At no time in its history has the University of Virginia been
better prepared to fulfill the aspirations of its founder. The
success of the recent campaign, the strength of our endowment
in a volatile market, the support we attract for cutting-edge
research, the effective management structures now in place, and
the extraordinary community of students and faculty assembled
on the Grounds--these and many other positive factors have
enabled us to pursue ambitious goals even in difficult times.
The Virginia 2020 commissions have issued a set of recommendations,
approved by the Board of Visitors, designed to establish new strengths
in areas that are critical to the University's mission and
national standing. Our responsibility is to act on these recommendations.
The possibilities are exciting but also challenging. As an institution,
we cannot simply expect additional resources to carry us to the
next level. We must make hard decisions and apply our funds in
ways that will provide the greatest leverage for achieving our
aspirations. Our prospects for 2020 will be determined by our
ability to remain focused on our core purposes of teaching, research,
public service, and health care.
A University Prepared for Change
Fortunately, we have an excellent base from which to start. Fitch,
the international rating agency, has upgraded the University's
bond rating from AA+ to AAA, citing our strong balance sheet,
substantial liquidity, high student demand, and demonstrated fund-raising
capabilities. Moody's has also given the University a Aaa
rating, a distinction shared by only two other public universities.
This is a clear vote of confidence from the financial community
in the sound condition of the University.
Inc., one of the leading credit rating agencies, has upgraded
the University's General Pledge Revenue Bond issues
to AAA status, the highest rating. The Fitch upgrade is
the second for the University, which received a Aaa rating
from Moody's in the fall of 2000. Only two other public
universities hold this top ranking.
based its upgrade on the University's sound financial
condition, as well as its modest level of outstanding indebtedness
and the substantial endowment assets held by the institution
and its related foundations. The agency also noted that
the University "enjoys the selective admission standards
and student quality indicators more commonly seen in the
nation's elite private universities."
endowment has held steady in turbulent market conditions and consistently
ranks among the five largest endowments of any public university,
including the University of California system. By the end of the
last fiscal year, it had grown to $1.74 billion dollars. Our average
annual compound return for 20002001 was 2.0 percent, a significant
accomplishment in a time of broad market declines. Adding trustee-held
funds and endowments managed by University-related foundations
pushes the total private assets held for the support of the University
to approximately $2.2 billion.
For the 20012002 fiscal year, the Board of Visitors has
approved a $1.41 billion operating budget that includes a 7.4
percent increase for the Academic Division. Also in the budget
is $1.42 million to fund health insurance for graduate students,
a critical factor in our ability to attract the most promising
scholars to our academic programs. In these and many other ways,
we are working to provide a greater level of service to our students
and the citizens of Virginia and to create a stimulating and rewarding
environment for the people who work on their behalf.
for Learning and Discovery
Over the past decade, with the support of donors and the Commonwealth,
we have invested heavily in new and renovated buildings, and we
continue to make significant improvements and additions to our
facilities. Major projects are under way at the Law School, where
a new faculty and student center is taking shape, and at the Darden
School, which is completing Phase II of the Darden Grounds. MR-5,
a new building for medical research, is nearing completion, as
is the research wing on Clark Hall, which will provide first-rate
laboratory space for the Department of Environmental Sciences.
Our research efforts also will be strengthened by a materials
science building now on the drawing boards, and we will soon realize
a long-held dream of constructing a special collections library.
into the future, we are making plans for a special events center
and basketball arena, a new arts complex, another medical research
building, and an addition for the McIntire School of Commerce.
Other schools are taking steps to address their long-range facilities
needs, including the College and Graduate School of Arts and Sciences,
which intends to make substantial improvements to the venerable
but aging buildings in the South Lawn area as well as to construct
a state-of-the-art facility to integrate a variety of disciplines.
Also envisioned is a pedestrian bridge over Emmet Street in the
University Hall area that will serve as an important connection
between the North and Central Grounds. As we obtain the funds
to pursue these projects, we will have a unique opportunity to
reshape and reunify the Grounds.
forward, we are ensuring that we have the people and structures
in place for the effective management of a university of this
size and complexity. As part of this effort, Yoke San L. Reynolds,
a highly capable and experienced administrator formerly of Cornell
University, has assumed the newly created post of vice president
for finance. She serves on President Casteen's cabinet and will
play a vital role in maintaining the fiscal health of the institution.
This year we completed the initial phase of the Integrated Systems
Project, a five-year effort to replace obsolete core technology
and business systems in finance, human resources, and student
services with an enterprise resource planning system developed
by Oracle. This first phase included general ledger, funds management,
labor distribution, purchasing and accounts payable, accounts
receivable, and order entry/inventory. All phases are expected
to be completed by the end of 2004 and will provide the University's
Academic Division with a unified and efficient management information
At the same time, the University has begun working closely with
General Electric Medical Systems to implement the Six Sigma quality
control process at the Medical Center. Pioneered by General Electric
and Motorola, Six Sigma provides a structured, quantitative framework
for making decisions that breaks down complex processes into their
essential components and carefully analyzes each element for its
potential to create a defect. The result will be a more effective
and efficient operation with lower employee turnover and decreased
medical errors. Through these and other initiatives, we have already
improved staffing in the University Hospital, reducing turnover
in nursing staff to 17 percent and returning twenty-five beds
An Experienced Leader Oversees Financial Operations
what qualities attracted her to the University, Yoke San
L. Reynolds cites the reputation of its leadership, its
stature among public universities, and its "extraordinary
academic record and legacy." In May, Ms. Reynolds took
charge of the operations that sustain that legacy.
As the new vice president for finance, Ms. Reynolds oversees
financial administration; sponsored research administration;
debt management; human resources; business analysis; risk
management; and business operations such as the bookstore,
parking and transportation, and housing and dining. Her
responsibilities also include administrative oversight of
University-related foundations and the development of a
process for administrative policies, and she is taking part
in strategic planning and institutional compliance efforts.
Ms. Reynolds brings to the University an impressive record
in financial administration. After six years at the State
University of New York at Albany, where she served as assistant
vice president for financial management, she joined Cornell
University. During her ten years there, she rose to the
position of vice president for financial affairs and university
graduate of the University of Singapore and a certified
public accountant, Ms. Reynolds holds a master's degree
in economics from the University of Michigan, a master's
in accounting from SUNY-Albany, and a diploma in music from
the Royal Conservatory in Toronto.
Toward the University's Third Century
With the support and direction of the Board of Visitors, we have
already begun to act on a number of the Virginia 2020 recommendations.
We have developed a five-year plan to place the Department of
Athletics on a secure financial footing that will allow it to
achieve its potential. We are making progress toward creating
an exciting new setting for the arts and up-to-date facilities
for the sciences and engineering. With the Board of Visitors,
we are exploring more effective oversight mechanisms for the Medical
Center, and we are working with the dean of students to improve
the quality of life in fraternities and sororities.
The success of the campaign has given us the opportunity to think
coherently about the University's future as well as the momentum
to carry it forward. The Virginia 2020 planning process provides
a roadmap for this progress. With the dedication and talents of
our faculty and staff and the support of our benefactors and the
Commonwealth, we will create by 2020 an institution that truly
fulfills the promise of Mr. Jefferson's Academical Village.
Leonard W. Sandridge