Administration sees better budget outlook than previously expected

Provost+Jonathan+Holloway+said+last+year%E2%80%99s+budget+deficit+will+close+out+in+better+shape+than+the+University+previously+expected.+
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Administration sees better budget outlook than previously expected

Provost Jonathan Holloway said last year’s budget deficit will close out in better shape than the University previously expected.

Provost Jonathan Holloway said last year’s budget deficit will close out in better shape than the University previously expected.

Daily file photo by Colin Boyle

Provost Jonathan Holloway said last year’s budget deficit will close out in better shape than the University previously expected.

Daily file photo by Colin Boyle

Daily file photo by Colin Boyle

Provost Jonathan Holloway said last year’s budget deficit will close out in better shape than the University previously expected.

Alan Perez, Campus Editor

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University administrators say last year’s budget deficit will close out in better shape than they previously expected, though it is much higher than what was originally projected earlier this year.

Administrators had projected after the third quarter of last year that the deficit would reach $130 million, more than the $62.5 million privately projected before a January public announcement that administrators expected a deficit in the $50 million to $100 million range.

New calculations after that public announcement gave a bleaker forecast, and Holloway told The Daily earlier this quarter that the numbers kept shifting until it stabilized in the spring.

University President Morton Schapiro said in an interview on Wednesday that despite one-time $25 million unexpected expenses, the budget would be “$37 million better than expected,” though it was unclear what figure he was referring to.

Top administrators will present to the Board of Trustees on Friday a financial report for the 2018 fiscal year, which ended in August. The numbers for the year were finalized in recent weeks. But while the prospects are promising, administrators are cautious about repeating behavior that led to the shortfall.

“We’re going to be delivering good news to the Board of Trustees about the year that just closed, which affects the year going forward, of course,” Provost Jonathan Holloway said in an interview on Wednesday. “But we still have to maintain some real discipline.”

Holloway said the University has implemented some more permanent changes that will prevent the return of past issues, including a “robust and new” financial reporting system, accounting systems and financial practices. Northwestern’s financial standing could return to a surplus as soon as next year, he added, given the better-than-expected data that has rolled in since this summer.

University leadership, however, will “reserve the right to readjust” this year’s budget once the year’s data is considered, Holloway said, which can take months to reach administrators because of a lag in financial reporting. Academic units were told this year to cut 5 percent of their budget, and administrative units 10 percent. As a result, some student groups funded by departments are seeing their budgets cut. The University has also dialed back its custodial services and cut the ice rink outside Norris University Center. Roughly 80 people were laid off over the summer, and another 80 positions cut as a result of the deficit.

Administrators had previously planned to continue the deficit for a total of three years, including the past year, and restore a positive financial standing in the fourth. Now, the “University budget may be back in the black faster than expected,” he said.

University leadership will meet the Board this weekend, where they will present updated budget numbers and a proposal to begin a seven-year budget plan to outline NU’s timeline for building projects.

Email: aperez@u.northwestern.edu
Twitter: @_perezalan_

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