University Business - September 2009 - (Page 15)

Match stimulus funding with your vision of the future Kevin Hegarty, chief financial officer and chief information officer at the University of Texas, Austin, offers insight into how colleges and universities should use money available to them from the American Recovery and Reinvestment Act. What’s important to understand about the allocation What are the key takeaways regarding ARRA and process for stimulus funding? higher ed? Leaders at colleges and universities have to understand the First, that it is going to be a purely political process benature of the financial challenge at their schools. Are you cause it’s going to be set by each individual state legisladealing with something of a temporary nature, meaning ture. And it’s not clear that every state legislature is necesrevenues have declined and expenses have not declined sarily going to favor higher education. On the grant side, understand that there is money at the same rate, but when the economy recovers you’ll be back “I think the natural thing is to available for science and research, where you were before the reces- spend it on the capital side, for from the National Institutes of Health, from the Department of sion? That’s one view. We have a different view, which is that there infrastructure and technology.” Energy, and elsewhere. If you are in the business of doing research has been a fundamental reset within higher education, and that things won’t go back to and winning grants, you’ve got a natural advantage. In adthe way they were. Schools will need to resize themselves dition, some of the package went to student programs, so understand what’s happening with Pell, with work-study, to match an ongoing reduced level of revenue. and with some specialized funding to bring classrooms up -to-date. How does that analysis relate to the federal stimulus package? Stimulus monies are one-time monies. So if you believe you’ve got a one-time aberration in revenue, the cumulative difference might be gapped with some of this stimulus money for operations. If you believe in the fundamental reset model, then while stimulus monies can help lengthen the time that you have to take more permanent action, it doesn’t diminish the need for permanent action. What’s the risk of being wrong in your analysis? The challenge is that if your revenue picture does not return to pre-recession levels, and you’ve pegged stimulus funding into recurring expenses such as hiring that additional faculty member or even paying a modest salary increase, then you may find yourself very surprised when stimulus funding is no longer available. As a one-time resource, what are some appropriate uses for stimulus money? I think the natural thing is to spend it on the capital side, for infrastructure and technology. For example, our main data center is in a building that was built in the 1940s, and it certainly is not appropriate to house a modern data center. We made the decision that we had to find the monies to replace our data center, and we very much hope and think that part of our solution lies in some of this stimulus money. Putting the Stimulus Package to Work for You For additional insights into the federal stimulus package by Kevin Hegarty and other experts, please view our archived web seminar. To register, visit www.universitybusiness.com/stimulus. GovConneCtion | 3 http://www.universitybusiness.com/stimulus

Table of Contents for the Digital Edition of University Business - September 2009

University Business - September 2009
Table of Contents
Editor's Note
College Index
Company Index
Advisory Board
Behind the News
Viewpoint
Money Matters
Human Resources
Data Lockdown?
Getting Press
Multicampus Planning: Behing the Scenes
Radial Reformer
Community Colleges
End Note

University Business - September 2009