University deemed financially stable

SIU is in the top 20 percentile of financially stable universities nationwide, according to a study conducted by Bain & Company, a global management consulting firm.

The firm analyzed the financial health of more than 1,700 public and private nonprofit higher education institutions nationwide.

Published in “The Chronicle of Higher Education,” July 23, the study states the analysis grouped institutions into nine categories of financial health.

Both SIU Carbondale and SIU Edwardsville placed in the top 20 percentile, according to a university press release sent Monday. In the intermediate category, 28 percent were deemed at risk of slipping into an unsustainable financial situation, while 33 percent of the institutions were ranked in the lowest three categories as in an unsustainable financial condition.

SIU President Glenn Poshard said not only did SIU place in the top 20 percent, but it also placed at the very top category of being financially sustainable.

The study considered how well universities have handled smaller budgets.

Poshard said given the severe budget cuts the university has faced, the administration has done an outstanding job of balancing budgets for both schools.

In the university press release, Poshard listed the challenges the SIU system has faced. He said there’s been a $45 million decline in state appropriations, pension payments will now be transferred from the state to SIU as well as payments owed to retired employees for unused sick and vacation days. He said the university also has to self-fund the pay raises included in employee contracts, and finally SIU has to invest in necessary upgrades to physical facilities in order to improve the teaching and learning environment.

“We’ve had to manage this over a long period of time,” Poshard said. “There are people now who have complained in the past year that we’re not managing well, we’re overspending, and none of that is true.”

Rankings for the study were based on the pattern of change in two ratios between fiscal years 2005 and 2010, according to the university press release. The two ratios were the expense ratio and equity ratio.

Under expense, the ratio is between expenditures and revenues. A decline in the ratio means movement toward stronger financial health. SIU Carbondale showed a 2 percent decline and SIUE showed a decline of 9 percent.

The equity ratio is measured in assets less liabilities as a percentage of assets, according to the press release. An increase in the ratio shows movement to stronger financial health.

During the five year period, SIUC increased its ratio by 5 percent and SIUE increased its ratio by 8 percent.

The Bain study used data reported to the U.S. National Center for Education Statistics, according to the university press release.

 

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About Tara Kulash

You can reach Tara at tkulash@dailyegyptian.com or 536-3311 ext. 255.

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