For policy nerds fascinated by the University of Virginia as an ongoing business enterprise, there was all sorts of interesting financial information in the Auditor of Public Accounts’ presentation Thursday to the Board of Visitors. Fiscal Year 2023 revenues for the combined health system and academic division closed out at $4.3 billion. Revenue from student tuition and fees was $690 million, philanthropic gifts amounted to $232 million, and investments (mostly from the endowment) generated another $190 million.
Oh, and then there was this note tucked away in the prepared Board materials but mentioned only in passing during the meeting: The McIntire School of Business — a business school where they teach things like, oh, I don’t know, like accounting — has been operating at a deficit.
Here’s how the Auditor of Public Accounts summarized the concerns raised in its audit of UVa finances (my bold):
The Provost and Dean of McIntire are working on a plan to resolve the financial challenges McIntire faces (P1 issue). The plan is expected to be completed at the end of the fiscal year 2025 budgeting (June/July 2024). We will update and reissue the report once an action plan is received.
In addition to the finding on operating deficits, there were four (4) Priority 2 observations addressing gift card use, user access reviews, third-party data privacy, and academic partnership agreements. Three (3) Process Improvement observations covered key performance indicators, duplicate payment controls, and account certifications.
Here are some definitions to make those observations more comprehensible:
A P1 (Priority 1) issue signifies a control and/or process deficiency of
sufficiently high risk that it provides minimal or no assurance that
institutional objectives will be achieved. Management must take
immediate corrective action to mitigate Priority 1 deficiencies.
A P2 (Priority 2) issue signifies a control and/or process deficiency that
hinders the effectiveness and efficiency of unit level operations,
potentially impeding the attainment of institutional objectives.
Management must take timely corrective action to mitigate Priority 2
A process improvement item signifies an opportunity to achieve
additional control and/or process efficiencies.
Provost Ian Baucom told the Board of Visitors that “we’ve been meeting with McIntire on a biweekly basis” to work through the deficiencies.
Immediately thereafter, the Board retired into a closed session to address a “personnel issue.” No action was announced when it came back into public session.