By Reilly Wright, Photo Editor
Current financial projections for the 2018-19 Ohio Wesleyan school year predict a deficit of $3 million that will cause expenses to be decreased or revenue to be increased.
From 2016-17 and 2017-18, OWU’s Board of Trustees approved endowment draws of more than $3 million to balance the projected budgets, but they expect the estimated $6.5 million total drawn to be paid back.
The fiscal 2018-19 does not anticipate an endowment draw. Thus, the current budget for the coming year currently forecasts a deficit of approximately $3 million. Lauri Strimkovsky, the vice president for finance and administration and treasurer, leads the budget projection and said balanced budget comes to either increasing the revenue or reducing expenses.
“Vice President Strimkovsky is leading us in a review of various options available to increase revenue and reduce expenses in order to achieve a balanced budget,” President Rock Jones said. “This will be an ongoing process over the coming weeks and months.”
Strimkovsky’s assessments show an expected focus on expenses including outsourced services and high-spending areas, including investigating health care for potential savings. Compensation-related elements such as salary and benefits will be examined while non-compensation expenditures such as major contracts and spending patterns will be reviewed.
Strimkovsky said this process of expenditure evaluations will involve large investigations as well as collaboration across OWU in coming months. While income items will be reviewed, such as accuracy in financial aid projections and growth in summer school enrollment, so will outcome items with housekeeping, Anthem Blue Cross and food services.
“This will not be a painless process as budgets at the individual department level will have to be reduced,” Strimkovsky said.
Strimkovsky said this budget process is in the beginning stages and a projected deficit so early is not unusual, but this large of a gap should be addressed now.
“Good stewardship and a commitment to financial sustainability dictate that we have a balanced budget; no institution can sustain deficit budgets over the long term,” Strimkovsky said.
The largest area for compensation is health insurance with an Insurance Committee currently looking into various plans that still provide good service with lower costs. The OWU health plan is self-funded up to $110,000 with no effort to develop a profit with the process.
Strimkovsky said Ohio Wesleyan’s budget is often observed by other institutions, banks and the U.S. Department of Education as a measure for financial health. Donors, students and parents use a balanced budget to determine their decisions in contributing to OWU.
“Our goal will be to implement reductions, while maintaining the high quality education and student life that is expected by our students and their families,” Strimkovsky said. “Again, this won’t be easy, but I am certain that, through collaboration, we can develop a realistic balanced budget.”