Executive Summary – FY 2019 Overview
The new RCM/ABB budget model has had a significant impact on CWU’s budget-and-finance dialogue. Under RCM, the university identified responsibility centers in the four academic colleges where the vast majority of academic instruction occurs. Each college is led by a dean, who is responsible for managing the resources provided to his/her college. Resources in the state and tuition fund are allocated entirely to the four colleges as they are earned, based entirely on student credit hours recorded in the prior year. Each of the colleges are then allocated the support costs proportionate to their revenues, with the exception of the Facilities Management costs, which are allocated based on square footage of the facilities each college uses. After support costs are allocated, not all responsibility centers can meet their expense obligations, so the Provost is able to subsidize (redistribute) resources from the “profitable” colleges to ensure the viability of all aspects of the university. Aside from the state and tuition funds, the remainder of the university (representing about 46 percent of operating revenues) continues the traditional budgeting methodologies, which are under the “you can only spend what you earn” paradigm. On balance, after three years of strong enrollment growth --possibly four with fall 2018--the university is on sound financial footing, with reserves in most areas to ensure sustainable operations. In spring 2018 Moody’s Investor Services reaffirmed CWU’s A1 Stable bond rating despite what Moody’s considers “thin” reserves and a cautionary statement about the need to grow operating margins. On a positive note, Moody’s noted strong growth and an overall positive story of continued strong management and investing toward the future needs of the university. These investments will need to lead to an improved operating margin in future years. CWU has continued to enjoy robust capital development. Samuelson Hall will open in fall 2018 as a computational sciences building. Other facilities under development in FY 19 include phase one of a Health Sciences building, a new 402-bed residence hall, expansion of recreation facilities, and a long-overdue upgrade to Tomlinson Stadium. What follows is a brief explanation of how the university has organized itself, an overview of the FY 2019 operating and non-operating budgets, and an updated six year forecast for each operating fund group.
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