April 26, 2002
2001-2002 FINAL REPORT: BUDGET REVIEW COMMITTEE
The efforts of the Budget Review Committee in 2001-2002 focused primarily on two areas:
• Lack of transparency on uses of patent and licensing revenues in the University's 2001-2002 Operating Plan and Capital Budget.
• The University's bond rating and its status in capital markets.
In a productive meeting, Executive Vice President for Finance John Masten and Vice President for University Budget and Financial Planning Scott Norum provided the Committee with a great deal of insight into how patent and licensing reviews are reported in the budget. The Committee drew on this discussion to produce its Resolution Seeking Greater Budget Transparency, which the Senate adopted unanimously on December 14, 2001.
The Committee met again with Vice President Scott Norum in March to discuss how future editions of the University budget will address the points raised in the Senate's budget resolution. Vice President Norum described several tables/graphs to be included in the University's 2002-2003 budget that will provide a detailed summary of the uses of patent and licensing revenues.
This year Senator Kevin Collins (Alumnus) suggested that the committee examine how the University budget is viewed by outside financial institutions. To address this issue, Executive Vice President Masten, with help from Associate Treasurer Barbara Holahan, gave the committee a lucid crash course on the complex factors, including academic ones like faculty quality and selectivity in admissions, that shape the University’s bond rating. The Committee expressed some concern about the University’s debt levels, although the excellent AAA rating appears fully defensible at present.
Committee members agreed following this review that Columbia has benefited from excellent financial management in recent years and that University administrators deserve special recognition for this success. The Committee hopes to remain informed about the bond rating process and associated issues in future years.
The Committee, through tenured members Avery Katz and Frank Lichtenberg, continued its involvement with the Resources and Priorities Subcommittee of the University Planning and Budget Committee and the Budget Subcommittee of the Trustees’ Finance Committee.
Finally, the Budget Review Committee would like to express its appreciation to John Masten, Scott Norum, and Barbara Holahan for our collegial and productive discussions with them, which we hope to continue with the administration next year.
For the Committee,
William Blaner, chair