The UNC Board of Trustees Finance, Infrastructure and Audit Committee discussed the newly-approved All-Funds budget, a plan that would view the University's budget holistically and increase revenue and expenditure transparency, at its meeting Wednesday.
Real estate proposals and follow-ups to endowment fund approval were also on the agenda. The committee reviewed the Office of Internal Audit Charter and the Finance, Infrastructure and Audit Committee Charter and received a financial update from Chief Financial Officer Nathan Knuffman.
Internal audit annual review
- The Chapel Hill Foundation Investment Fund, a pool of multiple foundations and funds for the purpose of University investment, was valued at $5.1 billion as of June 30.
- The UNC Investment Fund, a company that allows for other UNC-System schools to invest alongside CHIF, is valued at $10 billion, including CHIF’s value.
- The UNC Management Company is a nonprofit 501c(3) that manages the CHIF.
- After a historic decline at the beginning of the COVID-19 shut down in March 2020, the markets — along with the UNCIF and CHIF’s returns — have dramatically increased over the past year.
- The UNCIF saw a record high return of 42.3 percent for this fiscal year.
- It has been “the best year in a generation or more,” Chief Audit Officer Dean Weber said.
- Record highs were driven by high investment in private equity as more companies than expected went public in this fiscal year.
- Federal fiscal and monetary policy aimed at increasing investment along with the University’s response to COVID-19 also contributed to the high return, Weber said.
- “That (growth) is phenomenal, so congratulations to you and your team," Chancellor Kevin Guskiewicz said to Weber, before adding that other schools, such as University of Virginia, saw similar if not better numbers.
- Weber responded that those schools with the highest allocation to venture capital received the highest returns, and said that UNCIF was “in good company” with its 42.3 percent.
Financial update from finance and operation
- Knuffman focused the presentation on a newly-approved budget plan, entitled the All-Funds budget. As the name suggests, the plan seeks to view the funds in a “single template,” Knuffman said, in order to understand the growing budget of the University.
- The All-Funds plan was approved by the Board of Governors last week.
- According to Knuffman, the UNC System office wants the All-Funds to ensure that “scarce budget dollars” are allocated in a transparent and efficient way. He highlighted that a major goal in implementing the All-Funds plan was to strengthen the fiduciary responsibility of the BOT.
- Knuffman said that while the budget is flexible, tuition for in-state graduate and undergraduate students will not increase next year.
- “It’s too early to know” if the tuition for out-of-state students will change, Knuffman said after the presentation. “We’ll see in the next few months.”
- The BOT is set to review the All-Funds budget in March of 2022 before it is sent to the BOG in May.
- The final portion of the presentation on tuition model reform was condensed for time. It focused on the chancellor’s efforts to increase transparency and stability in tuition allocation.
- Knuffman said the goal is to have a set recommendation for tuition model reform in December — a timeline he called “aspirational.”
- “Fingers crossed we can still meet that timeline,” Knuffman said. “At this point, we are still keeping pace with that schedule.”
