An audit of the University of Wisconsin System released Nov. 15 revealed that no documented plans exist for 40.7 percent of UW-Madison’s 2012 program revenue balances.
These balances are funds held by universities that draw from sources such as tuition after expenditures are subtracted. The majority of this money is committed in some way to future uses.
The audit, conducted by the Legislative Audit Bureau, focused on $755.4 million of the $1.05 billion in the 2012 system balances. This came from sources such as tuition revenues that did not have restricted uses.
At UW-Madison, $112.4 million of the $276 million in revenue balances are undocumented, meaning either the plan for its use is unavailable or no plan currently exists.
System-wide, 18.8 percent of funds are labeled as undocumented. These funds come from academic student fees, such as tuition, and federal money used to administer research grant programs.
In a letter responding to the report, UW System President Kevin Reilly said UW-Madison had accumulated the federal funds “as a hedge against potential declines in federal research revenue” and would need to use them to compensate for the recent decline in federal funding.
Many legislators were angered by the April 2013 revelation that the UW system held over $1 billion in program revenue balances, especially because the UW System Board of Regents had voted consistently to raise tuition for years. In response, the state Legislature mandated the annual audit of program revenue balances along with sanctions including a two-year tuition freeze.
Initial analysis of 2013 balances show program revenue balances have increased by 16.3 percent, but the bureau was unable to examine how the money is committed because the report was compiled before data was available. A second phase of the report will look at 2012-’13 financial statements.
