Portland State utilizes a number of different fund sources in two major categories: (1) Education and General Resources; and (2) Non-Education and General Services Revenue. For fiscal year 2004, Education and General Resources funds derived from the following sources.
- 54% Tuition
- 36% State appropriations
- 10% 0ther sources
Non-Education and General Service Revenue comprises a large variety of funding sources. The three largest sources for fiscal year 2004 are listed below.
- 24% Other auxiliaries
- 21% Educational activities
- 17% Student operations
Teaching, research, and outreach programs are integral to the mission of the University and the strength of the community. As reported in the Oregon University System Annual Report for Fiscal Year 2003 (Portland State information beginning on p. 49), 31% of Portland State operating expenses went to instruction, more than 5% went to research, and 4% was committed to public service. These numbers are consistent with expenditures in Fiscal Year 2002 as well. The Annual Report data for Portland State provide a more detailed break-down of operating expenses and how they support the University's mission.
Prior to 2003, all debt was maintained centrally on OUS books. Institutions received payment schedules for one year in advance. OUS was and is responsible for any debt refund and debt payments (although institutions are required to fund debt service reserves). Overall debt service requirements for the 2001-2003 biennium are 3.3% of the OUS budget, which appears well within the range indicated by Standard & Poors for a low carrying charge.
The 2003 audited financial reports for Portland State University (contained on p. 46-47 of the OUS Annual Report) show that long-term liabilities for Portland State are $121,282, or 48%. This compares to a high of 54% and a low of 21% at other OUS institutions. Although Portland State has purchased and built several buildings over the past 6 years, many of the assets on the books are fully depreciated, and therefore the liabilities to assets may seem high. Portland State debt service as a portion of expenditures is well within the limits of Standard & Poors' low carrying charge.
Although the University has absorbed a number of budget cuts over the past few years, the institution has a history of fiscal stability and sound fiscal management. Financial statements indicate that the institution has maintained both long- and short-term liquidity, the debt ratios are within reasonable limits, and there is no budget deficit.
The University's financial stability is supported by data provided in the links below. Adoption of Governmental Accounting Standards Board 35 since fiscal year 2002 makes direct comparisons difficult for the statements before and after 2002. The audited financial statements for FY1999 through FY2002are provided below.
Portland State is subject to the accounting and budgeting policies contained in OUS Internal Management Directives (IMDs) and the Financial Accounting Manual (FASOM). These documents clearly state the policies and procedures for transfers to occur between budget accounts, and intra- or inter-fund loans. Any journal entries processed to transfer account codes are controlled by business office, dean, director or chair approval, and queues.
The University budget funds many diverse offerings. Higher levels of funding are observed in specialized, technical, and professional programs. However, with the continued decline in state appropriations, coupled with mid-biennial cuts, Portland State has been unable to totally protect budgets in instructional areas. Budget memos concerning the cuts record Portland State's attempt to protect programs and instruction by having administrative services absorb a larger share of the cuts. Continuing cuts eventually caused erosion in instructional funding.
Budget memos concerning cuts:
The Perkins Loan default rates for 2002-2003 was 8.5% and for 2003-2004 was
less than 7.38%. Sources of financial aid are reported in the table below.
As a state agency, Portland State receives appropriations through OUS. Any unspent appropriations are to be returned to the state. Portland State also collects tuition and fees, indirect costs, and other miscellaneous revenues, which allow the University to budget for reserves in its annual budgeting process. Portland State currently sets aside funds in three categories: (a) utility rate increase reserves, (b) operating reserves, and (c) institutional reserves. Many deans maintain a reserve, which results in a carry forward to their accounts at the start of each new fiscal year.
During 2003-2004, two new reserves were established to cover possible shortfalls or cuts in appropriations due to legislative mandates. One reserve was established to offset the impact of a proposed revenue bill (Measure 30) being defeated. The second reserve met a Public Employees Retirement System (PERS) retirement reserve requirement (HB2187). OUS recently approved a reserve policy for OUS institutions to promote prudent financial management.
While Portland State's educational and general operations are not dependent upon auxiliary enterprise income, some Auxiliary Services departments began contributing 10% of each expense to a reserve fund on July 1, 2003, to help fund the University's budget. The collective Auxiliary Services Operating budget is estimated to contribute $800,000 to $1,000,000 annually. A $1 million contribution only represents about 1% of total instructional expenses for the University, and would not be considered a dependency on auxiliary funding.
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