Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Institutional Reserves topic
No spam. Unsubscribe anytime.
Lawmakers press campuses on $227M in reserves; institutions say funds are tuition-derived and often designated
Summary
Committee members probed how campuses use designated and undesignated reserves, asking for school-by-school lists of reserve taps and explanations of spending and replenishment; system finance staff and university speakers said most reserves are tuition-funded and used for planned one-time needs, debt covenants and deferred maintenance matches.
Jamie Wilkie, director of finance for the University System office, briefed members on reserve policy under State Board Higher Education policy 810.1. He said the policy distinguishes undesignated reserves (a 5–7% target of prior-year general funds and net tuition) from designated reserves, which institutions must document and assign a purpose to when balances exceed the undesignated threshold.
Committee members pressed Jamie and campus finance officers on transparency and accountability: Representative Swiatek asked whether the board reviews an institution’s designated-reserve spending and how the return on investment for those expenditures is evaluated; Jamie said the policy vests discretion with campus presidents and the board does not perform routine ROI follow-ups today. Members requested a school-by-school schedule showing whether and how much each campus has accessed reserves in recent years.
Campus speakers explained typical uses. A Bismarck State College representative said designated reserves are often planned reductions for one-time projects (marketing, technology replacement) and that tapping reserves is a budgeted decision. Bruce (NDSU finance) described undesignated reserves kept for cash flow and payroll contingencies, and said $33 million of NDSU’s designated reserves were carved out for deferred-maintenance matching requirements. Rebecca (Bismarck State College finance) reiterated that non-state funds such as foundations are separate from appropriated reserve balances.
Committee members also connected reserve balances to possible tuition effects: if reserves are spent and later replenished, campus leaders said that tuition increases can be part of how institutions restore balances because many campuses are partially tuition-funded (one campus estimated a 65% tuition share of compensation costs). Members asked for clarification of which reserve dollars are state-appropriated versus tuition-derived and for data on frequency and amounts of reserve draws.
What members asked staff to provide: a list of institutions that have accessed appropriated reserves in the last biennium, the amounts and stated purposes, and a reconciliation of designated reserve items that appear in institution budgets alongside appropriation requests.
Ending: Jamie and campus finance officers agreed to produce the requested breakout for committee review.
