are the school's salaries to peer institutions? Who are our peer institutions? What are the recent trends on recruiting? Chairman Steinwachs asked what the timeframe for this was and did it tie in with the salary guidelines? Provost Knapp responded that there was no connection to the budgetary salary guidelines and would want this analysis to tie to the presentation made at the May Board meeting.

Dr. Young asked how last year's faculty survey would fit in with the proposed changes. Provost Knapp commented that the process of identifying retention and recruitment issues could be refined and done in tandem with the faculty salary comparisons. Last year's survey was discussed at the Council of Dean's but no clear conclusions could be made as the number of respondents was so small.

Dr. Knapp asked the Committee to consider what criteria is important to them when comparing their schools to its peers. Chairman Steinwachs suggested that a letter from the Committee be sent to the Dean's to open the discussion with the Dean's. Also, committee members would have their own piece of the survey responses to work from.

Associate Provost Zeller offered to draft a letter for the Committee and would work with Chairman Steinwachs in the next steps of the revised faculty process.

Capital projects

Dr. McGill provided an update on the University's capital projects. He spoke specifically about several major projects that are in various phases of development and their funding sources. Large Homewood campus projects include the Bookstore, Carnegie and Space Telescope, and a new chemistry building. The East Baltimore campus projects include the Broadway Research Building, and additions to the Bloomberg School of Public Health to house the Malaria Institute and other research. The Bayview campus is slated as a site for a future NIH building. It is estimated that this building would be approximately 500 - 550 thousand square feet and that NIH would be responsible for the financing of the building.

Dr. McGill commented on the move of administration and support services to off-campus locations in an effort to keep the core missions of the campuses in central campus space. This is seen at East Baltimore with the development of the Church Home facility and at Homewood in the move of several administrative functions to the Old Eastern High. Dr. McGill remarked that the Eastern High site offers additional expansion possibilities.

Chairman Steinwachs asked what are the potential financial risks of the projects. Dr. McGill responded that the composition of financing varies from project to project but each project is analyzed as to whether the project can pay for itself, including both debt and operational costs.

Future committee agenda items

The Committee discussed potential agenda items for the upcoming year. These items include: University budget and salaries; a comparison of administrative costs to our peers; endowment payout; status of University-wide information systems; and divisional presentations made by each Committee member.

Dr. Young reminded the Committee of its role in communicating the information back to each of their respective divisional committees. A suggestion was made of using the Gazette as an additional resource for communicating about the Committee's meetings.

Next committee meeting is scheduled for Tuesday, December 18, 2001, 9:30 a.m.

The meeting adjourned at 3:30 p.m.

© 2002 The Johns Hopkins University. Baltimore, Maryland. All rights reserved.
Last updated 07Mar02 by dgips@jhu.edu