Report of the
Executive Vice President
& Chief Financial Officer

Leonard W. Sandridge

As we approach the twenty-first century, faculty and staff are engaged actively in formulating initiatives needed to ensure that the University of Virginia continues to offer the citizens of this Commonwealth the finest academic and health care programs of any in the nation. Over the past decade, the University has cultivated the means and specialized expertise needed to respond to new challenges and steward resources. The University's institutional capabilities must continue to improve and develop to support our commitment to service, quality, and responsiveness.

"Over the past decade, the University has demonstrated its ability to make the difficult decisions necessary for the long-term health of this institution. It has shown both a refusal to respond to fads and a willingness to make and to sustain bold decisions when they benefit those we serve."

A number of factors have combined to create the strengths that make long-range strategic planning and action possible. The Campaign for the University has played a major role in contributing to the ongoing excellence of our programs and producing the extraordinary financial stability that we enjoy as an institution. Private gift support in 1997-98 approached $130 million, almost double the level of 1993-94, and our endowment stood at $1.1 billion. Just as significant, the campaign has revealed widespread and enthusiastic support for the ways in which we carry out our mission. The demonstrated confidence and loyalty of the University's supporters is one of our most important assets as we move forward.

The deep-seated commitment of our faculty to the University's educational and health care missions is another critical strength. Faculty members have spearheaded a number of initiatives designed to strengthen the on-Grounds intellectual community and to serve our off-Grounds constituents. Their outstanding success in attracting sponsor funding for research and education programs -- totaling $164 million this year -- is vital to our financial stability.

A third source of excellence is the University's evolving partnership with the state. Although state funding for higher education may never return to the relative levels of the 1980s, there is a growing appreciation of the role the University plays in the state's economic development and education of its workforce. The state has granted the University greater freedom from state regulation and oversight in a number of administrative areas, allowing us to streamline operations and manage costs.

The collective value of these strengths is refiected in the Aa1 bond rating assigned to the University by Moody's Investors Service. The University is one of just three public universities in the nation to receive this top rating.

The Skills to Serve Our Constituents

ENDOWMENT GROWTH (in millions)

Endowment fund balances have increased 70 percent from 1994 to 1998, exceeding the $1 billion mark for the first time last fiscal year. The endowment has consistently ranked in the top five for public institutions.

The evolving financial strength of the University has been paralleled by a corresponding development in the range and depth of our organizational capabilities. This growth has been driven by our commitment to provide the best possible value for our customers, whether they are students in our classrooms, patients who use the hospital and clinics, or the employers who depend on the skills of our graduates.

The University now delivers an extraordinary range of services, either on its own or in conjunction with others. The University provides a variety of basic services, housing and feeding thousands of students, operating a bookstore, staffing a police department, running a day care center, operating a transportation system, managing a $1 billion endowment and operating a tertiary care teaching hospital. Other ventures involve research parks, a major information technology infrastructure, a physical plant of more than 580 buildings, historic Grounds, patents and licensing arrangements with venture capitalists, and a comprehensive set of placement, counseling, programming, and financial aid services for our students. All of these University units have demonstrated their desire to meet the changing needs of their customers.

This responsiveness refiects the commitment and dedication of our employees. The University possesses a strong management team, experienced in coordinating the activities of a large and complex organization, and staff at all levels have the opportunity to master new skills, plan and implement changes in how we do business, and advance in their profession. In reducing bureaucracy and simplifying processes, we have created an institutional culture that nourishes innovation and values creative solutions. Every position is important, and every individual is valued. The expertise assembled at the University is an indication of our growing organizational maturity.

The Strength to Follow Through

Over the past decade, the University has demonstrated its ability to make the difficult decisions necessary for the long-term health of this institution. It has shown both a refusal to respond to fads and a willingness to make and to sustain bold decisions when they benefit those we serve. In doing so, we have created an organizational infrastructure that is strong yet flexible enough to respond to the challenges of the future.

Sincerely,

 
Leonard W. Sandridge
(Executive Vice President and Chief Financial Officer Home Page)

 

Financial Report

Financial Highlights