FY05 Building & Construction Fund

April 12, 2006

Mrs. Nancy Paul
PO Box 5318
Topeka KS 66605

Dear Mrs. Paul:

A prudent Washburn University board member would require more accountability for the expenditures made from the Washburn University Building Construction Fund. Since you won't ask the questions that should be asked as stewards of the taxpayers funds, I will. Perhaps as each board member begins to fulfill his or her fiduciary responsibilities, I won't have to pay over $40 to obtain the information from an administration that is so opposed to accountability.

Public Budget

Although in July, 2000 your legal counsel suggested that public budget forms should be filed for each and every fund maintained by the University, the administration still fails to adequately budget and disclose financial activity that occurs in the Building Construction Fund.

Public Funds

In FY05, the Building Construction Fund received $18.6 million and expenditures of $12.1 million were recorded. Public monies were the source of over 87% of these additional FY05 funds (Exhibit 1). Yet, there is very little disclosure as to the actual source of funds, and some of the disclosure is actually misleading. For example, although the Board approved the use of $2.5 million from university reserves to replace the failed fundraising effort for the new Art Building, the source of funds was actually sales tax receipts.

Deficit Spending

In addition to the new Art Building, it appears from the deficit balances reported in the FY05 Financial Report that fundraising efforts have fallen short on several other projects. Since the administration is not required to respond to queries from the public, perhaps the Board could address in a public forum the proposed resolution of the following deficits:

Project Description FY05 Ending Deficit
Law School Renovation (2004) $  24,438.83
Lee Arena Athletic Center   401,700.02
Living Learning Center   173,742.08
Moore Bowl Improvements   294,917.68
Carole Chapel   293,519.53
White Concert Hall     13,740.43
Mobile Nursing Clinic   350,000.00 (estimated)

Funding Problems

More importantly, perhaps the Board could explore why the deficits exist. Since comparison of actual to budget for sources of funds and for expenditures is not part of any regular reporting requirement, how do you know whether the deficit is due to 1) fundraising shortfalls, 2) overexpenditure of budget, or 3) unauthorized expenditures?

Slush Funds

Monies transferred for specific projects are never fully accounted for and expenditures charged to this fund receive little scrutiny. So, it is easy to slip some projects into this fund without identifying the specific source of funds. For example, although $360,000 was transferred from the general fund to the Building & Construction Fund for classroom renovation, an accounting for how these funds were actually spent has never been provided to the Board. Some of these unexpended funds for specific projects subsequently provide the source of funds for miscellaneous expenditures such as: Project Description FY05 Project Cost Student Publication Remodel $2,154 Fence - President's Residence 7,452

Responsible Budgeting

The administration should be held accountable for

  • Projects that exceed the budget by over 25%, such as the FY05 roof replacement projects for Morgan and the Memorial Union and the MO 208 remodeling project, and
  • The $49,820 renovation of Mabee 203A that was budgeted for $15,000.

Where's the Money?

The administration should also be held accountable for all interfund and intrafund transfers, including:

  • Transfer of $250,000 from Sales Tax Smoothing Fund to the FY2001-2004 ETC account,
  • Transfer of $100,000 from Washburn Terrace Apts to Memorial Student Union, and
  • Transfer of $630,000 from Mulvane Art Museum Renovation to Art Building Project.

Who's Paying for Capital Improvements?

The administration does a nice job concealing the fact that $11.8 million in FY05 operating funds and sales tax receipts were diverted to various capital projects while other operating expenses for most educational and student support areas remained static. I believe that the Washburn University faculty and students, Shawnee County taxpayers and state legislators would be outraged if they fully understood the extent that today's students (who have seen tuition increase 36% over the past four years) are paying for the capital improvements on campus. Perhaps the students and taxpayers, rather than Jerry Farley, should receive the kudos for revitalization of the Washburn University campus.

Budget Priorities

As you prepare the FY07 operating budget, more attention should be given to providing adequate funds for faculty development, classroom supplies, and student services.

Sincerely,

Mary Lou Herring