A Faculty Senate committee addressed the University’s financial trends and challenges during a meeting Friday, following an announcement earlier that week of major budget cuts to GW’s central administration.
Joseph Cordes, the chair of the finance committee, presented the overall state of the University’s finances from fiscal years 2014 through 2016, and shared options on how the administration might address financial challenges in the coming year. After a year of cutbacks in the administration and in departments, Cordes said there has been growth in the budget, but the University should still be looking at ways to increase revenue.
University President Steven Knapp announced in a letter Wednesday that a new round of budget cuts will be instituted to deal with long-term financial issues. He called for central units in the administration to make three to five percent budget cuts each year from 2017 to 2021, which could mean cutting 15 to 25 percent of current budgets overall.
At Friday’s meeting Knapp said those cuts were necessary because of the need for hearty undergraduate financial aid programs, which are run through the central administration and not through individual schools, and because the University is operating on a new budget model that shifts revenue from the central administration into the schools.
“For those reasons, we have to take a look at size of the central administration and that’s what has to come down,” Knapp said.
He added that faculty and staff members will be included in conversations about how to strategically make administrative cuts. So far cuts have included trimming departments like music and laying off 46 staff members.
Knapp said a group he assembled earlier this year focused on cutting down bureaucracy in the University is simultaneously working on how to “eliminate silly hoops to jump through.”
Cordes said during his presentation that the University’s cutback of 5 percent across all administrative divisions last year after graduate enrollment dropped helped to get GW on the right track, but the upcoming cuts will continue to increase the operating budget. Graduate enrollment increased for this fall semester, and Knapp said earlier this year that the jump would prevent future budget cuts.
“We now have improvement. It is less negative but still negative,” Cordes said. “We have done a number of different things, and maybe we can see the meadow but we are not out of the woods yet.”
Cordes also gave a preview of the University’s approved budget for next fiscal year, which includes a net revenue growth of just slightly more than 5 percent and a total expense growth of the same amount, according to the report. The report also showed that net tuition revenue would increase by more than 5 percent.
And as GW nears the on-campus enrollment cap agreed upon by University and D.C. officials, Cordes suggested moving programs online or to GW’s Virginia campus to admit more students.
He added that an increasing need for financial aid would also decrease revenue, and a possible D.C. Council bill mandating paid family leave could also negatively affect GW’s budget.
“Some of this stuff hasn’t happened yet but it’s definitely out there as a potential issue,” Cordes said.
