Spring Break
Budget faces $10M gap
by Jillian Wagner
News Editor
News | 10/7/08
Posted online at 5:25 AM EST on 10/7/08
/ Last updated at 10:35 PM EST on 10/7/08
As a result of the recent financial crisis the American economy is facing, it is projected that the $336 million University operating budget for fiscal year 2009 will suffer a $10 million gap, President Jehuda Reinharz announced last week.
In an e-mail sent to the Brandeis community last Friday, Reinharz wrote, "I have approved a plan to close the gap this fiscal year. The plan calls for the use of one-time resources of $5 million, and another $5 million to be provided through expenditure reductions."
Executive Vice President and Chief Operating Officer Peter French explained that the University's gross operating budget is $336 million. He said, "There's about $195 million worth of expenditures that are fixed or are the type of expenditures that you either don't want to cut or it makes no sense to cut." For example, he said, "If you've got a program funded by gifts, and it's fully funded by gifts, you don't have any gain by cutting because the gift is restricted to that program."
Reinharz also wrote, "This $5 million expenditure-reduction target represents about 3.5 percent of the University's base operating budget, which excludes financial aid, sponsored research, and gift-funded programs. I have asked that the majority of the reduction target be accomplished through expenditure reductions in such areas as equipment, consultants, memberships, travel, events, and supplies."
According to French, the only department that will be exempt from any expenditure cuts will be Public Safety.
Vice President for Budget and Planning Frances Drolette said, "Another large category [of fixed expenditures] is depreciation. We're required to depreciate our physical plant, and therefore we take that out." In an e-mail to the Justice, Drolette explained, "Depreciation is a required accounting practice to recognize that each year the building values decrease as a function of use and time."
French explained, "The $10 million, as a percent of the [$336 million gross operating budget], is 2.9 percent. The $10 million is 7 percent of what we call the controllable base," or the $141 million left over after the $195 of fixed expenditures are taken out of the equation.
In an e-mail sent to the Brandeis community last Friday, Reinharz wrote, "I have approved a plan to close the gap this fiscal year. The plan calls for the use of one-time resources of $5 million, and another $5 million to be provided through expenditure reductions."
Executive Vice President and Chief Operating Officer Peter French explained that the University's gross operating budget is $336 million. He said, "There's about $195 million worth of expenditures that are fixed or are the type of expenditures that you either don't want to cut or it makes no sense to cut." For example, he said, "If you've got a program funded by gifts, and it's fully funded by gifts, you don't have any gain by cutting because the gift is restricted to that program."
Reinharz also wrote, "This $5 million expenditure-reduction target represents about 3.5 percent of the University's base operating budget, which excludes financial aid, sponsored research, and gift-funded programs. I have asked that the majority of the reduction target be accomplished through expenditure reductions in such areas as equipment, consultants, memberships, travel, events, and supplies."
According to French, the only department that will be exempt from any expenditure cuts will be Public Safety.
Vice President for Budget and Planning Frances Drolette said, "Another large category [of fixed expenditures] is depreciation. We're required to depreciate our physical plant, and therefore we take that out." In an e-mail to the Justice, Drolette explained, "Depreciation is a required accounting practice to recognize that each year the building values decrease as a function of use and time."
French explained, "The $10 million, as a percent of the [$336 million gross operating budget], is 2.9 percent. The $10 million is 7 percent of what we call the controllable base," or the $141 million left over after the $195 of fixed expenditures are taken out of the equation.
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