UW System Working To Reduce Reserve Funds

An annual update on the University of Wisconsin System reserves indicates overall, there’s less money on hand this year compared to last.

In some cases, reserve funds have grown — for instance, when building projects are delayed.

This is the second report on UW System fund balances since state legislators criticized UW officials in 2013 over the level of reserves at a time that tuition was rising. As a result of that controversy, lawmakers capped tuition and cut $250 million from the UW System budget.

System President Ray Cross said the UW had nearly $924 million on hand at the end of June, which is the end of the 2014-15 fiscal year, but that much of that is designated for a particular purpose.

“The actual true reserves, true reserves and undesignated, is about $145 million this year. The remainder is obligated, planned or designated,” said Cross.

The report to the Board of Regents says that amount represents 2.5 percent of the UW System’s $6 billion operating budget.

Lawmakers concern about the level of reserve funds prompted UW to set 12 percent of expenses as the maximum threshold for much money to keep in reserve. The report says eight schools came in under that amount, compared to three the year before.

Cross said any school above the 12 percent ceiling has to come up with a plan on how to reduce reserves.

“What we don’t have is a minimum there,” he said. “And there are some campuses that are precariously low, as well.”

Cross said those campuses with less than optimal reserves are the campuses in Superior, Stout, Oshkosh, Milwaukee, Madison and Eau Claire.

The UW System consists of 13 four-year universities, 13 freshman-sophomore UW Colleges campuses, and the statewide UW-Extension.

The UW System Board of Regents will discuss the financial report at a meeting Thursday in Madison.