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SFU’s Finance Report: Understanding the Numbers
SFU has posted its 2022/23 Finance Annual Report with audited financial statements on the finance website. The report aims to inform and educate SFU community members about our financial status, effective resource allocation and the steps we're taking to protect the university's long-term financial well-being.
We have heard comments from SFU community members who question why we are talking about tightening our spending when there appears to be additional funds noted in the audited financial statements. The report shows approximately $22M in unspent, committed funds, also known as an accounting surplus from operations ($37M minus endowment funds of $14.8M).
An accounting surplus (a financial practice that accounts for all allocated funds in the books) is not an actual surplus (cash left over at the end of the fiscal year that can be spent without conditions).
Audited financial statements are a snapshot taken at the end of the fiscal year. It accounts for unspent funds. And in SFU’s case, the surplus funds noted on the balance sheet are set aside for committed project expenses still to be spent due to timing and delays.
To illustrate this with an example: a project costs $100K, but by the end of the fiscal year, expenses of $90K have been spent. There is $10K expenses still remaining to complete the project, which will continue into the following year. The $10K is shown as a surplus, but as it is designated for the remaining project expenses, there are no additional funds available.
It's also important to know that surplus funds can only be used once and cannot be used for annual ongoing expenses like salaries, as there needs to be a guarantee that funds required for salaries are available year to year.
Possible revenue shortfall for 2023/24
SFU shared with leaders in late November 2022 that with international enrolment softening and limited tuition increases, the university anticipated a shortfall and targeted budget reductions were made in the 2023/24 budget.
To-date, summer student enrolment is below target and if enrolment does not improve in the fall, the university could face a significant revenue shortfall and will require more fiscal restraint this year.
It’s important that we continue to focus on making smart financial decisions, reduce spending where possible, as well as explore opportunities for revenue generation.
We are also asking our university departments to collaborate and contribute to cost saving measures, as the university is required to end the fiscal year with a balanced budget.
We continue to monitor our financial situation closely. For more information about SFU’s budget process or how you can find cost-saving or revenue-generation opportunities, please contact email@example.com.