The University of Rhode Island’s annual budget took a hit due to COVID-19, which could force leadership to utilize other funding sources to maintain operations.
The University’s final financial statement remains indefinite due to the dynamics of COVID-19. The absence of a state budget has widely affected the University’s financial plan and spending for the 2020-2021 academic year. The Rhode Island General Assembly has opted to wait and see if the United States Congress passes a second stimulus bill before crafting a state budget.
“The COVID-19 pandemic has impacted all [of] the finances in the state of Rhode Island, so we do not have the budget that we usually would have before July 1,” Provost and Vice President for Academic Affairs Donald DeHayes said. “There could be a shortfall from the state while our expenses go up, we don’t know yet; but, we are hopeful that within a month or two the state will reconcile this situation.”
According to DeHayes, URI’s financial plan for this unprecedented school year is “trying to be as constrained as possible” by spending only what is needed to maintain base operations.
One of the greatest financial sources the University is depending on, according to Linda Barrett, the budget and financial planning director, is the Coronavirus Aid, Relief and Economic Security (CARES) Act. According to the United States Department of the Treasury, the CARES Act aims to provide fast and direct economic assistance for American workers, families and small businesses and preserve jobs for American industries. It was passed by Congress in March.
The University was granted $5.5 million from the federal government to accommodate extra expenses caused by the pandemic. This includes sanitizing equipment and financial assistance provided to students who were unable to live on campus with the Transition Assistance Grant (TAG).
TAG was created by the University to help offset the challenges many students faced due to on-campus housing this semester. It stipulates that students who continue at URI will be granted a $3,000 credit to their student account for the entire academic year. These students will also get a small dining plan and free parking this fall, in exchange for opting out of their housing.
URI will continue to use its CARES Act funding before it turns to contingency funds.
Contingency funds are funds composed of reserves left over at the end of each fiscal year. There are separate contingency funds for organizations on campus such as dining, housing and even club sports. However, the contingency funds the University would rely on in this situation would be funds left over from the remains of base operation investments. The base operations investments include sanitizing equipment, transportation, classroom development and other essentials required to keep the University running.
The University hasn’t had to use the contingency funds yet due to COVID-19.
These contingency funds are used in one-off situations rather than long-term investments. The funds could be used in the case of a natural disaster, for example. If there was a hurricane or floods where URI would require extra funding in order to update their way of operations or to repair damages.
In the case of COVID-19, DeHayes said that most of the extra funding has gone towards the updating of technology throughout the University, like the switch from Sakai to Brightspace.
“It is important for us right now to have the most technology within the classrooms,” DeHayes said. “And as important as it is right now, it will also be beneficial to the University moving forward.”
The University has also held off hiring new faculty members, something they’d typically invest in during a normal academic year, DeHayes said.
With the $5.5 million from the CARES Act, the to-be-determined state budget and the backup contingency funds, it is still important for the University to cut down on spending, due to the fact that contingency funds only replenish once a fiscal year, which at URI runs from June 30 to July 1 of the next year.
Matthew Bodah, vice provost for academic personnel and budget, said the University is doing everything it can to uphold it’s classroom standards for students during these fiscally and socially uncertain times.
“The University is trying to put itself in a safe situation,” Bodah said. “Professors, TAs and grad[uate] students have made great effort training over the summer without complaints to get ready for this school year, really trying to improve our online teaching strategies.”
Although times are trying right now due to budget shortcomings and a switch to more remote learning, DeHayes is hopeful for students.
“One thing that is certain is that this is a great time for students to stay in school and focus on earning their degree because alternate options such as travel aren’t available right now,” DeHayes said.