Budget FAQs


2014/15 Consolidated Financials FAQs

Click here to read the audited financial statements for 2014/15, approved by the UBC Board of Governors.


2013/14 Actuals FAQs


2014/15 Consolidated Financials FAQs

The audited 2014/15 financial report states that UBC ended the year with a surplus of 31M. Why is this?

UBC completed the 2014/15 fiscal year with a consolidated surplus, which is similar to previous years. In most cases, the University completes the fiscal year with some level of surplus within its consolidated budget. However, it is important to note that the consolidated budget is separate to the University’s operating budget. The University’s operating budget for 2014/15 was balanced for the year, and did not include a significant surplus.

With regard to the consolidated surplus, this came about as a result of two key factors. The first relates to how UBC invested its endowment funds over the year. Investment returns on endowment funds contributed to the surplus, but these funds are restricted and not available for spending.

The second key factor relates to timing differences related to ‘capital assets’. In both cases, the surplus reported as a result of these adjustments is not available to offset operating costs.

^ Back to top


What is the difference between UBC’s consolidated budget and operating budget?

In addition to the annual operating budget, UBC’s consolidated budget includes funds that can only be used for specific purposes, such as research, capital and endowment. Investment returns from these funds are restricted and cannot be used to offset costs within the operating budget.

^ Back to top


If UBC was on track to report a surplus for 2014/15, why are fees going up? Why are some units still being required to introduce saving measures? Can’t the University use this surplus to manage financial pressures instead?

Since investment returns on endowment funds are restricted, they cannot be transferred to UBC’s annual operating budget. While the University’s 2014/15 operating budget was balanced, we continue to face ongoing financial pressures which require us to identify efficiencies and new ways of working. Among other things, these pressures include:

  • Reduced reliance on provincial funding
  • Capped domestic tuition rates
  • Increased competition for research funds

In response to these challenges, UBC has focused on exploring new revenue opportunities and identifying organizational improvements before considering significant cost saving measures. This approach will continue over the coming year.

^ Back to top


2013/14 Actuals FAQs

I HEARD THAT UBC HAS BEEN IN DEFICIT. IS THIS STILL THE CASE?

No. In September 2014, UBC identified that the FY 2014/15 budget was in a structural deficit position. We took immediate action and, as a result, are currently on track to report a balanced FY 2014/15 budget.

Our improved financial outlook, in the immediate term, is the result of short-term control of central administration expenses, which included a formal review process for all hiring activity. In particular, hiring for some open positions was delayed until FY 2015/16.

Our Faculties have also made a significant contribution to our bottom line by holding to (and in some cases improving on) their mid-year financial projections, made possible by their own reviews and control of expenditures.

^ Back to top


WHY DO WE NEED TO FIND ADDITIONAL SAVINGS IF WE HAVE MANAGED TO BALANCE OUR BUDGET?

The delay in hiring helped mitigate the immediate pressures on the FY 2014/15 budget, but it did not impact income or expenses for FY 2015/16. The reality is that a structural deficit requires us to address operating costs that are higher than our income. UBC is committed to developing a budget framework that ensures long-term financial sustainability.

The FY 2015/16 and FY 2016/17 budgets will be stressed as a number of decisions over the past few years will add additional expenses. At the same time, we are committed to executing UBC’s strategic plan, in order to protect and build its core academic mission.

As our operating costs increase, we are exploring new ways of working, which will help generate cost savings, create efficiencies as well as identifying new revenue sources. We are reviewing all our administrative units, as well as having discussions with Deans and Department Heads.

^ Back to top


WHICH STRATEGIC PROGRAMS/INITIATIVES WILL BE SUPPORTED BY THIS INVESTMENT?

We plan to invigorate our research strength through investments in teaching and learning, in order to enhance the academic experience. In addition, we recognize the need to invest in research faculty, graduate students and post-doctoral fellows.

We plan to invest in leading-edge research, flexible learning and undergraduate student support (wellbeing, mental health, career counseling). We will also continue to support international recruitment as well as investing in campus infrastructure.

We believe that by making these investments we will support our strategic goals, while ensuring our budget remains balanced for the long term.

^ Back to top


WHAT IS THE TIMELINE FOR THESE COST SAVINGS? IS THIS PERMANENT?

The process of identifying cost savings is not new, as the University regularly explores efficiencies in order to ensure continuous improvement in our programs.

However, we have recently adopted a renewed focus as part of a wider initiative to ensure UBC’s budget is sustainable for the long term. We believe that the University should continually work with its faculty, staff, students, alumni and other key stakeholders to consider improvements, in a constructive and collegial atmosphere.

Collectively, we can ensure the budget continues to be balanced and sustainable.

^ Back to top


THE CONSOLIDATED EXPENSES FROM 2013/14, INCLUDE $23M DRAWN FROM PREVIOUS YEARS’ REVENUES. WHY CAN’T UBC CONTINUE TO DRAW DOWN ON RESERVES?

In previous years, UBC has drawn down on reserves but we recognize that this is not a long term solution. This is reflected in our approach last Fall, where we responded to a potential deficit by introducing controls on central administration expenses. By taking a renewed approach to revenue streams and cost savings, we aim to generate a balanced budget that remains sustainable and allows us to invest in the University’s strategic priorities. In order to be successful, we cannot rely on our reserves. We need to ensure that the university balances both revenue and expenses, in order to be consistent with our mandate from the provincial government.

^ Back to top


WHAT ELSE IS UBC DOING TO IDENTIFY REVENUE SOURCES?

There are a number of ways in which UBC is working to increase our revenue base. We are carefully reviewing all income sources, developing novel traditional and professional programs, as well as continuing to offer outstanding programs that attract students from BC, Canada and around the world.

^ Back to top


WHERE DO THE TUITION AND HOUSING FEE INCREASES FIT IN THIS?

Tuition fees flow largely to Faculties, providing additional support to deliver teaching, learning and research. A smaller share of the increased tuition flows to support student aid.

With regard to the housing increases, this additional funding will support a variety of initiatives including student mental health, access to on-campus student housing, and the continued growth of student housing to help build capacity.

^ Back to top


WHY ARE THE RESEARCH AND ENDOWMENT FUNDS NOT AFFECTED?

Research funds and the UBC endowment fund are not part of our operating budget. Those funds are required to be used for specific purposes and will continue to be spent in accordance with their own governance models.

^ Back to top


UBC quotes a research budget of $564M. Why is this different from the amount of research funds spent?

The $564 million refers to the funding awarded in a given year to UBC researchers. This differs from the research funds spent for a number of different reasons. Major elements behind the difference include the fact that money spent by UBC researchers at our affiliated hospitals and institutes does not always appear as a UBC research expense. Certain research funds, such as the federal indirect costs program are also not categorized as research expenses, and not all research funds are expensed in the same year that they are awarded.

^ Back to top


Why do we need to find new sources of revenue, when we are coming to the end of a successful fundraising campaign?

The funds raised through the start an evolution campaign are given by donors and earmarked for student learning, research excellence and community engagement. Donors give to specific areas that they are passionate about, and the funds must be spent in these areas.

^ Back to top

 

GOT A QUESTION?
Email us: ubc.budget@ubc.ca