Legislative Committee Approves New Guidelines For How UW Reports Its Financial Reserves

The Legislature’s audit committee has unanimously approved new guidelines for reporting the University of Wisconsin’s financial reserves, but some of the big decisions are yet to come.

The plan approved by the committee lays out consistent metrics for the UW to calculate its fund balances, which were the subject of intense scrutiny by lawmakers last year. For example, the UW would have to calculate the size of its tuition fund balance in both dollars and as a percentage and explain how much of the money was already obligated to be spent and how much was reserves.

UW System President Ray Cross told lawmakers the Board of Regents would do more budgeting based on actual balances and would report more frequently to the Legislature.

“All of this should lead to a better understanding of our fiscal position – where we really are and where we project we will be,” said Cross. “And that should lead us to no financial surprises.”

The next stop for this plan is the Legislature’s budget committee, which will be asked to make more controversial decisions – for example, what the threshold should be for university institutions’ balances after which they would need to justify why they have the money. Lawmakers could also decide on the right percentage for minimum balances at every UW institution.