In light of reports revealing a more than $1 billion dollar surplus in the University of Wisconsin System’s assets, the system president said he would push to enact new cash reserve policies.
UW System President Kevin Reilly said on WISN-TV’s “UpFront with Mike Gousha” he realizes the system will have a tuition freeze and he would discuss potential reserve policy changes with legislators and Gov. Scott Walker.
The state’s nonpartisan Legislative Fiscal Bureau recently discovered more than $1 billion dollars in total balances and $648 million in unrestricted appropriations as of last June.
UW System spokesperson David Giroux said campuses statewide have funding plans for $441 million of the unrestricted asset totals.
“That is one of the big misnomers of this whole issues that somehow there is one pot of money somewhere with one billion dollars in it,” Giroux said.
He said the overwhelming majority of these funds are already held at the campus level and within particular department divisions at each college and university. Giroux noted regents approve these appropriations annually when they vote on the UW System’s operating budget.
Giroux said the goal of the policy reforms Reilly will bring to the Board of Regents in June is to boost transparency regarding balances and reserves.
“President Reilly has been quite consistent the past week saying we need a policy on what our program revenue balances and our reserves should be going forward,” Giroux said.
Specifically, Giroux said the policy should set guidelines for minimum and target levels for carried-forward costs from year to year. He added the policy should dictate what each campus should do if reserves are less or more than these levels.
Giroux said it is too soon to say whether the new policy would also include a maximum for reserves.
“That policy needs to have some flexibility to allow for unique circumstances but provide for more consistent monitoring and compliance mechanisms than we have now,” he said.
Joint Legislative Audit Committee Co-Chairs Sen. Robert Cowles, R-Green Bay, and Rep. Samantha Kerkman, R-Randall, said in a statement on Friday the committee would pry deeper into the UW System’s assets by employing the non-partisan Legislative Audit Bureau to thoroughly review its revenue balances.
Committee member Rep. Melissa Sargent, D-Madison, said the bureau’s audit of the UW System will take a broader scope than usual to deal with the recently publicized UW System reserve balance.
Sargent said the audit will evaluate whether the UW System’s approximately $200 million in unrestricted, uncommitted assets “may or may not be enough.”
“It’s very important the rules of the game should be laid out clearly by all those involved,” Sargent said. “It only benefits the university system as well as the Legislature to clarify that at this point and have a goal as to what a reasonable amount of reserves are for university system of our size.”
Sargent said she hopes any changes are completed soon enough for the Joint Committee on Finance to consider the bureau’s findings before voting on the UW System’s biennial budget, but also acknowledged audits can be lengthy procedures.
Amid audits and accusations, much confusion remains regarding UW System’s balances and reserves, Giroux said.
“The only thing that’s clear is that nothing is clear,” Giroux said. “There’s some fundamental understanding about how the university is structured and how the university is worked that is missing from the conversation.”
