Still prospering from its financial stability, Yale will spend record amounts in 2001-2002 while balancing the budget for the fifth consecutive year.

The Yale Corporation approved the current budget at its June meeting, authorizing $1.4 billion in operating expenditures and an additional $324 million for capital projects. Endowment growth, low interest rates and improved fiscal management have all contributed to the University’s ability to implement new initiatives without overextending resources.

Endowment spending now makes up 27 percent, or $405 million of Yale’s revenue, up from just 12 percent a decade ago. Growth in Yale’s endowment, which is valued at over $10 billion, has enabled administrators to improve infrastructure and launch programs that would have been considered pipedreams during the University’s fiscal crisis of the early 1990s.

But even with a burgeoning endowment, rising energy costs have posed a serious problem for planners attempting to balance the budget.

Last year, Yale underestimated utility fees by over $7 million and was forced to dip into its contingency funds. Several million dollars were added to the external utility fee portion of the budget for the current fiscal year to prevent a repeat situation.

“It’s never easy to balance,” said Provost Alison Richard, Yale’s chief academic and financial officer. “Our aspirations are always larger than our means. Every year is a real struggle.”

In addition to the endowment, Yale’s revenue is derived from grants and contracts, medical services income, gifts and tuition fees.

Faculty and staff salaries and benefits represent more than half of the University’s expenses. Yale exceeded budgeted allotments for faculty recruitment and retention last year, and overall, will spend 13 percent more on faculty salaries and targeted recruitment this year.

Other major expenses include student aid, interest on debt and utilities. While rising utility costs have been a problem, low interest rates continue to lessen the impact of the University’s debt burden.

Yale’s capital budget provides for the myriad of renovation and building projects that are ongoing or planned around campus. The $324 million to be spent on infrastructure represents yet another steady spending increase as the University tackles problems left in the wake of decades of deferred maintenance.

Capital projects range from the more than $58 million being spent on renovations to Timothy Dwight College to $300,000 dedicated to repairing sculptures in Morse and Stiles colleges.