Ohio University’s Board of Trustees met Friday in both committees and executive session to discuss divestment and capital projects as well as hear the findings from an external audit that began last year.
OU’s divestment project is ongoing and, during the Oct. 7, 2021, Board meeting, several properties were approved for divestment, including Crewson House, Lasher Hall and Haning Hall.
Resources, Facilities, and Affordability Committee
The Resources, Facilities, and Affordability Committee discussed the budget for financial year 2022, or FY22, as well as three different resolutions.
OU is projecting a positive operating budget of approximately $36 million during FY22.
Steve Casciani, chair of the Resources, Facilities, and Affordability Committee, said the positive budget was mostly due to remaining COVID-19 Higher Education Education Relief Funds, or HEERF II, that still needed to be allocated, as well as lower projected COVID-19 expenses.
One of the resolutions passed during the meeting was the CAS Quasi-Endowment Resolution, which will appropriate funds to The College of Arts and Sciences Faculty and Graduate Student Research Support Fund.
The Board passed a motion to send a resolution detailing the demolishment of the Research and Technology Center to the full board with the recommendation for approval, and the capital projects resolution was carried.
Steve Wood, chief facilities officer at OU, said in his explanation the Board is considering this demolition as part of its divestment plan. Wood explained the Board is considering the demolition because the cost to utilize the building is higher than the value they see in the site. It would cost approximately $25 million to modernize the building while building an entirely new research lab would cost around $30 million.
The estimated cost for the demolition of the Research and Technology Center is $3.25 million and will be used as green space.
The capital projects resolution also included a $1 million budget amendment for the Russ Research Opportunity Center construction. Wood explained how now that construction is about halfway done, they had underestimated the cost when the original budget was approved.
Also in the resolution was a $1 million plan to repair roofs on the Athens campus, replace Peden Tower’s roof at a cost of $600,000 and an upgrade to HVAC controls, costing $550,000.
Tina Payne, chief finance and administrative officer for the Division of Finance and Administration and executive director of treasury management, presented a resolution to fund space portfolio reduction projects. The proposal recommends that an FY23 century bond of $10 million be used as the funding strategy to support the reduction projects. The supplemental charge of $10 million that will be used toward the FY23 century bond is from a tranche that was not spent in FY21.
The Board of Trustees passed the resolution that determined how the bond would be balanced in the university’s budget. A scenario in which the $10 million is paid back over a longer period of time was suggested to the Board by treasury management and subsequently approved.
“(The scenario) maintains financial discipline to keep the model balanced, but has a more moderate payback schedule, which lessens the annual burden on the university operating budgets,” Payne said.
The Board also received updates on the Ohio University Airport from Gwyn Scott, associate vice president for auxiliaries. Scott discussed aircraft operations, an increase in the training department’s flight students and a new business model for its air transportation service, or ATS.
To become more cost-efficient, the OU airport only provides ATS through the charter service provider, Wheels Up, Scott said. The airport no longer has pilots on staff due to the change.
Audit and Risk Management Committee
The Audit and Risk Management Committee heard a presentation from Christine Torres of Crowe LLP on the university’s external audit.
The presentation concludes the near eight-month-long 2021 audit, which began in April of 2021 with audit planning, information requests and sample selections. The purpose of the audit, Torres described, is to check high-risk categories such as revenue recognition, payroll, capital assets and debt, to ensure OU is in compliance and recording items properly.
Torres described the firm’s method of testing and confirming the university’s financial statements, as well as reported final findings from the audit.
The university was found to be fully in compliance and properly implementing financial procedures, according to Torres. There were no concerning findings or significant changes to accounting procedures.
The committee ended with an executive session to hear chief auditor and information security updates.
Addie Hedges, Donovan Hunt, Lydia Colvin, Alex Imwalle and Sophie Young contributed to this report