Despite the challenges posed by the COVID-19 pandemic, the University of Michigan continued to deliver on its mission of education, research and patient care, and its financial position remains strong, according to the university’s annual report for fiscal year 2020, made available this week in a digital format.
“For more than 200 years, the University of Michigan has risen to meet the greatest challenges of our world and brought our intellectual capacity and public ethos to bear on the issues that demand the attention of the leaders and best,” President Mark Schlissel wrote in a message included in the report.
“At the heart of our commitment to the public good is our mission. It grounds all of our activities and aspirations,” Schlissel wrote. “This year, it has been a beacon amid a sea of uncertainty.”
In addition to messages from university leaders, the report includes highlights of the year, awards and honors, major projects and financial statements, as well as a special section on the university’s pandemic response. Some of the many individual items in the report include:
- U-M faculty have been providing expertise in modeling and forecasting data to inform the state’s MI Safe Start Plan to reopen the economy safely and gradually in the era of COVID-19.
- UM-Dearborn began three new graduate programs in fall 2019, including a Master of Science in Cybersecurity and Information Assurance, a Master of Science in Marketing and a Master of Public Administration and Policy.
- UM-Flint plans to open a College of Innovation & Technology in 2021. This new cutting-edge academic unit will offer four-year bachelor’s degrees in technology and prepare graduates for employment in a number of industries.
- Plans for a 14-acre, state-of-the-art research and academic center in downtown Detroit were unveiled. The Detroit Center for Innovation will be dedicated to stimulating entrepreneurial activity, educating students and further diversifying the regional economy.
“Thanks in large part to the generosity of past and present donors, the University of Michigan is weathering the uncertainties of the coronavirus pandemic,” wrote Thomas Baird, vice president for development, in his message. “Our community stepped up in exceptional ways to support collaborative education, care and research that spans across multiple schools and colleges this year.”
Notable efforts driven by philanthropic support included a new U-M Center for Global Health Equity launched by a $10 million gift from Tadataka and Leslie D. Yamada, the Frankel Innovation Initiative to accelerate research and development of life-saving therapies established by a $20 million gift from Maxine and Stuart Frankel, and the Elizabeth Weiser Caswell Diabetes Institute established with a $30 million commitment from Regent Ron Weiser and Eileen Weiser.
Baird’s message also acknowledged “an outpouring of donations from the local, regional and global community” of personal protective equipment, food and cash in response to COVID-19 needs at Michigan Medicine and throughout the community.
Kevin Hegarty, executive vice president and chief financial officer, pointed to the university’s continued financial strength and its dedicated employees as critical elements that “enabled the university to navigate numerous challenges posed by the global COVID-19 pandemic.”
Some of the biggest challenges were faced by Michigan Medicine, which worked to meet the pressing health care needs in the region by expanding ICU beds, accepting transfer patients from other institutions and taking new measures to keep patients, families and employees safe.
“Through it all, we did what was necessary to ensure safe, quality care for all of our patients as we continue to manage the ongoing health care crisis,” Hegarty wrote in the report.
As the pandemic ramped up in the spring, Michigan Medicine had to cancel elective surgeries, procedures and services, and devote operations to providing care for COVID-19 patients. As a result, the U-M Health System experienced a significant drop in revenue and a $74 million operating loss — after adjusting for the receipt of federal economic relief funds — on operating revenues of $4.2 billion for the fiscal year that ended June 30.
The university’s net position, which represents the residual interest in the university’s assets and deferred outflows, after liabilities and deferred inflows are deducted, stood at $14.5 billion at the close of fiscal year 2020, a decrease of $277 million from the prior year.
The drop “reflects the impact of the pandemic’s initial stages,” Hegarty wrote.
Financial highlights in the report include:
- The university reported $1.62 billion in research expenditures, with more than half of it funded by the federal government. That total included $577 million to support research that explores the cause, diagnosis, prevention and cure of human diseases, including the novel coronavirus.
- The university increased its budget for undergraduate financial aid by 11.2 percent on the Ann Arbor campus, 11.4 percent on the Dearborn campus and 5 percent on the Flint campus.
- The value of the university’s endowment totaled $12.5 billion on June 30, 2020. The endowment provided distributions of $384 million to support university operations.
The consolidated financial statements of the university are audited by the independent accounting firm of PwC.