University Park, Pa. — Though Penn State felt some of the downturn in financial markets in 2008 directly, the University's commitment to conservative fiscal practices and diversified assets has it well-positioned to weather the nation's current economic turmoil, according to a report presented Friday (Nov. 21) to Penn State's Board of Trustees.
Despite the fact that some of the most negative markets in decades impacted the University's balance sheet, Joseph Doncsecz, University corporate controller, said Penn State can comfortably meet operating needs through the difficult conditions as it has always maintained adequate working capital.
Doncsecz presented the findings of the annual independent financial statement audit done by Deloitte & Touche LLP at the board's regular meeting. Deloitte & Touche issued an unqualified opinion based on their audit.
For the fiscal year 2007-08, total revenues experienced a slight decline, with investment losses responsible for the drop. Excluding investments, Doncsecz explained, operating revenues actually increased by 7 percent, fueled by tuition, hospital operations and grants and contracts. Tuition accounts for 31 percent of total revenue, with hospital revenues at 24 percent and government grants and contracts at 15 percent. Expenses grew in line with revenue, as instruction, hospital operations and research comprised 70 percent of total expenses.
"We operate within a balanced budget and the stability in our financial statements reflects sound management and accounting practices," Doncsecz said.