January 10, 2018
Topic: Campus News
The University of Michigan's 200-year legacy has delivered "amazing achievements" for the communities the university serves, and the many strengths of the world-class university will allow U-M to provide even more impact in the century ahead.
That is the assessment of President Mark Schlissel, who discusses the university's position in the higher education community as part of the fiscal year 2017 annual report, made available this week in a digital format.
"I believe our future success will be defined in part by our ability to contribute to the solution of society's most daunting problems, bringing to bear the full intellectual might of our academic breadth and depth," Schlissel says.
"Initiatives and new endeavors we have launched in recent years are helping to unleash faculty creativity in innovative ways. Collaborations are driving work in Poverty Solutions, our Humanities Collaboratory, our entrepreneurship programs, our work in Detroit and many others.
"More than any other university, we have the potential to be so much more than the sum of our many excellent parts. It's this potential to have a positive impact on the society we serve that represents our greatest value as a university."
The report has six main components: messages from campus leaders, highlights of the year, the university's bicentennial, awards and honors, major projects and financial statements. Among the many individual items in the report are these:
• The university established a new school — the School for Environment and Sustainability — that builds on the strength of the former School of Natural Resources and the Environment to engage faculty from across the university.
• In celebration of the university's bicentennial, a special honor was established in FY '17: the Bicentennial Alumni Awards. Its intent was to highlight the diversity and excellence of recent alumni, while acknowledging U-M's past contributions and heralding its future achievements and impact. Twenty award winners were recognized publicly during the 2017 spring and winter commencement ceremonies.
• A new research effort, called the Exercise & Sport Science Initiative, is focused on optimizing physical performance and health for athletes of all ages and abilities. It will build on the work of more than 100 faculty and student researchers representing such diverse disciplines as kinesiology, medicine, bioengineering, psychology, nutrition, social sciences and data science.
• UM-Dearborn launched a Talent Gateway to help students reflect on their daily activities and explore how they can apply those experiences to other parts of their lives.
• UM-Flint established a School of Nursing to enhance the Flint campus' ability to keep pace with the rapid changes in science, technology, health care and education.
In his message, Vice President for Development Jerry May reports that more than 130,000 donors gave a record-breaking $467 million in cash gifts and pledge payments during FY '17. He said there were significant increases over the previous year in individual, foundation and estate gifts.
"These resources already are making an impact on the university community through scholarships, innovative programs, research, facility upgrades and more."
Kevin Hegarty, executive vice president and chief financial officer, says the consistent and unyielding commitment of faculty and staff through the decades has allowed the university to prosper in many ways, including its financial health.
"It is a pleasure to once again report that the University of Michigan remains financially healthy and well positioned for the coming years," Hegarty says. "The university's focused and disciplined budget approach balances our need to compete for outstanding students and talent against a challenging economic environment where financial efficiencies must be achieved."
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 $13.4 billion at the close of FY '17, up from a restated net position of $12.2 billion at the close of FY '16. This restatement reflects the impact of the university's affiliation with west Michigan's Metropolitan Health Corp. and the adoption of Governmental Accounting Standards Board Statement No. 75 regarding accounting and financial reporting for post-employment benefits other than pensions.
Among the financial highlights in the report are these:
• The university again earned the highest credit ratings available from Standard & Poor's (AAA) and Moody's Investor Services (Aaa), which are a strong indication of the institution's financial health.
• The university's research enterprise tallied a record year of $1.5 billion in research expenditures, with a significant portion resulting from federal research funding.
• The University of Michigan Hospitals continued its strong financial performance during the year, with an operating margin of 7.9 percent ($255.3 million) on operating revenues of $3.2 billion.
• The university completed its affiliation with Metropolitan Health Corp., a community health care provider in west Michigan, resulting in an $80 million increase in net position at the beginning of the fiscal year.
• The university adopted new accounting guidance related to the manner in which it accounts for post-employment benefits other than pensions, resulting in a $930 million decrease in net position at the beginning of the fiscal year.
• The university's investment portfolio earned net investment income of $1.4 billion.
• The value of the university's endowment totaled $10.9 billion at June 30, 2017, reflecting strong investment performance and new endowment gifts offset by endowment distributions, which totaled $325 million.
The consolidated financial statements of the university are audited by the independent accounting firm of PricewaterhouseCoopers LLP.