The University of Wisconsin Board of Regents hope to avoid future conflict with lawmakers over the UW’s cash balance. It became a big issue earlier this year, when UW officials were called on the carpet to explain a $648 million surplus, accumulated mostly through tuition increases.
UW System spokesman David Giroux said the Regents, meeting Friday in Madison, discussed what the cash balance and reserve policy ought to be going forward. “What we proposed was a window – that is, the campuses should hold at least ten percent of the prior year’s expenditures in reserve – the true rainy day fund,” he said.
Anything above fifteen percent of the previous year’s expenses would require that each campus chancellor submit a spending plan. Giroux said some regents expressed concern. “They were concerned that the fifteen percent number is actually too low – that we should set a higher threshold for reporting. Others expressed a concern that legislators will perceive the fifteen percent as a hard-and-fast cap, and that any amount over that, regardless of how it’s justified, will be seen as a mistake.”
Some regents said a twenty percent threshold for reporting and explaining cash balances would allow campuses have enough cash for unexpected expenses or funding shortfalls. The policy, required by the new state budget, won’t be approved until next month’s regents meeting.
As of the end of the fiscal year in June, total UW System reserves stood at about $949 million, with some $551.5 million of that in surplus tuition.