Office of the Chancellor

V. Components of the Multi-Year Plan
B. Expenditures
(5) Fund Balance Improvement $ 1.0M

In order to stabilize the fund balance erosion in our budgets, at a minimum we must fund up front the out-year liabilities that accrue from salaries, vacation, sick leave, etc. A threshold of $1.0M is required by FY2001. In combination with other actions, such as investments in the Physical Plant fund for necessary capital improvements, we shall reverse the downward trend of our financial indicators. One example is given in Figure 8, which shows that one indicator, the financial cushion, will stabilize at 7.5%. (The financial cushion is the expendable fund balance as a percent of unrestricted expenditures and mandatory transfers.) National standards determine that this ratio should be 5% or greater. The median ratio for public schools is 23.9%. Given our overall circumstances, and given our recent attention to dealing with these issues, the level of 7.5% is acceptable.

David K. Scott was Chancellor of the University of Massachusetts Amherst, 1993-2001. This is an archive of the Chancellor's Web site during his tenure.
V. Components of the Multi-Year Plan B. Expenditures (5) Fund Balance Improvement $ 1.0M In order to stabilize the fund balance erosion in our budgets, at a minimum we must fund up front the out-year liabilities that accrue from salaries, vacation, sick leave, etc. A threshold of $1.0M is required by FY2001. In combination with other actions, such as investments in the Physical Plant fund for necessary capital improvements, we shall reverse the downward trend of our financial indicators. One example is given in Figure 8, which shows that one indicator, the financial cushion, will stabilize at 7.5%. (The financial cushion is the expendable fund balance as a percent of unrestricted expenditures and mandatory transfers.) National standards determine that this ratio should be 5% or greater. The median ratio for public schools is 23.9%. Given our overall circumstances, and given our recent attention to dealing with these issues, the level of 7.5% is acceptable. Table of Contents Next \| Utility Increases