• BOT Chair M. Fiorentino and President D. Hodge outlined the updated guidance for all committees, emphasizing alignment with the President's goals, consistency in process, and collaboration across the Board.
• President Hodge announced that meeting scheduling and document preparation will now be managed by the President's office to streamline trustee review.
• The President introduced Dr. Travis Chambers as the new Chief Financial Officer (CFO), formally starting on December 1, 2025. Discussions regarding organizational changes will occur at the next meeting.
• Cabinet members are now assigned and encouraged to prioritize attendance at committee meetings.

Presentation of Audit (FY 2025)

Presenter: Jim Johnston, Bollus Lynch

Key Audit Findings

• Bollus Lynch issued an Unmodified, Clean Opinion on the Audited Financials Draft as of 10.15.2025.
• Statement of Net Position (as of 6.30.2025):
  • University assets decreased by $8.5M year-over-year, primarily due to depreciation/amortization.
  • Cash position is up $4.7M year-over-year, attributed to increased state appropriations and positive market conditions.
  • Net Position showed a decrease of $141M year-over-year.
• Income Statement:
  • Operating Revenue is down $2M, driven mainly by a $3.2M decrease in Tuition and Fee revenue due to decreased student enrollment.
  • Operating Expenses increased by $3.4M, primarily related to payroll, benefits, and $18.7M in depreciation.
  • The resulting Operating Net Loss was $64.4M (up from $59M the prior year).
  • State Appropriations of $62M (Non-Operating) offset the loss.
  • Overall change in Net Position was a decrease of $2.4M year-over-year.
• Audit Process: The audit was smooth, with no alternative treatments, no audit adjustments, and no disagreements with management, supporting the accuracy of the information.

Committee Discussion Highlights

• Q (M. Fiorentino): Primary financial focus area?
  • A (J. Johnston): Enrollment is the biggest issue, as expenses remained relatively flat.
• Q (M. Fiorentino): Concern over using reserves?
  • A (J. Johnston): The University is not yet at a point of concern. The final net position was a positive gain, and if debt obligations are met, the University is in a good financial place.

Audit Overview and 2026 Budget

Presenter: Robert Labonte

Audit Overview and Fund Clarification

• Mr. Labonte provided a clearer, more intuitive breakdown of the financial statements by fund type:
  • Unrestricted Funds (Controlled by Board, tied to the budget) showed a Surplus of $545,810.
  • Physical Plant included the majority of the deficit ($8M net deficit) due to **$13.6M in depreciation**.
  • Accrual Funds (Pension/Benefit liability) are booked by the University but largely covered by the State.
• Key Takeaway: While the overall net position showed a $2.4M deficit, the Unrestricted Funds remained positive, which is key for the operating budget.

2026 Budget Review

• The 2026 Budget uses a new structure aligned with the standard state format.
• Expense Projection:
  • Overall increase of $4.6M.
  • Payroll/Related Expenses increase of $3M (includes $1.3M for retro collective bargaining and $1.5M for increases/step promotions).
  • All other expenses increase of $1.7M (4% increase, in line with inflation).
• Revenue Projection:
  • Includes a $3M increase in State Appropriations.
  • Enrollment and Housing revenues are estimated to be $158,000 less than the prior year (cautious projection).
• Reserve Usage: $2M in reserve funds will be used to support the 2026 budget (a reduction from the preliminary $3.5M projection).

Closing Comments

• J. Johnston (Bollus Lynch) praised the clarity of Mr. Labonte's presentation, noting it provided a much clearer picture of day-to-day operations.
• President Hodge emphasized that enrollment and fiscal transparency will remain top priorities and thanked the finance team for their critical service during the transition.