& Chief Financial Officer
Leonard W. Sandridge
The 1990s have seen a remarkable resurgence of American business, as it success fully restructured and repositioned itself for eminence. The University of Virginia has been committed to these same practices consistent with its academic mission, and the results, we believe, have been similar.
The University today is an efficient, highly productive organization serving the Commonwealth of Virginia and the nation through programs that are international in scope, with a budget of almost $1 billion, ten thousand employees, a direct customer-base of eighteen thousand students, and a AA1 bond rating from Moody's. Not only are we first among public universities in the nation, we are the most fiscally efficient in our peer group. According to U.S. News & World Report, educational expenditures per student average $31,101 at our country's top twenty-five universities. Expenditures per student at the University of Virginia are less than half that amount, at $13,349.
Like many organizations in the 1990s, we have discovered that creating a system of streamlined excellence is a matter of continuous, collaborative, and synergistic improvement promoted by every division of this institution. This year the University's central administration reexamined the way it delivers service, striking alliances with groups from both the public and private sectors, while ensuring that principles of equity and fairness are observed.
We have shortened delivery time for goods and services, consolidated related units, established cooperative purchasing arrangements, improved customer services, expanded administrative services to other institutions, improved the capital outlay process, and reduced the number of approvals needed on action forms, among other initiatives. And we have established a team structure for reviewing core functions in finance, accounting, purchasing, and human resources and for completing specific reengineering tasks.
In these efforts we have been greatly assisted by the decentralization of University functions from state control. This year, the Commonwealth of Virginia approved a number of proposals submitted as part of the University's pilot decentralization initiative. These measures, such as the authority to write and distribute all checks locally and to make purchases of equipment and supplies from companies "off" state contract, have already improved the efficiency of University operations and cut costs. Through decentralization, the University expects to save $250,000 in the first year and $500,000 each year thereafter.
Of course, the University is much more than a business. We are a community in our own right. We have our police and bus service, hospital and clinics, restaurants and snack bars, research parks, and housing for seven thousand. Each day, forty thousand people pass through the Grounds, and our contacts with people in institutions and countries around the globe extend the size of our academical village many times over. A key to preserving this extraordinary resource in times of change is our endowment, which, at $730 million, is fifth among public institutions in the country. Through careful management and the generous support of friends and benefactors, our pooled endowment fund grew at the average annual rate of almost 14 percent over the last ten years.
Yet, despite this progress, there are still challenges before us and much still to do. Financial aid is an area of critical concern as federal support erodes. Faculty salaries are once again falling behind those of our peer institutions. These are serious issues, touching the core of our academic mission, that must and will be addressed.
But they also remind us that restructuring is an ongoing process and that recreation, as Thomas Jefferson predicted, would be necessary to the continued wellbeing of the University. At the University of Virginia, we can trace the process of restructuring back through the last century, and it is clear that we owe many of our distinctive and invaluable institutions, like the Honor System, to this process of rethinking and reevaluating. It is our responsibility and, indeed, our privilege to further this process as we prepare the University for the twenty-first century.
Leonard W. Sandridge
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