Freeing up the block grant

When the University of Wyoming Board of Trustees consolidated about 80 percent of all cash reserves held across campus into centralized accounts in June, it found itself at odds with faculty, staff and administrators alike.

Now, the board is returning some of those funds to their original divisions and departments and aiming to use donations, gifts, sales and other income — wherever possible — before resorting to the university’s state block grant.

Some reserves — such as a roughly $500,000 pool originally swept from the student government organization, ASUW — have already been returned.

During a discussion about these reserves with the board’s biennium budget committee on Wednesday, UW President Laurie Nichols said it was important to make sure ASUW funding, which is supported by a mandatory fee paid by all students, is out on campus working for the students, rather than sitting in a centralized reserve account.

“I just think students pay that fee for a reason and we need to deploy it (for) whatever students want to do with it,” she said.

ASUW was not the only campus entity that felt its funds were swept inappropriately. In the lead up to the original June decision to consolidate most department-level reserves into centralized accounts, the administration urged caution and faculty members expressed concerns about the ability to acquire research funding — concerns that still persist today.

UW Internal Auditor Kathleen Miller said some funds previously held at the department or division level were raised by outside sources and dedicated for specific uses.

“Those monies did not ever belong to the university,” Miller said. “These are not university funds. They are funds that are collected from individuals.”

One example was a $5,700 pool of money used by UW Staff Senate for employee recognition activities. Those funds are raised through raffles, auctions and other activities and restricted in what they could go to support, but the $5,700 was swept into centralized reserves.

“My understanding is the funding we lost in the sweep will now be returned into that account,” Staff Senate President Rachel Stevens said.

The committee endorsed — and the full board later that day approved — a return of those funds to an endowment set up by Staff Senate, solely for use by that body.

Returning certain reserves to their original homes might help UW free up their state appropriations for other projects.

“Our new financial system helps to get at that issue of making sure that if dollars are generated for a certain activity … that those dollars are spent first on that activity, before we get into spending state block grant dollars,” said David Jewell, UW’s associate vice president for budgeting and fiscal planning.

Nichols echoed the importance of freeing up the block grant.

“We really need to get to the bottom of this and figure out how we pull these funds in and use them for what they’re really intended to be used for, so we don’t have to put so much pressure on the block grant,” she said.

But Nichols added doing so in a timely manner — before the final vote on her $407 million proposed fiscal year 2019 budget in June — was important. She said many expenses — for example, cleaning band uniforms — would need to happen regardless of the funding source.

“I really fear that … if we don’t try to move some of these funds back and get them active in the (fiscal year) ’19 budget, we’re just going to substitute this money with state block grant because the equipment is going to need to be maintained,” Nichols said.

Trustee Committee Chair John McKinley tasked Nichols and Jewell with identifying more reserves that need to be returned.

“I want to make sure there’s a thoughtful process on where these land and how they are employed,” McKinley said. “We want to give you some time to get to the bottom of it, deploy this — and also it allows you to redeploy some of the block grant if it’s appropriate to other places.”

However, there will still be opportunities to return reserves after approval of the fiscal year 2019 budget, McKinley said.

“I would also encourage that — or remind people that — to the extent we may need a budget amendment after the budget, we can do that, too,” he said. “I’d like to avoid that if possible. But this allows us to get these funds where they should be, get them deployed and it frees up other public funds at the university.”

Trustee Kermit Brown said he wanted to return restricted funds to the projects they are intended for, but would still like to still have some control over money associated with the university.

“If we move them out and just let them go outside of the university, then there’s no longer any auditing or any discipline over those funds,” he said. “But if there’s a big scandal and a bunch of that money gets stolen, we’re going to get painted with that paintbrush.”

Miller said UW can identify those funds as separate from the university.

“Those would be removed from our financial statements, but we would still be able to hold them at the university,” she said.

Citing the urgency of some particular accounts, the board voted Wednesday to return about $115,000 to the School of Energy Resources and about $30,000 to the Division of Research and Economic Development, in addition to the Staff Senate funds.

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