ANALYSIS OF ACADIA UNIVERSITY FINANCES, 1988 TO 2001

The following analysis is based on the annual audited Financial Reports of Acadia University from 1988 to 2000 and the unaudited 2001 report. The analysis is based on data from Tables titled Operating Fund, Statement of Revenue and Expenditure and Operating Fund, Schedule of Expenditure by Object from 1988 to 1996 inclusive and Schedule A (Schedule of operations by fund) and Schedule B (Statement of Expenses by Function – Operating and Ancillary) from 1997 to 2001.

In 1997-98 a new format for reporting the finances was adopted. This means that some direct comparisons cannot be made between the period up to and including 1997, and from 1998.

Total expenses are Operating minus ancillaries (also not included are Special Reserves, Research, Endowment and Capital Expenses).

Data on Faculty numbers and mean salary are from CAUT. The Department of Biology budgets were obtained from that Department. Figures on enrolment are from the Registrar.

Total Expenses

In 1988 the total operating expense was $26,401,066. In 2001 this had jumped to $46,750,000 (rounded off), representing an increase by 1.77 (77%).

The inflation rate between 1988 and 2001 according to the Bank of Canada was 37.44% (http://www.bankofcanada.ca/en/inflation_calc.htm). Therefore, if the increase in total expenses simply reflects inflation, total expenses in 2001 should have been $36,285,625 ($26,401,066 x 1.3744), $9,884,559 less than the actual total for 2001. Thus, the total expense of Acadia University has increased at a substantially higher rate than the inflation rate.

Revenue

The major sources of revenue for the University are Student fees and Government grants. Student fees have clearly seen the most dramatic increase, rising from $6,599,336 in 1988 to $24,716,000 in 2001, an increase of 3.74. Government grants increased from 1988 to 1994 ($18,514,020 to $22,471,639), then decreased to 1998 ($17,887,000), and increased by 2001 ($20,721,000), for an increase from 1988 to 2001 of 1.12.

Full Time students

The number of full time students has fluctuated between 3317 and 3686 between 1989 and 2000. The number of students was level between 1992 and 1996 when numbers dropped but then recovered again.

Expenses

Expenses are broadly divided among the following items: 1988 to 1997 - Academic, Plant Maintenance, Administration, Library, Student Services, Scholarships, Interest and Sinking Fund Charges, and Deferred Maintenance; 1998 to 2001 – Academic, Plant Maintenance, Administration, Library, Student Services, and Other.

Academic expenses are by far the greatest of all items and have gone from 60.5% in 1988 to 63.8% in 2001 of total operating expenditures. Plant Maintenance has gone from 12.9% to 9.5%, Administration was at 9% between 1988 and 1994 and between 1997 and 2000; in 1995, 1996 and 2001 it was at 10%. Student services has gone from 4.5% to 5.6% and the Library has dropped from 6.6% to 4.8% of total operating expenses.

A breakdown of the Academic expenses shows the following development. Academic Salaries (wages for the delivery of courses including part-timers and the Deans) has gone from $11,261,131 in 1988 to $15,192,000 in 2001, representing a change from 42.7% to 32.5% of total operating expenses or 70.5% to 50.9% of academic expenses. However, faculty numbers have changed and there has been a change in the proportion of faculty in the various professorial ranks.

According to CAUT, in 1993 there were 177 academic positions, Lecturer and above, without administrative duties and 210 with administrative duties. In 2000 the respective numbers were 159 and 186, a drop of 0.89 and 0.90 respectively. If we adjust Academic wages using the numbers including individuals with administrative duties, the wage per capita was $70,622 in 1993 and $79,569 in 2000, an increase of 1.13. Academic wages at Acadia changed from $14,831,000 in 1993 to $14,800,000 in 2000, a slight drop. Thus per capita wages did increase despite a slight drop in total wages. However, the inflation rate between 1993 and 2000 was 1.11, such that a per capita wage of $70,622 in 1993 would be $78,595 ($70,622 x 1.11) in 2000, representing only $1000 less than the actual per capita wage of $79,569, an increase of 1.2%. The increase in total expenses by the University over that period was 11% when adjusted for inflation. Thus the university is saving a substantial amount of dollars.

Total Faculty and proportion among ranks between 1993 and 2000 (Source: CAUT)
	Acadia Faculty without Administrative duties
	Year	Total	Full	Assoc.	Assis.	Lect.
	1993	177	0.32	0.37	0.22	0.08
	1994	180	0.30	0.37	0.23	0.10
	1995	174	0.33	0.36	0.22	0.09
	1996	174	0.31	0.34	0.26	0.09
	1997	168	0.30	0.30	0.32	0.07
	1998	168	0.34	0.29	0.30	0.07
	1999	162	0.31	0.31	0.30	0.07
	2000	159	0.26	0.30	0.36	0.08
	Acadia Faculty with Administrative duties
	Year	Total	Full	Assoc.	Assis.	Lect.
	1993	210	0.36	0.37	0.20	0.07
	1994	213	0.35	0.37	0.20	0.08
	1995	204	0.37	0.35	0.21	0.07
	1996	210	0.36	0.34	0.23	0.07
	1997	195	0.35	0.32	0.26	0.06
	1998	192	0.39	0.28	0.28	0.05
	1999	189	0.37	0.30	0.27	0.06
	2000	186	0.32	0.29	0.32	0.06

There is one other factor complicating the analysis. The proportion of total faculty in the four Professorial categories has changed from 1993 to 2000 (see Table above). If in 2000 the proportion of faculty in the four Professorial categories were the same as in 1993, total wages should have been higher by 1.035. Thus, adjusted wages should have been $15,318,000 instead of $14,800,000, or 35.5 instead of 34.3 % of total operating expenses. Thus, the decrease in wages is not a function of change in the distribution within professorial categories.

What accounts for the increase in Academic expenses? Here the analysis becomes difficult because of the change in accounting practices between 1997 and 1998. If we look just at the data from 1998 to 2001, Academic wages dropped from 70.5% to 50.9% of Academic expenses. A line item called Supplies and Materials increased during this time from 12.3% to 24.1% of Academic expenses; most other line items stayed more or less constant. What are Supplies and Materials? This might relate to Department budgets.

However, an analysis of the budget in Biology shows that there has been a minimal increase in the Department Budget of 5.6% between 1993, and 2000. In 2001 the budget appears to have dropped. On a per student basis the budget has dropped by 13% between 2000 and 2001. In fact, the budget has not changed over the last 6 years. Changes reflect over- or under-spending in one year with a carry over to the next.

Department of Biology
Year	$	Majors	Hon	Total	Per Cap. $
1993	151,109	369	35	404	374
1994	154,109	364	36	400	385
1995	152,077	327	33	360	422
1996	156,105	276	31	307	508
1997	154,109	268	22	290	531
1998	154,109	247	31	278	554
1999	158,358	258	22	280	566
2000	159,613	270	23	293	545
2001	158,357	317	18	335	473

Academic expenses appear to have increased most since 1998. This is the time of Acadia Advantage. It seems reasonable to conclude that the increase is probably due to AA. (I obtained a figure of $5,021,902 for the Acadia Advantage IBM lease, $584,558 for salaries for User Support, and $649,968 for AITT salaries funded by Government Grants).

Summary

The annual expenses of Acadia University during the period 1988 to 2001 have increased dramatically. Students now carry the largest burden of this expense. Academic expenses have increased from about 60.5% to 63.8% of total operating expenses. However, money spent on academic salaries has decreased from 42.7% to 32.5% of total operating expenses; this is a result of there being fewer faculty. A change in priorities from spending money on professors to spending money on other academic aspects seems to have taken place. The increase in Academic spending is in Materials and Supplies. This does not seem to relate to Department or School budgets. It is in all likelihood tied to the Acadia Advantage.

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