Reserves

Although there are many competing short-term demands in budget planning, the community must understand the university’s need to build reserves for unplanned and planned future needs and have general guidelines on how much to manage future expenditures. We need to move away from budget overruns and formalize contingency management. When and if the opportunity presents itself, we also need to be setting aside one-time-only revenues to stabilize our budget over the multi-year period. At the Board’s Audit and Finance Committee meeting in November 2021, the Financial Sustainability and Reserves were discussed and outlined that these monies will be used for planned future investments in large-scale repairs/replacements, the creation of a strategic pot for new priorities/equipment/infrastructure, and operating contingencies to offset unplanned negative external budget impacts.

The university’s current reserves position (Figure 7) (as of March 31, 2023) are outlined in Note 21 of the 2023 Annual Financial Statements. This represents operating funds set aside for specific purposes such as capital projects, research funds, academic priorities, digital infrastructure, and future student initiatives and excludes sponsored research and directed donations, which are treated as deferred contributions. Approximately 50 per cent ($13.2M) of the 2023-2024 forecasted reserves are linked to contractual obligations (e.g. faculty start-up funds). In addition, a working capital reserve of $6.0M (22.2 per cent of total reserves) has been set aside as a Ministry of Colleges and Universities requirement to stabilize the university’s financial position, leaving approximately $7.7M (28 per cent of total reserves) for discretionary projects.