2.11.1 Financial Resources
The institution has a sound financial base and demonstrated financial stability to support the mission of the institution and the scope of its programs and services.
Judgement of Compliance:
Compliance
Narrative:
The University of Tennessee at Chattanooga (UTC) has a sound financial base and demonstrated financial support that adequately supports the mission of the University and the scope of its programs and services.
See Comprehensive Standard 3.10.1 for more information about the recent financial history of the University.
Institutional Audits
UTC is part of the system-wide audit of the University of Tennessee. The audit reports issued by the State of Tennessee, Comptroller of the Treasury, Department of Audit, Division of State Audit for FY 2008-2009, FY 2007-2008, FY 2006-2007, and FY 2005-2006 report unqualified opinions on the fairness of the presentation of the financial statements. In a letter dated March 1, 2010, the UT Treasurer affirms the Chattanooga campus of the University of Tennessee is fiscally sound and financially solvent.
Unrestricted Net Assets
The 2009 Financial Profile Form A shows the University holds total assets of $208,056,810 and total liabilities of $63,238,137. The total debt is $43,005,322, which is only 20% of the total assets. The 2009 Financial Profile Part A has a statement of net assets for the University of Tennessee at Chattanooga which shows the Net Assets invested in capital assets net of related debt, restricted expendable, restricted nonexpendable, and unrestricted net assets as of June 30, 2008.
Annual Budget
UTC operates under an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.
Preceded by Sound Planning
The strategic plan adopted and approved by the University Of Tennessee Board Of Trustees establishes four key initiatives that focus on excellence in teaching, research, and service. The institution seeks to allocate its financial resources to meet the strategic plan initiatives.
The FY 2008-2009 budget preparation was initiated by a memo dated January 7, 2008 from the Vice Chancellor of Finance, Operations and IT. Attached to the memo were the budget guidelines and schedules to be completed. The memorandum instructed the departments to develop a three-year fiscal strategy and link the budget to our strategic initiatives:
- Partnerships for Students (Teaching and Learning)
- Partnerships for Education
- Partnerships for Diversity
- Enabling Partnerships
The budget instructions included a schedule of budget hearings beginning February 25 through February 29, 2008 that were open to the public and included presentations by the Faculty Senate, Employee Relations Committee (non-exempt staff), Exempt Staff Council, Student Government, and the Council of Department Heads.
The annual budget process begins at the grass roots level by the organizational managers and is submitted to the respective area managers and then to the appropriate divisional Vice Chancellor. The University Planning Resources and Advisory Council (UPRAC), with members of the Executive Team, initiates budget hearings to formally review requests and set institutional priorities.
Subject to Sound Fiscal Procedures
The University has adhered to a conservative approach in budgeting revenues and expenditures demonstrated by the change in current surplus. The current surplus in fund balance in FY 2005-2006 was $3,014,360. The current surplus in fund balance at the end of FY 2008-2009 is $4,374,488. During the same time frame, the E & G budget including Auxiliaries went from $92,062,037 to a total of $107,009,766.
Approved by the Governing Board
A proposed budget with input from the UPRAC and the Executive Team containing revenue and expenditures is submitted to the Chancellor for final review and approval. The Chancellor then authorizes the Vice Chancellor for Finance and Operations to prepare a final budget for submission to the University of Tennessee-University Wide Administration and the Chief Financial Officer of the University of Tennessee. The Chief Financial Officer consolidates all budget requests for the University System and submits them to the Board of Trustees for review and action. The University is required by the State of Tennessee to have a balanced budget. The FY 2008-2009 budget was approved by the UT Board of Trustees on June 20, 2008 (pp. 8-10).
Documentation:
- UT State Audit Report, 2008-2009
- UT State Audit Report, 2007-2008
- UT State Audit Report, 2006-2007
- UT State Audit Report, 2005-2006
- Letter from UT Treasurer regarding audit report
- 2009 Financial Profile
- 2009-10 Operating Budget
http://www.utc.edu/Administration/BusinessAndFinancialAffairs/0910files/UTCBaseBudget2009-10.pdf - Budget Planning Memo, January 7, 2008
http://www.utc.edu/Administration/BusinessAndFinancialAffairs/0809files/BudgetMemo2008-09.pdf - 2008 Budget Hearing Schedule
http://www.utc.edu/Administration/BusinessAndFinancialAffairs/0809files/Att2BudgetHearingSchedule2008.pdf - Annual Budget Process
http://www.utc.edu/Administration/BusinessAndFinancialAffairs/0809.php - UPRAC Membership
http://www.utc.edu/Administration/StrategicPlan/UPRACMembers.php - Statement of Balance, 2005-06
- Statement of Balance, 2008-09
- Board of Trustees Meeting minutes, June 20, 2008, Approval of 2009 Operating Budget
http://bot.tennessee.edu/minutes/bot20080620.pdf
