Last year, the Columbia Postdoctoral Workers (CPW) and the Columbia chapter of the American Association of University Professors (AAUP) hired a professional to analyze Columbia’s finances to get the truth about its budget. Earlier this week, CPW and AAUP presented the professional’s findings.

“It just boggles my mind that a place like Columbia is crying poverty,” said Dr. Bunsis on Zoom.

On Monday, May 2, CPW and AAUP hosted Professor Howard Bunsis, an expert in institutional finance and accounting professor at Eastern Michigan University. Over the years, Professor Bunsis has analyzed publicly available data from multiple universities such as Portland State, Johns Hopkins, and Rutgers. As a result, faculty and staff at these institutions have been able to challenge claims of institutional poverty and draw attention to management issues. During the event that took place yesterday, Professor Bunsis presented his latest findings on Columbia’s finances.

As of 2022, Columbia University’s endowment was valued at $13.28 billion. Additionally, the university had nearly $1 billion in investments outside of the endowment.  Dr. Bunsis compared the magnitude of this sort of money to the owner of the METS, Steve Cohen, saying that “he manages this kind of money.” 

A significant portion of Columbia’s endowment, comprising 78% of its investment portfolio, is allocated to high-risk securities. However, over the years, the university’s endowment has been bested almost every single year by the S&P 500 return (the standard for measuring overall stock market returns), despite the investment strategy.

Columbia University’s total expenses for the year 2022 amounted to approximately $5.5 billion. Out of this, only 12.1% of the expenses were covered by the university’s endowment. Even for a private school, this figure is considered relatively high.

During his presentation, Dr. Bunsis expressed apprehension regarding Columbia University’s financial transparency, particularly with regard to the IRS 990 section. The IRS 990 section discloses information on the compensation of the highest employees. However, the most recent public access to this information only goes as far back as 2020. According to Dr. Bunsis, the Columbia website has no available 990 forms. He emphasized that the university administration should prioritize making the IRS 990 available to the campus community as soon as it is submitted to the IRS.

After addressing the issue of financial transparency, Dr. Bunsis turned his attention to Columbia University’s reserves. In 2022, the university’s reserves totaled $8.3 billion. Dr. Bunsis then calculated the primary reserve ratio by dividing the reserves by the university’s expenses, resulting in a ratio of 151.6%. Multiplying this by 12, he arrived at a figure of 18.19, which represents the number of months of expenses in reserve. This figure is significantly higher than the “solid” threshold of 6 months. In Dr. Bunsis’ own words, “They got way more reserves than they know what to do with. That’s the bottom line.”

Bunsis’ words were further emphasized when he delved into Columbia University’s operating cash flow, which is calculated as total cash inflows minus total cash outflows. The total cash inflows include various sources such as grants, contracts, tuition revenue, housing, and dining. In 2022, Columbia University reported operating cash flows of $911 million dollars, which is indicative of its strong financial performance. This amount suggests that the university is collecting more funds than it is spending, contributing to its overall financial success. In short, according to Bunsis, “There is no way Columbia should be cutting anything in terms of their budget.”

After discussing Columbia University’s financial reserves and operating cash flows, Dr. Bunsis turned his attention to the university’s AAA bond rating. This rating is the highest possible bond rating and serves as a confirmation from external sources that Columbia is in excellent financial condition. Notably, not all Ivy League institutions have achieved an AAA bond rating, with Brown, Cornell, and Penn excluded from the list. Thus, Columbia’s AAA bond rating serves as a testament to the university’s financial stability.

However, despite this clear financial stability, Columbia still lacks financial transparency. Dr. Bunsis compared Columbia, Brown, Harvard, and Yale’s audited financial statements. When it came to their natural expenses, Columbia was the only institution that combined compensations and benefits into one number. These other institutions had salaries and wages and employee benefits separated. Columbia also had the lowest number of natural expense categories in total—compensation and benefits and all others. These 2 categories were underwhelming in comparison to Harvard’s 9, Brown and Princeton’s 8, and Yale’s 4. “When you put numbers in fewer categories, you’re just revealing less information,” Dr. Bunsis said. “Is this evil? Is this intentional? Is this just the way they have always done it? Do they not care?” Obviously, this makes it extremely difficult to assess how money is being spent at Columbia.

With regards to Columbia’s functional expenses, Columbia yet again lacks transparency. In their expense distribution, the university combines instruction and educational administration. “No one else does this,” points out Dr. Bunsis. “What they’re doing is taking all the post-docs, all the part-time faculty, and the full-time faculty, and they’re combining you guys with who? The academic Deans, the associate Deans, and all that.”

In most places, these categories are separate. “This should not happen. This is so out of line. It’s hard for us to see what is going on,” Dr. Bunsis said. Ultimately, administration and instruction are not the same thing. He believes that Columbia needs to explain why they deviate from IPEDs reporting instructions. (IPEDS is a system of surveys conducted annually that gathers information from U.S. colleges, universities, and technical and vocational institutions that participate in federal student financial aid programs). This makes Columbia difficult to compare with the other Ivies in terms of spending.

“What are you doing? And why are you doing this?” Dr. Bunsis asked. 

Ultimately, despite Columbia’s lack of transparency regarding expenses, one thing is clear. Based on its solid financial reserves, cash flows, and just the university having the highest possible AAA bond rating, Columbia University is in excellent financial condition. These factors refute any claims of budget “holes,” “deficits,” or the need for budget cuts.

Money via Bwog Archives