General Budget Questions

• Stony Brook experienced a surplus of funds in FY21, yet in FY22 we’re expecting a deficit. Why?

  We budgeted conservatively for FY21, uncertain of COVID-19's trajectory and impact. Due to receipt of federal aid, additional research activities, and positive contribution from self-sustaining operations, the FY21 actual funding exceeded the budgeted amount. This unanticipated revenue combined with expense decreases resulting from SUNY-imposed expenditure reductions, a pause in hiring, and severely limited non-payroll expenses allowed funding to outpace expenses, leaving a surplus in FY21. The FY22 budget anticipates some of the deferred costs from FY21 will be incurred in FY22, hence the deficit for FY22. Fundamentally, however, we are in much better financial position than we had anticipated.

   

• Are COVID-19-related expenses considered in SBU’s current budget plan for FY22?

  While we have more information this year than when planning for FY21, there are still several unknowns in FY22. To the best we are able, we have developed projections regarding the potential impact COVID-19 will have on this financial year and incorporated those into the budget. The $45 million projected budget deficit in FY22 reflects the university’s current circumstances including the restoration of in-person classes, increased residence hall occupancy and fully operational dining programs. In addition to those included in the budget, certain COVID-19-related expenses are tracked separately to be considered for potential FEMA reimbursement.

• Are there other forces aside from COVID-19 driving the FY22 budget gap?

  Yes. U.S. higher education is experiencing a period of disruptive change, challenging SBU and all universities to think even more strategically about finances. We are more stable financially than we had anticipated during the middle of COVID-19, but while our short-term picture has improved, fundamentally costs continue to rise and there has been no reciprocal increase in either state support or tuition rates. We are optimistic that our designation as a SUNY flagship institution will result in increased support, and confident that the progress made through the Strategic Budget Initiative has put us on a trajectory of reducing costs and increasing revenue.

Funding and Revenue

• How much federal aid did Stony Brook receive in FY21 and FY22?

  Stony Brook received a total of $117 million over fiscal years 2021 and 2022 through the Coronavirus Aid, Relief, and Economic Security Act (CARES) and Higher Education Emergency Relief Fund (HEERF). In FY21, $63 million was received, $20 million of which was distributed directly to students and therefore is not included in our FY21 Operating Actuals. The remaining $43 million is reflected in the FY21 funding charts as “Federal Aid,” and is comprised of $30.5 million in support directed to the dormitory fund and $12.5 million for the hospitals.  In FY22, $54 million was received, including an additional $27 million in direct student aid. 

• Can Stony Brook raise tuition to increase revenue?

  The maximum SUNY tuition increase is set by the Legislature and the actual tuition charged up to this maximum is set by the SUNY Board of Trustees annually. With state funding declining, we need to have more flexibility to set tuition in a way that better supports our goals while protecting our Pell and TAP eligible students. The reality is our current tuition structure is one of the lowest of all AAU schools and of all public research universities in the northeast region.

• Can Stony Brook raise fees to increase revenue?

  Broad based fees for FY22 were submitted and approved in FY21 with modest and carefully considered increases, in line with costs and SUNY Policy #7804 on Fees, Rentals, and Other Charges. All fee increases follow SUNY-level Administration Office of Finance and Business procedures.

• Stony Brook is a prestigious research institution. Why don’t we admit more students to increase revenue?

  Campus revenue is impacted by the composition of domestic and international enrollment, and the pandemic has put pressure on international enrollment across all higher education institutions including Stony Brook. Changing the composition of our classes has broader impacts across the institution in programs and services required which can increase the cost of instruction.

• Why don’t we use the endowment to bridge budget gaps?

  The Stony Brook Foundation, through distribution from the endowment and restricted and non-restricted gifts, is expected to provide $60 million in support in FY22 to operations, which is a tremendous resource. That said, there is a common misconception that the endowment is a savings account which the university can use as needed. In fact, all but 2.5% of the endowment is restricted, meaning the financial gifts have been designated by donors for a specific purpose, whether a scholarship, a building, an academic program, or other priority. Additionally, endowments are designed to keep the principal amount intact while expending only the investment income. There are stringent policies and statutes governing 501(c)(3) foundations that restrict both amount and usage of foundation holdings.

• Why aren’t fringe benefits included in the funding charts?

  Fringe benefits for which the University bears the cost are included as expenses (IFR, SUTRA, Dormitory, Hospital, etc.), but neither the revenue nor the expense for State-funded fringe are shown.  State-funded fringe benefits are a significant component of New York State’s support for higher education.  However, since SBU does not receive the funds or control their use, they are not reflected as part of the operating budget presentation.  

Categories and Terminology

• What are “changes in reporting methodology?”

  As Stony Brook moves toward a more strategic all-funds budgeting process, we’ve committed to recording and analyzing budget data with more specificity, creating consistency across the institution and reflecting funds on a full budgetary basis. For instance, one of the most common methodology changes seen in the FY21 actuals is from net to gross funds, which better reflect how university departments manage their budgets. These changes are being implemented gradually across the organization, so we expect to see some variances in year-to-year comparisons.

• Why can’t we raise fees to increase revenue?

  Broad based fess for FY20/21 were submitted and approved in FY19/20 with modest and carefully considered increases, in line with costs and SUNY Policy #7804 on Fees, Rentals, and Other Charges. All fee increases need to follow SUNY-level Administration Office of Finance and Business procedures.

• What is the Faculty Student Association?

  The Faculty Student Association (FSA) at Stony Brook University is a not-for-profit 501(c)3 auxiliary services corporation licensed by the State University of New York. FSA provides more than 25 services that contribute to the quality of campus life in a flexible, efficient, and responsive manner to support the mission of the Stony Brook campus. FSA holds the contracts for food service, bookstore, campus vending machines, laundry services, and other key support services.

• What is the Stony Brook Foundation?

  The Stony Brook Foundation and the Office of University Advancement partner in raising funds to support the mission of the university.

• What are IFR and SUTRA accounts?

  Income Fund Reimbursable (IFR) accounts are self-supporting accounts that support activities related to campus missions. These types of accounts have clear and defined income/expenditure relationships. Each IFR account must generate revenue sufficient to cover costs incurred and maintain a positive cash balance.

  State University Tuition Reimbursable Account (SUTRA) is a type of IFR account. These accounts were established to provide State University the ability to retain a limited amount of tuition revenue generated in excess of targeted levels and create entrepreneurial incentives for campuses to expand enrollment and programs.

• What does self-sustaining operations mean?

  “Self-sustaining operations” refers to things like student housing, dining, or transportation, as well as certain tuition-related activities like summer term and winter term tuitions. Essentially, they are areas of university operations that are funded by the fees assessed by those who use them.

• What are “contractual services?”

  For Academic and Research activities, this includes contracted custodial service, grounds maintenance and maintenance of essential infrastructure like the high temperature hot water distribution system. It also includes contracts with the FSA for catering and research-funded subcontracts. For Hospitals & Clinics, this category includes custodial and grounds services as well as medical services, laundry & linen, and collections.

• What is the difference between Sponsored Research, Other Research Activities, and Research Investment Income?

  Sponsored Research reflects externally funded projects and includes both the direct and indirect costs of awards.  Other Research Activities reflect budgeted expenditure of Indirect Cost funds, staffing agreements managed by the Research Foundation, and royalty activities among other things. The Research Investment Income expected in FY22 represents a non-recurring return on investment that will be disbursed and available for expenditure.

• Why hasn’t Other Research Fund Activities appeared in previous budgets?

  As we work to create more consistency across budgets and reporting, the university has opted to report all funds for the Research Foundation, including those outside of sponsored research. This year we began to include the Other RF Activities, breaking it out separately from sponsored research.

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