About University Finances

The university’s revenue sources

In 2013-14, our projection for the total revenue for the University of Saskatchewan from all sources is about $1 billion. The university is a complex organization with diverse activities. Sources of revenue at the university include:

  • provincial funding (including the annual operating grant);
  • federal funding (including funding from federal research granting agencies);
  • investment income;
  • tuition;
  • sales of products and services; and
  • donations.

Revenue is allocated to different funds or accounts as depicted below, similar to how you may manage your personal finances. For example, you may have a savings account, chequing account, TFSA and/or RRSP which are used for different types of activities. On campus, we have numerous different funds that are used to manage university finances, which are grouped by category, and fall into either the operating budget or other funds whose use is restricted (such as research and capital).  

2013-14 Consolidated Revenue

Similar to your personal accounts, the university is not able to move money from one fund to another, since many accounts are restricted, meaning the money is provided for specific purposes and we do not have the flexibility to reallocate it for other uses. An example of a personal account that is restricted is your RRSP, which can only be used for retirement savings and cannot be used to pay your household bills. An example for the university would be a research grant that is provided with specific instructions on what the money can and cannot be used for. Another example is capital funding, which is provided to support specific capital projects and cannot be used to balance the operating budget.

For more information on the university’s fund structure including definitions of the funds referenced above, please visit the Financial Services Division website.

 

Funding from the Government of Saskatchewan for operations

Funding from the province is determined annually and announced as part of the provincial budget every March. The university also annually submits a request to government for funding support, through the Operations Forecast. The Operations Forecast represents the annual request to government and is part of the overall financial planning work of the university. In addition, a four-year projection of revenues and expenses is developed to coincide with each institutional plan, and it is referred to as the Multi-Year Budget Framework.

The following table provides a summary of the university’s funding request to the provincial government for 2013-14 compared with what was actually received.

Funding for:

We requested:

We received:

Operating grant

$294.9 million

(2% increase over 2012-13)

$294.9 million

(2% increase over 2012-13)

Targeted initiatives (CERC, medical seats, Health Sciences operating, InterVac, etc.)

$23.1 million

$20.2 million

Capital projects (RenewUs, Health Sciences capital, etc.)

$63.4 million

$28.0 million cash grant 

The province provided cash grants for capital for 2013/14, which means that debt will not increase, but funding for annual principal and interest obligations of $15.3 million remains a concern.  Principal and interest repayments have not been formally guaranteed by the government, which places the university at risk given exposure to future changes in our environment, including constantly changing economic conditions.

 

The operating budget

Our current projected deficit specifically deals with the operating budget which is comprised of the unrestricted revenue in the operating fund. The majority of the operating budget (69 per cent) is funded by the provincial operating grant.

Our operating budget has a projected revenue total of $468 million in 2013-14. This is the money we have available to use for the general teaching and outreach operations of the university, including salaries and benefits, utilities and other basic operating expenses.  

2013-14 Consolidated and operating revenue

There are a few other considerations with regard to operating budget revenue:

  • Tuition: Unlike many other universities in Canada and North America, tuition is not set to balance the budget. Tuition is set according to a set of principles approved by the Board of Governors. These principles are: comparability, accessibility and affordability, and enabling quality. This means we will not be using tuition to generate the funds necessary to offset our growing expenses.
  • Donations: In times of economic constraint, raising revenue through endowments is difficult. Donors tend to give more one time donations which are unpredictable. Further, these funds tend to be for specific purposes, such as for a specific scholarship or naming opportunity, rather than for general operating or day-to-day expenses.
  • Variability in investment returns can have an impact on our revenue. We rely on investment income for our defined benefit pension plan, operating income and endowments.

 

Operating budget expenses

By far, the largest portion of our operating budget goes towards salaries and benefits. The university’s operating budget expenses in 2013/14 are projected to be $471 million, with about $344 million (73 per cent) attributable to salaries and benefits and about $127 million (27 per cent) attributable to non-salary expenditures.

 2013-14 Operating budget expense

The university has robust planning processes that look out over a four-year planning horizon. This allows us to see whether our operating budget expenses, if they continue on the same trajectory as in the past, are aligned with our operating budget revenues. It is important to note that many of our expenses are fixed over the term of collective agreements and other contractual obligations while our primary source of operating budget revenue – our provincial operating grant – is determined on an annual basis.

Our integrated planning process has allowed us to see that, over the current planning cycle, the university is facing a mismatch between growth in our operating budget revenue and growth in our operating budget expenses. Our expenses continue to grow but our revenue is not keeping pace and we do not expect our provincial grant will fully cover all of our operating costs.

If no action is taken, and our assumption of a 2% operating grant increase for the next two years is valid, our multi-year budget shows that a growing deficit (originally projected at $44.5 million annually) will arise over the planning cycle (2012-2016) due to this mismatch.

As indicated, our salaries and benefits account for 73 per cent of our operating expenses. Some 35 per cent of our operating funds are attributable to faculty salaries/benefits, 31 per cent to non-academic staff salaries/benefits, 4 per cent to senior administrators salaries/benefits, and another 3 per cent to other instructional and research staff salaries/benefits such as sessional lecturers, teaching assistants and research scientists—all of whom we strive to pay according to market-based principles in our efforts to recruit and retain outstanding faculty and staff.

The remaining 27 per cent of the operating budget covers expenses related to the following items:

  • Utilities and other expenses related to operating university buildings and grounds
  • Funding to colleges and units for non-salary expenses such as classroom, laboratory and office supplies, and employee development and training
  • Enhancements related to student services
  • Capital renewal (the RenewUS program)
  • Central support for research and scholarships
  • Targeted and directed initiatives (For example: College of Medicine accreditation, launch of a new College of Nursing program, Canada Excellence Research Chair program, International Centre for Northern Governance and Development)
  • Funding to leverage strategic opportunities (including the academic priorities fund and library acquisitions fund)

Market fluctuations can and do pose a challenge with respect to projecting these expenses. In recent years, we have not increased the funding to colleges and units to cover many of their non-salary expenses. As these expenses tend to increase annually, the units have taken on more responsibility for funding the costs of some of these items such as classroom, laboratory and office supplies.

For more information on the university’s operating budget, please see the 2013-14 Operating Budget Summary.