A Tuition Fee Freeze is Possible

February 2015

Ryerson's Alternative Budget

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A Tuition Fee Freeze is PossibleRyerson’s Alternative Budget

This project, a collaboration between the Ryerson Students’ Union, the Continuing Education Students Association at Ryerson and supported by the Ryerson Faculty Association and CUPE 3904, involved the commissioning of two outside professionals Sean Geoby and Anthony Piscitelli (Bios below).

About Drafters

Sean Geobey is an economist who holds a PhD from the University of Waterloo focused on social innovation and social finance, as well as a MA in economics from Queen’s university focused on non-profit sector organizations.

Anthony Piscitelli is an Accredited Canadian Credit Union Director and an expert in governance. He has twelve years’ experience serving on non-profit and for-profit boards and a MA in Political Science from Wilfrid Laurier University.

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Table of ContentsAbout Drafters .........................................................................................................................................................................ii

Introduction ............................................................................................................................................................................. 1

Context ..................................................................................................................................................................................... 1

Governance ..............................................................................................................................................................................3

Improved Accountability and Governance ......................................................................................................................... 4

Tuition Fee Freeze Costs .......................................................................................................................................................5

Prioritizing Excellence in Education ................................................................................................................................... 6

Reduce Management Expenses ........................................................................................................................................... 8

Digital and Open Access Library Services ......................................................................................................................... 9

Prioritizing Accessibility - Give it Back ............................................................................................................................ 10

Improved Budget Governance ............................................................................................................................................12

Conclusion ............................................................................................................................................................................. 16

1

IntroductionThis is Ryerson’s time to lead. 2015 will mark Ryerson’s 22nd year as an Ontario university, and these have been a transformative two decades. While Ryerson has continued to advance its scholarly, research and creative endeavours, the university administration must remember that ac-cessibility for students and a focus on teaching has been central to the best Ryerson has to offer. The university’s culture of openness, its creativity and the energy that pervades the student population comes from the diver-sity of Ryerson’s students. Yet rising tuition costs push out the most vulnerable members of the community and rising teacher-to-student ratios threaten to undermine the excellence of the unique learning environment for which our campus is known.

It is in the spirit of innovative thinking that the Ryerson Alternative Budget includes a series of constructive recommendations to help the university better meet the goals set out in Our Time to Lead.

Recommendation 1: Freeze tuition fees

Recommendation 2: Include Ryerson Students’ Union and Continuing Education Students’ Association of Ryerson’s (CESAR) Presidents as non-voting ex-officio members of the Board of Governors

Recommendation 3: Include representatives of the Ryerson Students’ Union and CESAR on enrolment planning and departmental budgeting committees Recommendation 4: Reduce administrative expenses to the average for Ryerson’s peer universities

Recommendation 5: Reduce bloated management structure

Recommendation 6: Reduce the use of external consultants

Recommendation 7: Where possible switch from proprietary to open source software

Recommendation 8: Return future surpluses to students as tuition rebates (across the board. Not in targeted funding)

Recommendation 9: Provide greater detail in budgets and financial reporting

ContextOver the past 8 years the Ontario government has allowed tuition fees for post-secondary students to rise by up to 80%. While Ontario students pay the highest tuition fees in the country, their investment has not been coupled with increased classroom resources. Instead Ontario students face the largest classes, the worst student-teacher ratios in the country1 and an average debt load of $37,000 for those students who borrow for their four-year degrees2.

Ryerson University is known for innovation in education and, from its beginnings, a strong commitment to student accessibility. The hands-on, applied approach for which we are known has produced scores of successful graduates. Ryerson also deeply reflects the city within which it lies and the communities that city represents. Like Ryerson, Toronto is a highly multicultural centre. However, Toronto is also a city that has seen growing economic inequality for over a generation. For new Canadians, those living in poverty and people coming from marginalized communities, Ryerson has long been seen as an institution committed to their advancement.

1 http://cfsontario.ca/en/section/232 http://cfsontario.ca/en/section/207

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3 Where ever possible McMasters University’s medical program has been excluded from our calculations.4 A structural surplus or deficit occurs when an organization or government consistently over or underspends. Overtime most budget roughly balance out a structural deficit occurs when revenues consistently exceed expenses, a structural deficit occurs when expenses consistently exceed revenues.

Ryerson has always prided itself on its diversity. It has sought to make itself a home to the people from a wide variety of cultural and economic backgrounds as well as a safer space for members of LGBTQ, racialized and other marginalized identities. Critical to maintaining Ryerson’s reputation for diversity and inclusion is placing high priority on affordability. High tuition and other expenses are a real barrier preventing students from accessing or completing post-secondary education and this burden falls most heavily on students from marginalized backgrounds.

The Ryerson University administration has choices as to whether it raises tuition fees or not and how it spends the money it collects. The rhetoric that this is only a provincial issue only serves to further disempower Ryerson to make budget decisions that are in students’ best interest. Budgets are about setting priorities and these priorities reflect an organization’s true values. Yet despite the admirable commitment to accessible high-quality education stated in the university’s academic plan, Our Time to Lead, Ryerson’s spending has instead drifted towards administrative bloat and reduced financial accessibility, and accountability through opaque reporting mechanisms.

Throughout this budget we refer to a group of peer universities to which Ryerson’s budget allocations are compared. This set of peer universities includes Brock University, Carleton University, McMaster University3, University of Guelph, University of Waterloo, University of Windsor, Wilfrid Laurier University and York University. These are the “comprehensive” universities of Ontario as described by Maclean’s rankings. They are similar in size to Ryerson and offer a comparable variety of program offerings. However, Ryerson also has it’s own unique features, most notably our prior history as a polytechnic university, high costs associated with being in downtown Toronto and having 30% of our student population comprised of part-time students – by far the highest in the peer comparison group. However, there are many areas where Ryerson’s priorities seem to clash with those of its students and we can learn from the benchmarks set by best practices at other Ontario universities.

The learning environment provided by Ryerson has attracted a great deal of attention from prospective students and as a consequence the university has consistently exceeded its enrolment targets. These “unplanned” students bring higher revenues through tuition

fees and government funding. Alongside this they also increase costs as those students require additional faculty, staff and facility resources. However, the revenues from these students consistently exceed the costs associated with these students. Consequently, overly conservative enrolment estimates have contributed to an ongoing structural surplus4 that has negative consequences for transparent budgeting and the clear setting of institutional priorities and furthermore has the institution collect funds from students that it doesn’t require to carry out institutional operations.

While the Ryerson Students’ Union has requested that the administration present a budget with a zero tuition fee increase and no cuts to academic departmental budgets, the administration has failed to present a reasonable alternative to their current budget. Instead the administration couches its priorities in unrealistic revenue estimates that obfuscate the need to set their priorities in a transparent manner that puts students first. The university administration estimates that a tuition freeze will cost them $13 million next year that cannot be covered any other way; an austerity mindset that pushes greater financial burdens onto students that can undermine the tradition of inclusiveness of which Ryerson is rightly proud. If the administration at Ryerson has decided not to set priorities that advance inclusiveness and quality education then we, the students of Ryerson University, feel that it must be our time to lead.

This university’s view of innovation is that it “[encourages] its academic community to challenge the status quo with new solutions and to apply new ways of thinking that transform the world” (Our Time to Lead, p. 3). It is in this spirit that the Ryerson Alternative Budget has been developed. The analysis primarily uses Ryerson’s audited financial statements up to 2012-13, as more recent reports are not yet publically available. For additional context on Ryerson and its peer universities this report also relies on comparable information reported to the Council of Ontario Universities. This document shows that we can make different choices; setting priorities that will better meet the needs of Ryerson students while ensuring resources allocation fulfills the objectives of our university’s academic plan. The option then, is not either students’ needs are met OR institutional priorities be maintained, but rather these two priorities can be balanced following the above-mentioned recommendations within the current fiscal environment.

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Critical to re-setting spending priorities to match the needs of the university community is developing an accurate understanding of Ryerson’s financial projections. As a publicly-funded non-profit institution, Ryerson should be running structurally balanced budgets. While short-term surpluses and deficits are to be expected, as not all contingencies can possibly be accounted for in advance, these small variations should roughly balance out over the course of a few years. With a structurally balanced budget this would be the case. With a structural deficit an organization would be accumulating deficits over time, and with a structural surplus an organization would be accumulating surpluses over time. For a non-profit like Ryerson running structural surpluses or deficits would signal a persistent failure in financial planning and university governance.

When comparing Ryerson’s November Projections to its Year End Unaudited financials we find that the university has been running a structural surplus averaging $14 million per year over the past five years – almost 3% of Ryerson’s 2015-16 expected revenues. Surpluses that large could provide every Ryerson student with a rebate of over $400 each. These surpluses demonstrate a failure of the university administration to provide proper financial planning. In particular they have underestimated revenues by an average of $25.9 million since 2010. A good deal of this is a result of enrolment exceeding expectations, increasing both variable revenue and variable cost. However, revenue underestimates far exceed the cost underestimates of $11.8 million each year, creating this $14 million structural surplus. The consistency with which the university has been running these surpluses suggest that the university should revise how it models both expected revenues and costs in its financial planning.

Governance

Table 1. Difference between Consolidated Statement of Operations Year End Unaudited Numbers and November Projections presented to the Board of Governors ($ in 000s)Revenue 2010 2011 2012 2013 2014 AverageOperating Grant 19985 12662 10715 15190 17948 15300

Student Fee 6860 10442 10953 15883 15247 11877

Sales and Services (2404) (2972) (4006) 652 1111 (1523)

Donations Recognized (1981) (3273) 1215 269 (1086) (971)

Amortization of Deferred Capital Contributions

324 306 (4945) (127) 142 (860)

Investments & Other Income 1818 2121 2605 2114 1555 2042

Total Revenue 24602 19286 16537 33981 34917 25864

Expenses 2010 2011 2012 2013 2014 AverageSalaries and Benefits 8354 8522 (1789) 11758 11870 7743

Materials Supplies, Repairs and Maintenance

(8057) 2287 346 13629 (1260) 1389

Bursaries and Scholarships 1360 1788 3192 853 619 1562

Interest (155) (355) (1045) 107 90 (271)

Amortization of Capital Assets (205) 381 5398 301 1169 1408

Total Expenses 1297 12623 6102 26648 12488 11831

Revenue Less Expenses before Swap5 23305 6663 10435 7333 22429 14033

Loss/Gain Swap (1624) 15545 (4693) 899 (17500) (1475)

Revenue less expenses 21681 22208 5742 8232 20679 15508

5 At Ryerson University swaps are a tool used to convert a variable rate loan into a fixed interest rate. The swap has the effect of making interest rate expenses more predictable but it also creates an annual adjustment to the audited financial statements as the book value of the swap changes.

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Mildly conservative estimates are reasonable, but this large structural surplus removes a substantial portion of the university’s resources from transparent budgeting processes. This lack of transparency can undermine the confidence that Ryerson’s students and other stakeholders have in the administration’s commitment to the priorities outlined in Our Time to Lead. We include more realistic estimates of revenue and cost to reduce this structural surplus in this alternative budget.

Public education is a contract between an institution and the citizens and maintaining this trust includes ensuring that public money is properly spent. This includes an expectation of running structurally balanced budgets that devote resources towards the teaching, research and creative excellence that the public expects. To do otherwise risks undermining the confidence a university’s diverse stakeholders have in its commitment to providing public education.

The presence of a swap on the book serves the purpose of managing interest rate risk by, essentially, converting two floating interest rate loans into a fixed rate. However, the swap also complicates the audited financial statements as changes in the fair value of the swaps are recorded

as unrealized gains or losses on the Consolidated Statement of Operations. This complication should not be used to hide the surplus that is being generated by underestimating revenue. It is important to note that if a surplus is examined in the audited financial statements over the last five years before the swaps are accounted for it averages $12.8 million and after the swaps it is $8.7 million. While the presence of swaps is impacting the numbers it is not even accounting for a third of the average surplus.

Moreover, the purpose of these swaps is to moderate variations in the university’s finances. Much like insurance, they do impose a relatively small structural cost onto the university’s budget. However, over time the years in which they are a net positive and those in which they are a net negative to university finances should roughly balance out. Focusing on revenues and expenses without swaps allows for the analysis of real priorities in institutional planning and allows the swaps to be used for their intended purpose – reducing uncertainty. By evaluating the university’s operational plans largely independent of these swaps the priorities set in university budgets more clearly reflect the university’s true priorities.

A key difficulty in holding the university administration to account comes from two ambiguous components of its planning process. On the revenue side, Ryerson has consistently underestimated its enrolment targets. Enrolment is extremely difficult to predict but it is critical to estimating university revenues and establishing variable costs. On the cost side, the university does not provide adequate detail as to the resources allocated to individual departments making it difficult to clarify where the university administration has set its spending priorities.

Both the university’s enrolment committee and the committee that reviews departmental budget allocations should have representation from the Ryerson Students’ Union and the Continuing Education Students’ Association of Ryerson (CESAR) to provide input, to

Improved Accountability and Governance

ensure the decisions of these committees are in students’ best interests and to better anticipate how the Ryerson Students’ Union and CESAR should be prioritizing their own services and campaigns. Furthermore the Presidents of the Ryerson Students’ Union and CESAR should be ex-officio non-voting members of the Board of Governors to further promote transparent governance.

One likely consequence of the university’s lack of transparency is that, compared to its peers, Ryerson has exceedingly high administrative expenses. Although the university has reduced the share of the budget devoted to administration and general expenses since 2008, its share of Ryerson’s total expenses is still 6.1%, substantially higher than the peer average of 4%.

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0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00%

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Figure 1. Percentage of Expenses Spent on Administration & General Expenses

Ryerson University Comparison Average

Source: Council of Ontario Finance Officers

Tuition Fee Freeze CostsThe centrepiece of the Ryerson Alternative Budget is a freeze in tuition fees. In the face of Toronto’s weak youth labour market it is particularly important that Ryerson remain an affordable option for its hard-working students. Holding the line on tuition increases will mean that Ryerson’s students will keep an average of $175 each to cover increasing living costs and ensure accessibility for our many students with costly family obligations. Importantly, despite claims that a tuition freeze will produce a massive hole in the university budget, the 2015-2016 Ryerson Alternative Budget estimates that a tuition freeze will only forgo about $6.3 million in revenue6. This is less than 1.1% of Ryerson’s actual revenue in 2013-2014 and is manageable through a combination of cuts in administration and the reclassification of grant revenue.

In 2014-2015 Ryerson budgeted to collect $197.8 million in tuition fees. In the second quarter Ryerson University earned 2.6% more tuition revenue than budgeted, indicating that the university had exceeded its enrolment targets. In the 2014-2015 budget the university also projected forward an increase from 2014-2015 to 2015-2016 in undergraduate student’s full time equivalents from 30,280 to 31,370 and an increase in graduate student full time equivalents from 2,160 to 2,270. Factoring in the current year increase in students, the projected increase for 2015-2016 and an average 3% tuition increase equates to $6.3 million, about half of the projected 13 million in lost revenue cited by Ryerson Administration estimated. Note that this lost revenue only leads to a deficit if there are not cost savings or revenues generated elsewhere in the university that can compensate for what has not been collected.

6 The difference between revenue actually earned and what could have been earned if the university had decided to make a different decision, such as increasing tuition fees

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Prioritizing Excellence in EducationRyerson has seen a steady deterioration of student-to-fulltime-faculty ratios over time. This decline has stretched the capacity of faculty to attend to student needs at a time when the university has increased the complexity of the programming being offered by expanding graduate education and offering an increased range of co-curricular and experiential activities. The university’s academic plan seeks to “recognize high-quality teaching and provide

opportunities for faculty, instructors, and teaching and graduate assistants to continually develop their teaching practices and skills, and encourage the use of new and diverse learning and teaching methods” (Our Time to Lead, p. 19). However, worsening student-to-fulltime-faculty ratios are stretching faculty members’ time thin and are reducing their capacity to implement cutting-edge pedagogical techniques.

Table 2. Ryerson University Student-to-Full-time-Faculty Ratio2010-2011 2011-2012 2012-2013 2013-201429.57 30.77 32.34 34.60

Table 3. Faculty Count2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Part-Time Faculty (FTE) 227 228 219 347 347

Full-Time Faculty (FTE) 772 778 832 832 1009

Total Faculty (FTE) 999 1006 1027 1179 1356

Part-Time Faculty (FTE) share of Total Faculty (FTE)

22.7% 22.7% 21.3% 29.4% 25.6%

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0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Figure 2. Percentage of Expenses spent on Full Time Academic Faculty

Ryerson University Comparison Average

Source: Council of Ontario Finance Officers

The rising student-to-fulltime-faculty ratio is not primarily the result of a lack of resources but how they are allocated. Compared to Ryerson’s Ontario peers, the university has consistently allocated a smaller portion of its budget towards full-time faculty. Ryerson has instead been shifting the composition of its faculty away from using full-time faculty towards a heavier reliance on part-time faculty. Without these investments in developing a core, permanent faculty base the university has been short-changing both teaching and its scholarly, research and creative activities.

A key recommendation in the Ryerson Alternative Budget is reducing administrative expenses. We recommend a $4 million cut to administrative expenses, which although substantive would still leave Ryerson with a higher share of its expenses devoted to administration than their peers. Indeed, reducing total expenditures to Ryerson’s peer average would amount to savings of $8.6 million per year and should be a long-term objective that would free additional resources for re-investment in education. However, this budget recognizes that such operational shifts take time.

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Reduce Management ExpensesRyerson University has a very top-heavy administration compared to its peer universities. Using the Sunshine List to identify managers paid over $100,000 per year, it is clear that per student Ryerson has more highly paid managers than its peer universities per student. Reducing administrative bloat to the level where the number of students per Sunshine List Manager or Supervisor is similar to the peer university average ratio would save the university $7 million per year.

Table 4. Students per Sunshine List Manager or Supervisor

2012 2013Ryerson 151 135

Comparison Group Average

199 170

The university can also produce substantial cost savings by performing more of its core tasks in-house. The administration’s expenditures on consulting fees are far higher than we see in other peer universities and although the share of expenditures devoted to contracted services has fallen recently it remains higher than those of its peers. Bringing this down to the peer average would cut consulting fees by $5.7 million.

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Figure 3. Percentage of Expenses Spent on Professional Fees

Ryerson University Comparison Average

Source: Council of Ontario Finance Officers

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Open Source Soft wareClosed source proprietary software creates significant costs for the university. It also drives up costs for students who must purchase software for their personal computers and laptops. This in turn adds to the debt burden associated with post-secondary education. Proprietary software also has lasting negative outcomes. Students learn closed proprietary systems as they learn academic concepts, but into their careers the lock-in costs can make switching difficult. The cost of buying this software will stay with graduates for years to come. Fortunately, open source options exist for many expensive software packages and they often provide a superior product. For example, proprietary statistical software systems, such as STATA, SPSS and SAS have comparable open source alternatives like R, PSPP and ΩNYX. Many of these open source systems are designed so that if the software cannot do what you need it to do, the source code is freely shared so you can create a custom add on package to solve the problem and many of these custom packages are freely shared on the internet. What this means in practice is that open source software is quite flexible and can meet a wide variety of classroom needs. Teaching

students how to use open source software alternatives will place graduating Ryerson students in a better position to exceed in a competitive work environment. It will also save the university money in the long run.

The adoption of open source software will build on Ryerson’s reputation as a leader in applied, cutting-edge education. Currently Ryerson’s library budgets are substantially lower than those of its peers and an increase in its budget can be focused on the acquisition and curation of digital materials. A 5% increase from 2012-2013 expenses along with an increase in the library acquisition budget from .9% to 1% of expenses would cost the university an additional $700,000, which still leaves Ryerson below the peer average. Increasing the use of open source software in particular will reduce out-of-pocket costs for students by avoiding the need for costly purchases or licenses both during their time in university and after graduation as they enter the workforce, especially as young workers are increasingly reliant on self-employed for their incomes.

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Figure 4. Percentage of Expenses Spent on Library Expenses

Ryerson University Comparison Average

Source: Council of Ontario Finance Officers

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0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00%

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Figure 5. Percentage of Expenses Spent on Library Acquisitions

Ryerson University Comparison Average

Source: Council of Ontario Finance Officers

Prioritizing Accessibility - Give it BackThe Ryerson Alternative budget recognizes that accurately budgeting with uncertainty related to government funding is challenging. Much of this uncertainty is related to the ambiguity surrounding funding related to accessibility grants. However, it is clear that universities are dependent on accessibility grants and both the administration and the government know this, and other universities include it in their budget plans. While Ryerson may appear to be minimizing its downside financial risk by being overly-conservative here, consistently having millions of dollars that are unbudgeted every year increases the risk of financial mismanagement as funds are disbursed in an ad hoc manner throughout the year. The Ryerson Alternative Budget recommends managing these risks by bolstering affordability.

Although Ryerson has a demonstrated structural surplus, there will be year-to-year variations in net surpluses. Alongside this, Ryerson’s expenditures on scholarships and bursaries are much lower as a share of total expenses than its peer universities, hurting accessibility. To demonstrate a serious commitment to student financial accessibility our budget includes using 50% of any projected surplus as of January 31st as a “debt relief rebate” to be distributed shortly after reading week to each enrolled student. Such a rebate should be distributed in direct proportion to the amount of tuition each student paid the previous year, effectively making it an after-the-fact tuition reduction. The remainder should be split evenly between the following year’s capital budget and bursaries for those in financial need.

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0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014

Figure 6. Percentage of Expenses Spent on Scholarships and Bursaries

Ryerson University Comparison Average

Source: Council of Ontario Finance Officers

Table 5. Budget ($ in 000s)

Revenue 2013/2014 2014/2015 Proposed 2015/2016

2015/2016 OVER

2014/2015

2015-2016 Increase

(Decrease)Grants 217,081 229,655 230,816 0.5% 1,161

Tuition Fees 174,780 197,794 208,277 5.3% 10,483

Rate Increase 0

Enrolment Changes 14-15 5,143 2.6%

Enrolment changes 15-16 5,340 2.7%

Continuing Education 39,031 40,202 41,409 3.0% 1,207

Other Revenue 10,084 9,344 9624 3.0% 280

Total Revenue 440,976 476,995 480,502 0.7% 15,047

Expenses 2013/2014 2014/2015 Proposed 2015/2016

2015/2016 OVER

2014/2015

2015-2016 Increase

(Decrease)Departmental Budgets 347,329 371,697 392,703 5.7% 10,667

Continuing Education - Direct Costs 28,979 29,848 30,743 3.0% 895

Student Financial Assistance 11,311 12,443 14,931 20% 2,488

Utilities and other non salary provisions 25,922 26,798 27,816 3.8% 1,018

Interest on debt - Capital Expansion 7,109 7,109 7,109 0 0.0%

Infrastructure Maintenance 3,500 3,500 3,500 0 0.0%

Strategic allocations - Added to departments’ base in following year

3,000 3,700 3,700 0 0.0%

One Time Grants 10,825 21,900 0 (21,900) (100%)

Total Expenses 440,976 476,995 480,502

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-40000

-30000

-20000

-10000

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10000

20000

30000

40000

50000

1997

-199

8

1998

-199

9

1999

-200

0

2000

-200

1

2001

-200

2

2002

-200

3

2003

-200

4

2004

-200

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2005

-200

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2006

-200

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2007

-200

8

2008

-200

9

2009

-201

0

2010

-201

1

2011

-201

2

2012

-201

3

2013

-201

4

Figure 7. Ryerson University Operating Surplus/Deficit

Source: Ryerson University Audited Financial Statements

Improved Budget GovernanceThe Ryerson Alternative Budget also recommends some key changes to the governance approach of Ryerson University. Currently the categories defining what information is shared with the Board of Governors does not provide enough information for the Board to make fully informed decisions in fulfillment of their fiduciary responsibilities. The current Schedule 1 only provides five headings: the budget category, the current year’s approved budget, the next year’s proposed budget, the amount over or under from the previous year in dollars and the percentage change.

We propose adding three additional categories. First we would add the previous year budget and the actual results from the last year. By going back to the previous year the Board will be able to see the trend over time in the budget and how accurately management has forecasted expenses/revenues in the category. In addition, we would add the current year projected actuals. While these numbers will not be final the third quarter results have been reported and the expectations should be more accurate. Indeed, both the Ryerson Students’ Union and CESAR who are also accountable to the university’s students provide this information in their budgets.In addition to improving Schedule 1, the Alternative

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Table 6. Current Schedule 1 Headings

Budget Item

2014/2015Approved

Budget

2015/2016 Proposed Budget

2015/2016 OVER

2014/2015

2015-2016 % Increase

(Decrease)

Table 7. Proposed Schedule 1 Headings

BudgetItem

2013-14Approved

Budget

2013-14Actuals

2014-15Approved

Budget

2014-15Projected

2015-16 Proposed Budget

2015-16 OVER

2014-15

2015-16 % Increase

(Decrease)

Budget also proposes adding two additional schedules to aid the Board of Governors in evaluating management proposed budgets. First the Ryerson University Budget should add a schedule matching the quarterly financial reports received by the Board of Governors (see table 8). Management must prepare this information to create the quarterly financial statements, and it only makes sense to include this information upfront for the Board to evaluate the university’s financial performance.

Second, Ryerson University should adopt a more detailed expenses statement by Responsibility centre. While it is not the role of the Board of Governors to review each department budget line by line, effective accountability requires the Board to understand how management is allocating resources. Without these breakdowns it is unclear how the university sets its priorities and how those priorities change over time.

Alongside these additional schedules Ryerson University should also provide a more detailed budget report (see table 9). Wilfrid Laurier University’s budget report provides an example of clearer reporting that can be used to strengthen overall governance and financial accountability (see http://legacy.wlu.ca/documents/58711/Budget_Report_201415_Board_Approved_June192014.pdf). While the Ryerson University Alternative budget is agnostic about the specific numbers within the Wilfrid Laurier University annual budget, the overall approach with detailed information and explanation about budget highlights provides depth, which can aid the Board of Governors and university community in understanding the priorities. Budgets are fundamentally not about the numbers; they are about priority setting. The Ryerson University Budget currently reads as a dry set of numbers. An effective budget should tell a story about priorities so the Board and community can evaluate management’s decisions.

Table 8. Additional Schedules

Revenue

Operating Grant

Student Fee

Sales and Services

Donations Recognized

Amortization of Deferred Capital Contributions

Investments and Other Income

Total Revenue

Expenses

Salaries and Benefits

Materials Supplies, Repairs and Maintenance

Bursaries and Scholarships

Interest

Amortization of Capital Assets

Total Expenses

Revenue Less Expenses Before Swap

Loss/Gain Swap

Revenue Less Expenses

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Table 9. Proposed Expenses Statement by Responsibility Centre

Budget Item 2013-14Approved

Budget

2013-14 Actuals

2014-15 Approved

Budget

2014-15 Projected

2015-16 Proposed Budget

2015-16 OVER

2014-15

2015-16 % Increase

(Decrease)Academic administration

Library

Vice Provost Students

Registrariat

VP Research & Innovation

Graduate Studies

Continuing Education

Faculty of Arts

Faculty of Communication & Design

Faculty of Community Services

Faculty of Engineering & Architectural Science

Faculty of Science

Ted Rogers School of Management

Yeates School of Graduate Studies

TOTAL ACADEMIC BUDGETS

VP University Advancement

Financial Services

CCS

Human Resources

Campus Facilities & Sustainability

Administration

TOTAL ADMINISTRATION DEPARTMENTS

Base Budget Reduction

TOTAL DEPARTMENT BUDGETS

Provisions for salary and benefit increases

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Non base salaries (sabbaticals, admin allow)

Leases

Growth provisions

TOTAL DEPARTMENT BASE BUDGETS PER SCHED 1 OF APPROVED BUDGET

Continuing Education – Direct CostsStudent Financial AssistanceUtilities and other non salary provisionsInterest on debt – Capital ExpansionInfrastructure MaintenanceStrategic allocations – added to departments’ base in following yearTOTAL BASE EXPENSES

16

ConclusionWhile Ryerson University can likely find savings throughout the budget through a line by line process, our report focuses on three key areas where the administration can make systematic changes which will result in substantial savings. Compared to its peers Ryerson University is spending a higher percentage of its budget on an administration. The Ryerson Alternative Budget reduces administrative expenses by $4 million to bring expenses closer in line with the peers. Ryerson University also operates with a higher number of managers and supervisors per student than its peers. The Ryerson Alternative Budget finds $7 million in savings by reducing this bloated management structure. Finally, Ryerson University spends significantly more of its budget on external consultants than its comparison peers. The Ryerson Alternative Budget reduces the use of external consultants resulting in savings of $5.7 million. In addition to these four changes we also believe a more accurate forecasting of revenue will improve Ryerson’s financial position during the budget process. This change will not impact the actual financial position of the university, as

this revenue exists whether it is accurately budgeted or not, instead it will allow this revenue to be allocated during the budgeting process.

The Ryerson Alternative Budget makes the case that we can do better. With the identified opportunities to save $16.7 million, as well as taking into account the structural surplus of an average of $14 millon each year over the past 5 years the demands of the Freeze the Fees campaign are not only reasonable but entirely possible while also guarding the financial integrity of Ryerson University. Ryerson University can prioritize both accessibility and excellence in education and Ryerson can do so with the support of its students. Indeed, when the administration chooses to engage with students in a transparent manner they find Ryerson students willing to engage creatively and constructively in finding alternatives to the status quo. Ryerson students live and breathe a culture of innovation and critical thinking – by bringing that to the governance of our own campus we can transform our university and the world.