Budget Update and Finance Overview

Transition and New CFO

• The President thanked Bob Labonte and Heidi Swift for their work in managing the budget over the past year.
• Dr. Travis Chambers was officially welcomed as the new Chief Financial Officer (CFO). This was his first subcommittee meeting, and Bob Labonte was present to provide context.
• A new era of financial management is anticipated, with the new CFO focusing exclusively on financial operations, separate from capital planning.

FY26 Budget Summary (Mid-Year Report)

• Dr. Chambers presented the unaudited mid-year report for the FY26 budget, covering actuals up to December.
• Revenues:
  • Most fall and spring revenues for Tuition and Fees have been collected.
  • Housing and Dining Services revenues exceeded the projected budget, attributed to conservative budgeting and an uptick in housing occupancy, notably 78 students now living in the previously empty Herlihy Hall.
  • A 4% fee increase was noted.
  • Investment Income is significantly below projection, which the CFO intends to investigate.
• Expenditures:
  • Regular Employee Compensation and Pension/Insurance are on track (around 40-50% utilization).
  • Administrative Expenditures and Operational Supplies (which includes library periodicals) have higher utilization (around 76-77%), noted as typical due to front-loaded costs like software.
  • Construction and improvements of building operations are at 70% utilization.
  • Financial Aid and Scholarships (Benefits programs) are at approximately 50%.
  • Loans and Special Payments (MSCBA debt payments) are below track, and the CFO plans to review the payment schedules.

Financial Strategy and Controls

• Position Management: The President stated that "position management" has been the primary strategy for controlling expenses over the past 18 months, aiming for a net-neutral impact on staffing costs while supporting critical student needs (like counseling staff).
• Procurement Process Improvements: Dr. Chambers' immediate focus for the remainder of the fiscal year is to implement greater controls over expenditures, specifically:
  • Improving procurement processes, including purchase orders and PCard (Purchasing Card) procedures.
  • Addressing the concern of late reconciliation for PCards, where up to $1 million in purchases may be outstanding.
  • Implementing a strict process to ensure PCard expenditures are reconciled and allocated monthly, not allowing reconciliations to go past 30 days.
• Budgeting Culture Shift: A longer-term goal is to shift the campus culture away from a "spend it or lose it" mentality towards more intentional, transparent budgeting and rewarding good fiscal management.

Next Steps

• A formal thank you to Bob Labonte and Heidi Swift will be given at the next board meeting.
• Dr. Chambers will continue to implement new controls over expenditures, focusing first on procurement and PCard reconciliation.