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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.

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Fitch's Highest Rating

Fitch, 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.

Fitch 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."

Our 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 2000–2001 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 2001–2002 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.

Places 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.

Looking 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.

Systems for Success

Moving 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 system.

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 to service.

Yoke San Reynolds Photo
Yoke San Reynolds
An Experienced Leader Oversees Financial Operations

Asked 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 controller.

A 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

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