Summary of the Financial Situation and the Priorities of OSU

We will demonstrate that:

1. OSU is in very strong financial condition

2. The furloughs were unnecessary

3. The decline in the State appropriation will not have a significant effect on OSU

4. The OSU administration has not been true to the core academic mission

1. OSU has over $92 million in reserves, and these reserves increased almost $40 million from 2009 to 2010

Source: OUS Audited Financial Statements; specific OSU information

These reserves also represent liquidity, as the end of 2010, OSU had over $300 million in cash and investments (and this does NOT include the endowment which separately has over $400 of assets)

Conclusion: The furloughs of 2009-10 were completely unnecessary. How can a university with over $90 million of reserves and $300 million of cash furlough employees?

2. During 2010, OSU earned a $50 million "profit," as revenues were more than $50 million greater than expenses. This represented the best year in the last four years, and again demonstrates how immoral it was to furlough employees

Source: OUS Audited Financial Statements; specific OSU information

3. A decline in the State appropriation will not be significant for OSU, as the State is not the largest revenue source, and total revenues have been increasing each year

Source for items below: OUS 2010 Audited Financial Statements; specific OSU information

The chart below demonstrates that over the last four years, the revenue from the State has been relatively flat.

- However, all of the other major revenue sources have increased, more than making up for the decline in the State appropriation in 2009.

- As we move forward, the removal of the Federal stimulus money is a very small fraction of total revenues in 2010 (around 1% of total revenues), so this will not be a factor.

- The expected 15% decline in the State appropriation can also be alleviated by increases in the other revenue sources, which have increased each and every year.

4. The OSU Administration has not been true to the core academic mission.

The chart below examines the percentage changes in expenses for the last four years. What we see is that core instructional expenses increased only 6% from 2007 to 2010: however, pure administrative costs in the form of institutional support increased 14% over this time period.

Conclusion: The OSU is not being true to the core academic mission, as they are putting more resources into administration than instruction. This is not appropriate.

Notes:

- Auxiliaries include housing, dining, the bookstore, and athletics

- Public service and academic support are also mostly administrative functions

- Source: OUS Audited Financial Statements; specific OSU information

Faculty salaries at OSU are last among their peer institutions at both the full and associate level. Source: 2009-10 AAUP Salary Survey; Peer Institutions: OSU Institutional Research

Note that faculty salaries and benefits are only 10% of total OSU expenses.

The most significant evidence that the OSU administration has not been true to the core academic mission can be seen in the changes in the number of faculty and student credit hours over the last four years. OSU now has record enrollment; however, the OSU administration has not increased the number of faculty, and in fact has decreased the professorial faculty group.

What has this led to?

- Much larger class sizes

- Fewer section offerings for students

- A reduced quality of education for students

- So where has their increasing tuition dollars been going? Into administrative costs.