ConEd Losses and Faculty Contracts Jim Clark 23 January 1996 In the near future faculty will be asked to accept a contract that contains 10 days loss of pay. As faculty workloads are not reduced in a corresponding manner, unlike other employees at UofW, it is appropriate that we look closely at how Academic grants and tuition money is spent by Senior Administration. University spending is also relevant to the current search for a new Academic VP. The Academic VP will have a major role in budgetary decisions at UofW and we should ensure that the selected person has the academic values and business sense to make pedagogically and fiscally sound decisions. Continuing Education One area (of several) that warrants special attention is Continuing Education (ConEd). ConEd is not funded by grants from the Provincial Government and therefore should finance itself, unlike academic departments for which the government provides grants over and above tuition. Detailed budget information about ConEd can be obtained from two public sources (at least up to recent times): Annual Financial Statements available from the VP-Administration or Controllers Offices (these are much less detailed as of 1995 than in previous years) and end-of-year Financial Reports for 31 March of each year available in the library from the minutes of the Board of Regents (I could not locate the 1995 Reports in the Library). I may post something separately about the apparent increase in secrecy about UofW budgets. From these sources and data provided by Graham Lane, VP Administration, I have gathered the following information on the substantial losses of Continuing Education over the past six years. I would appreciate any errors being brought to my attention. I should also note that I am acting entirely on my own as a concerned faculty member and do not represent any organization (e.g., I do not speak for UofW nor for UWFA). This information can also be accessed from my homepage (http://www.uwinnipeg.ca/~clark). Note that ConEd employees should not be faulted for the losses reported below. Even very conscientious and able people may be unable to salvage a fundamentally flawed decision. Statistics on reported Revenues and Expenses for ConEd appear below for the past six years, along with some comparative information. All dollar figures are in thousands of dollars. The question marks for 1989-90 indicate some uncertainty about those specific figures. Figures for 1994-1995 could not be found in the usual historical sources, and were provided by Graham Lane. Year Revenue Expense Rev-Exp Loss/Rev Cumulative Loss Loss 1989-1990 $1200.2? $1448.5? $-248.3 .21 $- 248.3 1990-1991 $1258.8 $1487.3 $-228.5 .18 $- 476.8 1991-1992 $1259.1 $1506.3 $-247.2 .20 $- 724.0 1992-1993 $1163.0 $1513.3 $-350.3 .30 $-1074.3 1993-1994 $1300.4 $1735.2 $-434.8 .33 $-1509.1 1994-1995 $1363.0 $1843.4 $-480.4 .35 $-1989.5 1995/1990 1.14 1.28 1.94 To illustrate with the last year of data (1994-1995), ConEd's revenues were $1,363,000 and expenses were $1,843,400, for a net loss of $-480,400. The net loss was .35 of revenues, indicating that expenses exceeded revenues by 35%. The lowest loss during the period examined was still $228,500. The cumulative loss column shows that ConEd lost $1,989,500 over this six-year period. To put the annual _loss_ in context, $400,000 is approximately equal to the entire non-benefit budgets of such moderate-sized departments as Economics or French. It is also just under the amount by which the Faculty of Arts and Science has been asked to reduce its budget. It appears to represent approximately 4-6 days work without pay for all Arts & Science faculty. I have not worked out what it represents in terms of a tuition increase for Arts & Science students. Moreover, the situation appears to have gotten worse in recent years, suggesting that any hope of making ConEd a money- making operation is misguided. The Loss/Revenue ratio indicates that losses were approximately 20% of revenues for the first three years, but then jumped to 30% and higher for the last three years. This worsening situation is also demonstrated by the final row, which compares 1995 figures to 1990 figures. ConEd's revenues increased by 14%, whereas expenses increased by 28%. The overall effect of these changes was to almost double the loss from 1989-90 to 1994-95 (94%). In addition to the apparent increase in difficulty getting specific information about ConEd, faithful data may be even more difficult to determine in the future now that the Senior Administration, contrary to the wishes of Senate, has provided ConEd employees, including the Dean, new positions in the Center for Learning Technologies. One consequence of doing this is to reduce ConEd's expenses without any savings actually being made by the University. Although this report just considers the large financial losses of ConEd, there may also be principled questions whether universities, subsidized by public funds and by student tuitions, should be competing with private business in for-profit training. UofW should definitely be offering our credit courses as widely as possible, but that does not require ConEd or at worst could function with a much reduced ConEd operation. Although there may be non-financial benefits to ConEd that I do not appreciate, such benefits need to be articulated and costed against annual losses of $400,000 or better. I find it difficult to imagine what benefits could warrant such substantial costs. Indeed, an equally likely scenario is that ConEd competes with academic programs for the same students, thus reducing Arts & Science enrollments in addition to diverting badly needed academic money for supposedly entrepreneurial activities.