Report: UNC Finances Relatively Stable

The committee, made up of BOT members Paul Fulton, Nelson Schwab and Karol Mason, met at the Wilson Library Assembly Room to hear reports about the University's Endowment Fund, its investment funds and the financial structure of the University.

Trustee Jim Hynes was not in attendance.

Private consultant and UNC Endowment Board member Max Chapman, who presented the report on investment funds, said UNC is in the top 5 percent among peer institutions in relative performance.

Even though UNC suffered nominal losses in the last fiscal year, Chapman said, the University fared better than most colleges and universities.

"We relatively lost less money than everyone else," Chapman said. "We're holding our own pretty nicely."

The report also stated that over the past 15 years, UNC's investment funds have expanded significantly.

In 1986, UNC's funds mostly were comprised of stocks and bonds totaling about $130 million.

Ten years later, that figure jumped to $541 million because of an increasingly diverse portfolio, and it increased to $943 million for the 2001-02 fiscal year.

Chapman said UNC's conservative investment approach in diversifying funds among many different assets contributes to a reduction in risk factors.

"We're willing to sacrifice potential to secure stability," he said. "We are all trying to get the best return possible within reasonable risk factors."

Committee members also heard a financial structure report they requested at their September meeting.

Nancy Suttenfield, UNC vice chancellor for finance and administration, presented the report, which contained a brief introduction to new federal Government Accounting Standards Board mandates about financial statement formats and the need to use new terminology.

Associate Vice Chancellor for Finance Roger Patterson said UNC's reports now must be written in a business-style format.

"The goal is to move toward a corporate environment and feel," he said.

"We want to bring public and private institutions more in line with each other."

But Suttenfield said there is a fine line between business and academics.

"Our primary objective as a university is to meet socially desirable needs," Suttenfield said.

"Those needs are education and research, things that are different from for-profit businesses."

The University Editor can be reached at udesk@unc.edu.