Message from the Senior Vice President
The University of Washington is a strong, vibrant and financially healthy organization. Our 48,000 undergraduate, graduate and professional students, along with 29,000 faculty and staff across three campuses and three medical centers remain more committed than ever to our missions to educate our citizens, advance cutting edge discovery and provide world-class patient care and other services to our community. Our finances, while pressured by continued reductions in our instructional funding from the state of Washington, are strong. Notable examples include our recent upgrade to a Aaa bond rating and our continued growth in research buoyed by over $327 million for projects supported by the American Recovery and Reinvestment Act (ARRA). Although our Consolidated Endowment Fund has not fully recovered from 2008, it stands at $1.8 billion as of June 30, 2010, recording a 12.5% return.
While the University’s overall financial position is strong, supported by a well-diversified funding base, we will be, for the third consecutive year, carefully and deliberately taking additional budget cuts to our instructional core. The investment from our state is a critical component to ensuring our students continue to receive the highest quality learning experience. And, it’s a good investment. For every $1 invested by the state, the UW returns $23. Activities at the UW generate more state and local tax revenue than received in state appropriation — $1.56 for every $1.00 invested. Our graduates, many from diverse backgrounds, stay in Washington at a higher rate than other states. However, affording tuition is a struggle for many students and families due to the drop in state investment. Our leadership continues to work with state and legislative officials to maintain affordable access to our University.
The University’s research volume increased to $1.3 billion in fiscal year 2010. Our faculty received more National Institutes of Health ARRA awards than any other university in the country. ARRA funding will support projects focused on prevention of infectious diseases, protection of the environment and training in high demand areas of study, such as mathematics and science. This funding has resulted in more than 2,000 jobs for the state of Washington.
During 2010, Northwest Hospital, a full-service 281-bed medical facility in northwest Seattle, joined UW Medicine. Expansion and consolidation is a common phenomenon across the industry, where stand-alone hospitals are joining larger systems to better manage the pipeline of primary, secondary, tertiary and quaternary care. UW Medicine is no exception to this evolution and is actively taking steps to build clinical programs and achieve administrative savings as a result of this affiliation. One such initiative allows Northwest Hospital’s employed physicians to be covered under the UW’s self-insurance program, which is expected to result in over $1.5 million in annual premium savings.
Sustainable Academic Business Plan
With the ongoing fiscal pressures to our academic enterprise, we continue to streamline our support operations to incorporate best practices and innovative approaches in effectively managing our resources. As part of an initiative launched by Interim President Phyllis Wise, Interim Provost Mary Lidstrom and I announced an institution-wide effort designed to target improvements in all aspects of our administration at the UW. The objective of this effort, the Organizational Effectiveness Initiative (OEI), is that administrative units provide efficient, flexible, and sustainable services. Examples of projects supporting the OEI initiative include:
- Establishing a shared administrative service
unit in the College of Arts & Sciences Humanities Division;
- Rethinking post-award grants management using LEAN analysis;
- Completing feasibility and needs assessments for administrative system replacements.
The financial accountability for these important initiatives, as well as the University’s ongoing work is detailed in our 2010 financial statements. Once again, I am pleased with the unqualified opinion from our independent auditor. The Annual Report also includes Management’s Discussion and Analysis which describes the University’s financial strength, our policies and procedures, and overall commitment to sustaining excellence now and into the future. I believe that we are as well positioned as possible to address these difficult times and to thrive in the future.
SENIOR VICE PRESIDENT