University Senate                                                                                              April 25, 2003




Budget Review Committee


Annual Report, 2002-03


     The committee focused on four main issues this year. 


     We reviewed the University budget for 2002-2003 to assess the transparency of its presentation of the distribution of patent revenue expenditures and to assure compliance with the committee’s resolution on budget transparency approved by the Senate in December 2001.  We also reviewed plans for presentation of this information in the 2003-2004 University Budget, with the assistance Mr. Scott Norum, VP for University Budget and Financial Planning, who joined at two meetings.  It was the committee’s consensus that its earlier concerns about budget transparency had been addressed fully and appropriately.


     In January, the committee initiated study of budgetary matters related to the Health Sciences campus, seeking an understanding of potential deficits and remedies.  Mr. Kevin Kirby, Vice President for Administration at Health Sciences, explained to the committee learned that since grant revenues represent a large source of funds at the uptown campus, it is important for the University to ensure that it obtains sufficient funds from granting agencies to cover the full administrative costs associated with research grants.  The Health Sciences budget also is tightly interwoven with the budgets of New York-Presbyterian and other affiliated hospitals that are staffed with University faculty and that serve as sites for student training.  Consequently, financial health is influenced by the many economic and political factors at play in the health care industry.  Because of the size and complexity of the Health Sciences budget, the committee decided to keep studying it next year.


     With the recruitment of Professor Jeffrey Sachs to Columbia and the accompanying invigoration of the Earth Institute, the committee examined the possible impact on the University Budget.  Professor Sachs met with the committee to discuss his plans for the Earth Institute, and its influence on the future distribution of University resources.  It was clear from these discussions that the exciting intellectual activities fostered by the Earth Institute will be a source of significant revenues and expenditures.  The committee concurred that these merit continued review.


     Finally, the committee endeavored to establish a working relationship with the new university administration.  To this end, we met twice with Mr. Robert Kasdin, Senior Executive Vice President, to discuss the new administration’s budgetary philosophy, as well as structural changes in the management of University finances.  The two meetings provided clear insights into these issues.  In addition, the committee and Mr. Kasdin discussed the potential long-term financial consequences of the University’s current expansion plans.  We believe these meetings were very useful for establishing a channel that will allow the committee to receive budgetary information and to facilitate Senate input into budgetary decisions.


     Overall, the committee believes that the University’s financial health and management are sound, but we note two areas of concern, namely the overall debt burden and the Health Sciences budget deficit. Based on its interviews, the committee is confident that these concerns will be addressed effectively by the very able administrators charged with financial stewardship of the University. 


     Finally, the committee wishes to thank Mr. Scott Norum, Mr. Robert Kasdin, Mr. Kevin Kirby and Professor Jeffrey Sachs for their cooperation and candor in sharing their insights on the budget with us.


                                                                                                For the committee,



                                                                                                William Blaner, chairman