FINANCING HIGHER EDUCATION

AN OVERVIEW OF CORNELL UNIVERSITYS BUDGET AND PLANNING

AMANDA SHERMAN
POST UNIVERSITY
INTRODUCTION

Review of Cornell Universitys Budget

Institutional Mission
Finance Department Organization and Structure
Types of Budgets Employed
Budget Process Explained
Factors that Influence Budgeting
Tools Used in the Budget Process
Critique of the Budget Process
Analysis of the Campuss Overall Financial Strategy
INSTITUTIONAL MISSION

Cornell is a private, Ivy League university and the land-grant university for New York State. Cornells
mission is to discover, preserve, and disseminate knowledge; produce creative work; and promote a
culture of broad inquiry throughout and beyond the Cornell community. Cornell also aims, through
public service, to enhance the lives and livelihoods of our students, the people of New York, and others
around the world.
(Cornell University, n.d.)
ORGANIZATIONAL CHART EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER

President
(Interim)
H. R.
Rawlings III
Senior Director
Cornell Real Executive Vice
Estate President and Executive Staff
Assistant
J. Thomas CFO
S.M. Radloff
J. M. DeStefano

Chief VP for Associate VP

VP for IT University VP for
Investment VP for Budge Properties Chief Cornell Env. Health
and CIO Auditor Financial
Officer and Planning Infrastructure Police and Safety
G. C. and Planning Affairs
D. A. Lifka K. M. P. J. Streeter K. R. Zoner C. M.
Mueller W. E. Sitzabee Stallmann G. L. Hector
Miranda
DIVISION OF BUDGET AND PLANNING ORGANIZATION AND
STRUCTURE

Capital Funding & Priorities Committee

Provosts Capital Planning Group
Purpose: Responsible for the oversight of
Purpose: Develop and execute strategy to
capital activity for the university. Capital is
meet major capital needs, including deferred
broadly defined to include building, leases,
maintenance needs, for individual units and
equipment and administrative systems.
the campus as a whole (Cornell University,
n.d.). Committee meets monthly and consists of
nine members including Hunter Rawlings III,
Committee of thirteen members including
the interim President. (Cornell University,
Provost and chair Mike Kotlikoff.
n.d.)
TYPES OF BUDGETS

There are two types of budgets in place at Cornell University, the

Operating Budget and the Capital Budget. The Operating Budget is a
detailed depiction of the influx and expenditures of the University as a
whole. It includes all donations large or small and every salary. The
Capital Budget is a short and long range plan for large scale projects
taking place at the university.
 Revenue Expenditures
Tuition and Fees Salaries and Wages
Investment Resources Undergrad financial aid
Unrestricted/Restricted gifts Graduate financial aid
Sponsored programs General expenses
Housing and Food Repairs and maintenance
Educational activities
TYPES OF BUDGETS
*Based on the Operating and Capital Budget Plan Projected for 2015 (Cornell University, 2014)
 Estimated budget for 2015 is $1.93 billion.
Major projects include
Klarman Hall
Renovation of Warren Hall
Fit out of 3 floors in the Belfer Research building
(Cornell University, n.d.)
BUDGET PROCESS, DEPARTMENTS

University Budget Office

Planning
Budget and
Division of

Institutional Research and Planning

Capital and Space Planning
Academic Planning
Business Intelligence Systems (Cornell University, 2015)
BUDGET PROCESS, SCHEDULE

October 14 Capital Plan Submissions

October 26 Provosts Capital Planning Group reviews plan

December CPG and CF&PG approval of final Capital Plan

January 26-28 Board of Trustees Meeting

March Budget Letters Distributed

April Capital Planning Opens

May 26 -27 Board of Trustees approve operating budget and capital

plan

June 19 UBO begins final budget review (Cornell University,

2015)
FACTORS THAT INFLUENCE BUDGETING

Economy Deterioration of Infrastructure Technology Federal Budget

 Within the Division of Budget and Planning,
the Institutional Research and Planning
Department compiles and analyzes data to
be used in the budgeting process.
Their methods include gathering existing data
and polling current and former students along
with parents.

The image presented represents the tuition

increase over the past 44 years. The top is the
increase in dollar amount, the lower is the %
increase over previous year. This data is
presented by the IRP.
(Cornell, 2016)

TOOLS THAT INFLUENCE BUDGETING

CRITIQUE OF THE BUDGET PROCESS

Further Investment in Academic Excellence

Currently, academic programs are reviewed every 7-
10 years.
The process consists of a self-study by the
department faculty and an evaluation by an external
view team.
Recommendation: Departments should be subject
to review every 5 years. (Cornell University, n.d.)
CRITIQUE OF THE BUDGET PROCESS

Stronger Negotiation with the Unions

Salaries, Wages and Benefits currently account for
roughly 2 billion dollars of the operating budget.
Cornell negotiates with 8 different union
organizations.
ANALYSIS OF THE CAMPUS OVERALL FINANCIAL STRATEGY
Overview
Cornell Universitys educational system is still in high demand creating financial stability
Approximately 45,000 applicants for undergraduate programs 3,342 accepted students.
Operating Revenue Grew 29% over past five years.
Operating Expenses increased 6.3% in just the past year.
Challenges
Operating margins declined.
Reinvestment return was -3.3%.
Post retirement liability increased $106 million.
CONCLUSION

Cornell Universitys financial situation is stable.

There are multiple checks and balances in place among the organizations and governing bodies of Cornells
Division of Budget and Planning.
The financial goals of the university are in line with the academic goals and mission.
There are challenges as well and opportunities on the horizon for Cornell University.
REFERENCES

Clark, K. (2010). The Great Recessions Toll on Higher Education. U.S. News. Retrieved February 5th, 2017 from:
http://www.usnews.com/education/articles/2010/09/10/the-great-recessions-toll-on-higher-education
Cornell University. (2014). Operating & Capital Budget Plan. Fiscal 2015. Retrieved February 4th, 2017 from:
https://blogs.cornell.edu/dbpsite/files/2015/07/Report_Operating_Capital_Budget_Plan_20142015-15tem5q.pdf
Cornell University. (2016). Division of Budget and Planning. Organizational Chats. Retrieved February 5th, 2017
from: http://irp.dpb.cornell.edu/university-factbook/university-organization
Cornell University. (2017). Human Resources. Bargaining Unit Staff. Retrieved February 5th, 2017 from:
https://hr.cornell.edu/hr-policies/bargaining-unit-staff
Payscale. (2016). Police Officer Salary. Retrieved February 5th 2017 from:
http://www.payscale.com/research/US/Job=Police_Officer/Salary