Yale was officially in the black for the 2014 fiscal year.
In the newly released 2013-14 report from the Yale Division of Finance, the University saw a $51 million dollar surplus from operations in fiscal 2014, compared to a $39 million deficit in the previous year. The report also announced that the University’s net assets grew by $3.3 billion to a total of $25.8 billion, which was attributed to the strong 20.2 percent return on investments on Yale’s endowment in fiscal 2014. Other major contributors to the results included returns from the School of Medicine and the cost-saving activity from the University’s five-year plan to reduce administrative costs by 9 percent.
Despite the gains, Vice President for Finance and Business Operations Shauna King said new challenges lie ahead for the University.
“From a balance sheet perspective, this was another terrific year, and Yale remains a place with the resources to support its varied and important mission,” she said in the report. “We are heartened by the improved operating performance, and it represents Yale’s measured and successful response to the financial shock from the sudden and dramatic $6.5 billion decline in the value of the endowment in 2008–09.”
The report also announced that for the year ending on June 30, 2014, Yale was able to pay off $250 million in debt.
Still, King said that the encouraging results from the surplus gained in the fiscal year 2014 only represented 1.6 percent of revenues. This is a relatively small amount for a University with “large ambitions” and new ideas, she added.
“In the coming months and years, Yale will need to make many choices — both exhilarating and difficult — about how to invest its resources,” King wrote. “That is the work ahead of us.”
She added that Yale will continue to uses its resources in investing in teaching and research, while also relying upon key principles in guiding its management, including sustainable finances and transparent economics.
The positive results appear to have exceeded even the expectations Provost Benjamin Polak expressed in September. In addition, the surplus comes two years before the balanced budget predicted by University President Peter Salovey for fiscal 2016, announced in an August email to the University community.
Polak told the News last month that he believed Yale would see a balanced budget for fiscal 2014, which he said was due to higher than anticipated revenue from Yale School of Medicine’s clinical practices and the 20.2 percent return on the endowment.
According to the report, medical services income witnessed an increase of 13.6 percent from 2013, leading to a total of income of $699.5 million. This is higher than the preliminarily data published earlier this month by the News, which reported a revenue of $664,981,000 for fiscal 2014.
“We are continuously strategizing to increase our revenue,” School of Medicine Dean Robert Alpern told the News in October. “We’re always trying to get more grants, and make the clinical practice more efficient and better.”
Due to $39 million deficit in fiscal 2013, the Provost’s Office created targets aimed to reduce costs in personnel and nonpersonnel costs on a one-, three- and five-year basis.
But despite the net increase in operating activities, Polak told the News in September that announced budget targets would still likely be pursued.
The University last reported a surplus in fiscal 2012.