MINUTES OF A SPECIAL MEETING OF THE
BOARD OF VISITORS OF
VIRGINIA COMMONWEALTH UNIVERSITY
April 19, 1995
A Special Meeting of the Board of Visitors of
Virginia Commonwealth University was held on Wednesday,
April 19, 1995, at 7 p.m. in the University Meeting Center
.
Present were Messrs. Whitworth (Rector), Flippen
Siegel and Weinberg; Ms. Teig; and Drs. Johnson and Smith.
Absent were Messrs. Arenstein, Framme, Meador and Townes;
Drs. Dombalis, Gilmer, Vaughan and Wootton; and Ms.
Vaughan. Also present were Mr. McCaskey, student represen-
tative to the Board; Drs. Trani, Dewey, Harris and Jones;
Messrs. Bruegman, Gehring and Ross; and Mesdames Burnside
and Price.
Mr. Whitworth called the meeting to order. The
purpose of the meeting is to review the budget prior to
being presented for approval. The President advised that
the Provost meets on a regular basis with the Executive
Budget Committee to make recommendations to the President
on the budget and to keep the faculty, staff and student
informed about the budget process.
The University Budget was discussed. There is no
bottom line like the Hospitals, other than a balanced
budget. Unspent State funds lapse (revert to the State
treasury) at year-end unless special approval is given to
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carry money forward. The University manages the budget
through six separate fund groups or programs including:
Educational and General Programs (E&G) describes
all operations related to the institution's academ-
ic programs including activities associated with
instruction, research, public service, academic
support, student services, institutional support
and operation and maintenance of plant. The E&G
budget comprises the largest share of the Universi-
ty budget and is the only program where there is
reasonable discretionary use of the money.
Sponsored Programs are research projects, training
grants and similar activities funded through reve-
nues received from governmental or private agencies
for specific purposes. Sponsored Programs include
both the direct and indirect overhead costs associ-
ated with the grant or contract. The direct costs
must be administered in accordance with the terms
of the appropriate grant or contract. The indirect
costs are returned to the University and are dis-
tributed according to Federal and State regulations
and institutional priorities. Indirect costs are
separately budgeted as Overhead Funds.
Overhead Funds (Indirect Costs Recovery Funds) are
reimbursements for costs associated with sponsored
programs and research activity. Periodically, the
institution negotiates an indirect cost rate with
the Federal government based on the following cost
categories: building and equipment use, operation
and maintenance of plant, general and administra-
tive costs, library, departmental administration
and sponsored projects administration.
Auxiliary Enterprise Programs are self-supporting
business entities that exist to furnish goods and
services to students, faculty and staff. At VCU
the Auxiliary Enterprise Programs include: Inter-
collegiate Athletics, Residential Services, Food
Services, Student Centers, Bookstores, Parking and
Transportation, Telecommunications and Student
Health Services.
University Funds are private funds which include
both restricted and unrestricted funds whose prima-
ry sources of revenues are gifts to University
departments, reimbursements to academic departments
from Associated Physicians, investment earnings,
and sales and services. University Funds are
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deposited and disbursed through local bank accounts
and are not subject to State appropriations.
Student Financial Assistance includes scholarships
and fellowships awarded to students without requir-
ing work or services in return for the receipt of
funds. Loans and work related programs also are
included, while graduate tuition waivers and the
undergraduate scholarship program are excluded
(included in E&G). Over 75% of the Student Finan-
cial Assistance budget is comprised of loan funds
provided by the Federal government which are admin-
istrated by the University.
Tuition and Fees policy for Virginia's colleges and
universities is set by the Governor and the General
Assembly through the Appropriation Act. Based on
language in the Appropriation Act, and the amount
of money appropriated for tuition and fees charges,
Boards of Visitors determine tuition and fees
rates.
The 1995-97 MCV Hospitals budget was discussed.
The budget demonstrates MCVH's commitment to repositioning
in the current health care market. Included in the budget
are savings projected as a result of on-going reengineering
efforts and physical downsizing plans. The budget bottom
line of $4.3M is only 1.1% of operating revenue. The total
profitability of the Hospitals is dependent upon commercial
and related payers. The insurer's are unwilling to recog-
nize MCVH expenses associated with graduate medical educa-
tion, unreimbursed indigent care, and medical school sup-
port. Reduction in hospital and medical school expenses,
state or national recognition of expenses associated with
graduate medical education, and full state funding of
indigent care (including medical school faculty) are essen-
tial if long term financial viability is to be maintained.
Only 11.3% of the Hospitals' payers pay what is billed, so
increasing rates is not a solution.
The 1995-96 budget will be presented to the Board
of Visitors for approval at the regular meeting on April
20, 1995.
The meeting was adjourned at 9:15 p.m.
