This September, the University launched its $3 billion
“Yale Tomorrow” capital campaign. Building upon the
strong foundation made possible by current and past
donors, the funds raised in this new campaign will literally
create the future! This year’s financial report focuses on
the new capital campaign and how the University uses
donations to improve academic programs, student learning
experiences, infrastructure, and Endowment support
to allow Yale to remain competitive and fulfill its mission
of creating, disseminating, and preserving knowledge in
an increasingly global environment.
While we are excited by the potential of the campaign, it
is also important for us to continuously look for ways to
enhance, streamline and make more productive the operations
of the University. In fiscal 2006, the University was
able to keep expenses within the limits of available revenue,
and closed the year with a net increase of $7 million
in operating funds. The University continues to improve
the accuracy and e∞ciency of all of its processes. In addition
to the continued rollout of expense management systems,
e-procurement, and online travel applications, the
University completed the implementation of Yale’s “eBillePay”
system. This internet-based system allows students
to receive, manage and pay their tuition and other bills
electronically 24 hours a day, every day of the year. In
other areas, Yale strengthened its oversight of workers’
compensation by implementing new controls and a new
system to ensure better claims management and tracking.
The University has engaged the leading supplier of electronic
staffing solutions to enhance our staffing capabilities.
New business processes and a new system to support
this initiative will be fully implemented in fiscal 2007. The
University also completed a plan to upgrade and simplify
its core Oracle Financial applications.
Endowment growth was very strong, with a 22.9% return
on investments that resulted in increased net assets of
$3.3 billion. The continued generosity of donors, combined
with prudent management and strong investment
returns, has allowed the University to continue to meet its
ambitious current and long-term goals. One of the strategies
to help maintain the University’s competitiveness
includes continued investment in the physical infrastructure,
which helps attract faculty, support ground-breaking
research, and provide students an environment to foster
excellence and creativity. The University spent $265 million
on facilities renovations and plans to spend more
than $300 million a year over the next ten years to bring
facilities up to modern standards and complete planned
new state-of-the-art buildings supporting key initiatives
across campus.
The University was notified in June of 2006 that the federal
government was initiating an investigation into our
grant and contract financial practices. The University is
cooperating with the investigation fully. In addition, we
launched a comprehensive “100 day plan” to identify and
correct any potential issues with University practices in
this important area. While we will be working on this for
a while, already controls have been tightened, new and
revised policies put in place, and a significant investment
made to train business office personnel, lab personnel,
and principal investigators to improve all aspects of financial
accounting and controls for grants and contracts.
Rules and regulations for grant activity continue to grow
in complexity, but we are determined to be fully compliant
and to become a model for best practices in this area.
A new position has been created–Associate Vice President
for Research Administration–and this unified leadership
and organizational structure has already strengthened our
capacity to meet federal requirements. I will continue to
work personally in this critical area to ensure we have the
appropriate infrastructure in place to administer this
important activity in the most efficient and transparent
manner.
John Pepper retired from his position as Vice President
for Finance and Administration this past January and I
was appointed in June 2006. While John led Finance and
Administration for only two years, he had a significant
impact on the University, especially in the development of
staff. We appreciate all of the good work John did for the
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