Though WSU may still meet its budget, the benefits budget overrun leaves less room for error, both Branson and board finance committee chairman Sean Fitzpatrick said. If it were not for the unexpected benefits costs, WSU may have been able to add close to $12 million to reserves this year instead of just hitting its goal of $6 million, Branson said.
The school went over budget on health benefits because there were more large health insurance claims this year than usual, administrators said. Both Branson and Fitzpatrick said the large claims may be from people who had major medical problems this year or are about to retire or leave the university.
“As people transition out of the university, they lose their medical insurance,” Fitzpatrick said. “They need to have something done, so they have it done.”
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The unexpected benefits costs are just the latest roadblock Wright State has faced in trying to stay within its budget.
Earlier this year, WSU administrators said they would need to carve out millions more from its 2018 fiscal year budget because of a nearly $6 million decrease in tuition and fee revenue and unexpected scholarship and fellowship costs of more than $1.5 million.
While they’re unwelcome surprises given Wright State’s financial problems, they are not catastrophic ones. Unexpected costs are in some ways, actually anticipated, both Branson and Fitzpatrick said.
To make up the losses, the WSU administration has largely relied on letting empty jobs go unfilled. So far, Wright State has left around 200 positions vacant, which has saved the school almost $5 million to date, according to a budget report.
Despite going over the benefits budget by $6 million, the university’s longer-term financial health is thought to have improved.
Last month, WSU leaders said the school is on track to avoid fiscal watch. But, because of low reserves and little room for error, Wright State’s financial position remains tenuous.
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With just four months left to go in the fiscal year, the ability to stay on budget will be largely based on how well university leaders can track data and spending, which board chairman Doug Fecher said has come a long way in the last year or so. The university’s ability to now catch budget issues before they balloon serves as a major step forward, he said.
“We’re not where we need to be financially. That’s for sure,” Fecher said. “We’re not where we need to be, but it is a completely stronger position than we were in last year, even though we don’t have the reserves we need and we’re not out of the woods.”
By the numbers
$6 million: Employee benefits budget overrun.
$5.9 million: Tuition and fee decrease this year.
$1.5 million: Unexpected scholarship costs.
$30.8 million: Amount trustees slashed from WSU budget in June.
The Story So Far
• Previously: Trustees cut more than $30.8 million from Wright State's budget in June. But tuition revenue was down and unbudgeted expenses popped up.
• What's New: Employee health benefits are $6 million over budget. It marks at least the third time this year an unexpected cost developed or revenue didn't pan out.
• What's Next: With four months left before the close of fiscal year 2018, WSU will closely watch expenses since the majority of its revenue has already come in for the year.