OfficeFinancialPlanning&Analysis

In an effort to increase fiscal transparency, Yale published this year the longest and most comprehensive annual budgetary plan in University history.

The 93-page document — which delves into significantly greater detail than last year’s 28-page plan — comes in the wake of a Faculty of Arts and Sciences Senate report approved last December criticizing the University for failing to make financial information beyond what is required by law or accounting practice publically available. In the report, the Faculty of Arts and Sciences Budget Committee proposed three short-term goals for the University to increase budgetary transparency, two of which have been partially implemented in the new plan. While last year’s budget plan contained the financial data of academic and support units such as the Faculty of Arts and Sciences and administrative units, this year, each subcategory in the units — for example, the Peabody Museum or the position of vice president for communications – is broken down in its own graphic with statistics going back to 2015.

“In terms of budgetary information, Yale has moved from virtually zero to a report with a substantial amount of useful data,” said William Nordhaus ’63 GRD ’73, an economics professor who chairs the budget committee. “The administration is to be applauded for taking this major step forward.”

Still, Vice President for Finance Stephen Murphy ’87 said the revamped budget book is “not a response” to the Senate report, adding that the University had been working on the plan before the report was released. Murphy added that Yale’s intention was to better engage with faculty, staff and students in conversations about collective budgetary choices.

“The main reason is we think it’s good to have more people at Yale understand the budget,” University Provost Benjamin Polak said. “It makes the decisions better. It’s not a complicated political thing.”

Murphy said the new budget plan is “roughly comparable” in terms of transparency to that of Stanford University — which was used as a point of reference in the Faculty of Arts and Sciences Senate’s report. But Murphy noted that while Stanford’s budgetary plans are available to the public, Yale’s budget books can only be accessed by Yale personnel.

Over the past five years, Murphy added, Yale has gradually become more fiscally transparent, and now rivals its more transparent “sister schools.”

According to the budget book, Yale plans to spend $4,628 million on salaries, employee benefits and other expenses from July 1, 2017 to June 30, 2018. The projected spending before counting internal revenue is consistent with a roughly $200 million increase in external expenses every year since 2015. The projected external revenue is $3,756 million, a third of which will come from the University’s endowment, while about a fourth will be drawn from medical services income.

Murphy said the process of producing any budget plan includes continuous conversations over a year with the deans and managers of all 48 academic and support units. According to Murphy, in the fall, talks generally center around a five-year plan while in the spring the focus is on the next fiscal year. Throughout the year, units undergo stress tests during which they are asked to prepare plans to address hypothetical scenarios, such as a crash in the endowment or a drop in the National Institute of Health’s funding for medical schools, Murphy said.

Yale has an endowment of $27.2 billion as of June 30.

Jingyi Cui | jingyi.cui@yale.edu

Correction, Oct 20: A previous version of this article incorrectly stated that Yale plans to spend $4.628 million on salaries, employee benefits and other expenses from July 1, 2017 to June 30, 2018, and that the projected external revenue is $3.756 million, a third of which will come from the University’s endowment, while about a fourth will be drawn from medical services income. In fact, the numbers should be $4,628 million and $3,756 million, respectively.