Linda Wagner, Vice President for Finance and Administration
Gannon University completed Fiscal Year 2015 with a strong financial performance. Net assets increased by $8.8 million. The increase in net assets from operating activities totaled approximately $4.8 million and $4 million from non-operating activities. Approximately $200,000 of the non-operating increase in net assets was due to positive endowment performance. Another $3.7 million was due to non-operating contributions to the endowment. Net tuition and fees increased by approximately $2.5 million, or four percent, over the prior year. The largest driver was an increase in full-time undergraduate enrollment.
The University has been making strategic investments to drive enrollment growth. Fall 2014 enrollment totaled 4,410 students, which included an increase of almost 200 students over the prior year, resulting in a 23-year record-high enrollment. These numbers included 246 new international students from 29 different countries. Auxiliary enterprise revenue grew by approximately $717,000 or 6.1 percent over the prior year.
Unrestricted and temporarily restricted contributions totaled approximately $1.4 million, and permanently restricted contributions were $3.7 million, totaling approximately $5.1 million; an increase of $568,000 over the prior year.
Federal, state and private grants totaled $1.6 million. Gannon received new grants from the Society for Academic Emergency Medicine, Pennsylvania Sea Grant, United Way, Erie County Gaming Revenue Authority and several regional foundations.
The total return on the endowment was 3.4 percent. The Endowment Fund grew from $56.1 million at the end of FY14 to $58.2 million by June 30, 2015. This increase of $2.1 million includes both the positive returns as well as gifts to the endowment, net of spending.
Expenses increased by 6.7 percent, or $5.1 million. Compensation increased by approximately $2 million. The compensation pool for faculty and staff was 2.5 percent, which included both salary increases as well as faculty promotions in rank and staff promotions. Operating expenses increased by almost $2.4 million over the prior year. Depreciation rose just slightly by $55,000 to almost $5 million and interest expense increased by $527,000. Additional debt was added for the Recreation and Wellness Center and the addition of the field house. Auxiliary enterprise expenses increased approximately $150,000 over the prior year.
Strategic investments in academic programs in FY15 included the addition of faculty and improvements to facilities. Additional faculty members were added to the mechanical engineering, physician assistant and athletic training programs to support growth in these areas.
An additional campus, located in Ruskin, Florida, was opened this year and the inaugural class of students in the occupational therapy doctorate program began in June of this year. A feasibility study revealed that the area of highest growth in both population and health care demand is along the west coast of Florida. We expect this additional site to be financially feasible, academically successful and strongly aligned with the University’s Mission and reputation.
The Center for Business Ingenuity opened in January in a building located at 900 State St. that was gifted to the University in August 2013. This three-story office building was renovated to create a comprehensive business triad by integrating the Dahlkemper School of Business, the Erie Technology Incubator (ETI) and the Small Business Development Center (SBDC). The Human Performance Center was created in the newly modernized Recreation and Wellness Center to serve as a hub for academics, and includes a motion analysis lab and a human performance testing and training lab.
The University continues to implement the Campus Master Plan and invested in new exterior furniture that includes Gannon-branded benches, tables and trash/recycling receptacles surrounding our buildings. These additions complement the lighting and signage that have been installed over the last few years.
A number of investments were made in FY15 expanding strategic initiatives to assure continued improvement in quality. Some of these included investments in the Student Success Center, Erie-GAINS, Student Development and Engagement, International Enrollment and Student Services, and Wellness.
The Barker Globalization Institute was created this year in an effort to enhance multicultural learning opportunities, and to prepare students, faculty and staff to be competitive, socially responsible world citizens.
An administrative unit and academic program review process continued for the second year in an effort to contain operating costs. Return on investment and payback analyses have been completed for all new programs and initiatives. These will be reassessed annually to assure that targets are being met and that action will be taken as required.
The University will continue to exercise prudent fiscal management, invest in strategic initiatives to sustain and grow the University and allocate financial resources to ensure that students receive the best possible experience both in and out of the classroom.