Tim Slottow, the University’s executive vice president and chief financial officer, spoke about the state of the University’s financial health at the Senate Assembly meeting yesterday.
At the end of fiscal year 2011, the University had about $15 billion in assets across all three campuses and the University of Michigan Health System, according to Slottow. However, the University’s $7.8 billion endowment, a restricted fund used to support the University’s operations, is not included in this figure, he said.
The University currently has a debt of about $1.8 billion, which is expected to climb to $2.2 billion over the next five years. However, Slottow said this is not a problem for the University in relation to its assets.
“The relationship of the total assets to the total liabilities is quite healthy,” he said. “The relationship of notes and bonds to financial assets is also quite healthy. So from a strictly ratio standpoint, the University is in good shape.”
According to Slottow, the University has about $1.5 billion of liquid assets, or money needed in order to pay faculty and staff salaries, which is sufficient to provide a cushion for daily expenses. The University tries to keep expenses low, however, in order to invest the University’s money elsewhere and accrue profit.
“A sophisticated financial group in the treasurer’s office wants to have as little liquid as possible in order to invest the rest in something that actually has some return on our financial assets,” Slottow said. “We aren’t overly aggressive. I also would say we’re not overly conservative.”
Engineering and Radiology Prof. Kimberlee Kearfott, vice chair of the Senate Advisory Committee on University Affairs, asked Slottow when the administration will start investing endowment money in faculty start-ups.
Slottow said University President Mary Sue Coleman supports investment in a new program called Michigan Investment in New Technology Startups because analysis of University faculty start-ups over the past 20 years has shown a 17-percent annual return, which makes it a safe investment.
At the University’s Board of Regents meeting on Thursday, Slottow will present the MINTS program that proposes investing up to $500,000 — with the potential of an additional $1 million — in University faculty start-ups. He projects that there will be an investment of about $20 million to $30 million in MINTS over the next 10 years, or $3 million each year.
“It’s good for faculty, and it’s good for the endowment,” Slottow said.
Faculty discusses resolution on peaceful protest on campuses
Later in the meeting, the Senate Assembly discussed a resolution expressing the faculty’s solidarity with peaceful protests on college campuses, specifically at the University.
The resolution was drafted in response to the recent events at the University of California, Davis and the University of California, Berkeley that led to police violence against peaceful protesters, SACUA Chair Kate Barald said.
“Not that there’s any incident here that led to this, and certainly, we hope that no incident will have a need for this kind of resolution,” Barald said.
Despite unanimous support for the resolution, the Senate Assembly did not meet quorum and therefore, could not pass the resolution discussed at the meeting. SACUA members passed the resolution at their meeting last week.
Senate Assembly discusses resolution regarding reporting of criminal behavior
The Senate Assembly also discussed a resolution that expresses sympathy and support for the survivors of the Pennsylvania State University sex abuse scandal. The resolution cites potential causes, such as inequities in power between survivors and perpetrators and among people reporting the crime, as well as an underreporting of criminal behavior.
It also includes suggestions for action that can prevent similar events from occurring at the University, such as educating the community and developing training programs for faculty and staff.
“The objective here was to try to get information to people who could act as early as possible in the process because I think all of us noted that the main issue beyond the act and the lack of reporting was the cover-up,” Barald said.
Last month, former Penn State football coach Jerry Sandusky was charged with child sex abuse. Former Penn State head football coach Joe Paterno and former Penn State President Graham B. Spanier were dismissed from their positions, as a result of the incident.
Barald said the resolution — passed by SACUA last week — is important because there are 92 entities on campus that employ people who deal with minors — including high school students and small children — for day camps, day care, sports programs and music camps.
Earlier in the meeting, Slottow mentioned that in Coleman’s e-mail regarding the Penn State scandal, which was sent to all students and faculty on Nov. 15, included was a link to an anonymous hotline and compliance website on which individuals can report when they observe something they believe to be “unethical, inappropriate or illegal.”
Correction appended: An earlier version of this story incorrectly reported the percentage of annual return of University faculty start-ups over the past 20 years.