George Mason UniversityBoard of Visitors | Finance & Land Use CommitteeOffice of the Senior Vice President | May 5, 2016

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AGENDA

I. Call to Order

II. Approval of Minutes

III. University Operating Budget, Tuition and Fees

IV. Closed Session – Public Contract (Code of VA: §2.2-3711.A.29)

V. New BusinessA. University Controller Review and APA Audit of

Financial Statements for Year Ended June 30, 2015 B. Higher Education Autonomy

VI. Adjournment

NEW PICTURE HERE

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George Mason University is Virginia’s Largest Public Research University

MASON AT A GLANCE

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MASON ON THE WIRE

150 Under 50 Rankings 2016

The Times Higher Education 150 Under 50 Rankings 2016 is a ranking of the top 150 universities under 50 years old.

It celebrates young universities that have made a great impact on the global stage in years rather than centuries and showcases the future rising university stars.

George Mason University ranked 59

George Mason University English professor and poet Sally Keith has landed the prestigious John Simon Guggenheim Memorial Foundation Fellowship.

Guggenheim Fellowships are typically awarded at midcareer to those who have already demonstrated “exceptional creative ability in the arts.”

Sally Keith. Photo by Ron Aira

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Northern Virginia Washington Metro Area

Commonwealth of Virginia The Nation The World

FAST FACTS (2015 – 2016)

Enrollment ~ 34,00081% Virginia residents57% receive financial aid69% of first-time freshmen live on campus26% of undergrads live on campus6,502 employees on 3 campuses2,634 teaching & research faculty

MASON SERVES

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STUDENT PROFILE: WHO WE ARE, WHO WE SERVE

George Mason University is Virginia’s Largest Public Research University

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STUDENT PROFILE

FY 2016 Enrolled Student Population by Headcount: 33,925

68%

32%

Undergraduate Graduate

67%

33%

Full Time Part Time

81%

19%

In State Out of State

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UNDERGRADUATE STUDENT PROFILE

FY 2016 Undergraduate Student Population by Headcount: 23,062

49%51%

Underrepresented Racial/Ethnic Other

35%

65%

First Generation Other

13%

87%

Over Age 25 at Entry Other

George Mason University serves an incredibly diverse population with a broad array of needs which require investment.

1 in 3 1 in 2 1 in 8

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STUDENT SUCCESS NO DISPARITY IN OUTCOMES!

COMMITTED TO EXCELLENCE

Graduation Gaps: Nationally, 60% of white students but only 49% of Latino students and 40% of African American students who start college hold bachelor degrees 6 years later.

In public institutions, white student graduation rates surpass those of Hispanics on average by 14.9%

Mason – No Disparity

In public institutions, white student graduation rates surpass those of African Americans on average by 16.2%

Mason – No Disparity

Source: The Education Trust, 2010

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PELL GRANT GRADUATION OUTCOMES

George Mason University named a Standout Institution for Graduation of Pell Students!

One of Thirty-Six Institutions named that have:

Pell Graduation Rates that are 10 percentage points above the average rate of their peers

Pell Grant graduation rates at or above the national Pellgraduation rate (50 percent)

Completion gaps between Pell and non-Pell recipients ator below 3 percentage points

Source: The Education Trust The Pell Partnership, Sept 2015 (College Results Online)

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INVESTING IN THE FUTURE

Mason Transfer Students ROI is even better!

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Student Financial Aid profile

Sources of Financial Aid FY 2015

Federal $194.8M

State $17.8

Institutional $33.0

Private (Philanthropic) $27.7

Total $273.3M

Increase in Financial Aid FY 2016

State & Institutional $7.0M

Expected Increase in Financial Aid FY 2017

State & Institutional $4.2M

Two Year Increase = $11.2M

INVESTMENT IN ACCESS AND AFFORDABILITY

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THE WORLD IS CHANGING

George Mason University is Virginia’s Largest Public Research University

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Mason needs to make investments to attract and retain students.

The World Is Changing Rapidly

Improving the Student Experience Initiative

Exploring Partners for Online Graduate Degrees

Increasing Demand for Student Services

Commitment to Diversity and Inclusion

Support Stay Mason

Increase Undergraduate and Graduate Financial Aid

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REVENUES

FINANCIAL FRAMEWORK

NET RESOURCES

Tuition & Fees

Retention & Enrollment Mix

Philanthropy

State Appropriations

New Programs

Physical PlantCapital Infrastructure

Operating and Capital Reserves

Mandatory Cost Increases and

Regulatory Environment

Academic & Administrative

Enterprise

Debt Service

EXPENSES

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Accessible

Affordable

High Quality

Great ROI

MASON IS EFFICIENT AND EFFECTIVE

Diverse Student Body

No Disparity in Outcomes

Tuition and Fees less than most VA doctorals

Lower Core Spending than Peers

Great Return on Investment

Best Student Loan Default Rate in Nation

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67%

28%

33%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

George Mason UniversityGeneral Fund vs. Tuition and Other as a Percent of the Educational and General Budget

State Appropriations Tuition & Other

*State imposed 20% tuition reduction for in-state undergraduate students in FY2000 and rates were held flat through FY2001 and FY2002.** ARRA included in General Fund

67%

33%

1985

57%43%

2000

28%

72%

2017

LONG TERM FINANCIAL SHIFT FROM TAXPAYER TO STUDENT

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MASON IS DOING MORE WITH LESS

Mason is very efficient.

MASON Faculty/Staff to Student 1:8

Doctoral Average 1:5.6

William and Mary 1:3.6

VCU 1:7.1

Mason would need to add over 1,000 people to be comparable with state average.

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THERE ARE INCREASING PRESSURES ON THE INSTITUTION

Two Years Base Budget Cuts

Tuition Sensitivity

Increased Demand for Student Services

Changing Regulatory LandscapeCompensation and other employment cost pressures

Rapid Enrollment Growth

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BALANCED BUDGETRobust Financial and Academic Foundation

FY 2017AffordabilityAccessibilityHigh QualityIncreased state funding

Faculty/Staff/Student pressure for services and compensation

University Strategic PlanStudent Success InitiativesDiversity & InclusionGraduate Enrollment StrategyBudget Model RedesignEnrollment InitiativesFinancial Aid InitiativesResearch

Starting PointFY 2016 Two years of state base budget cuts.

Advocacy for additional state funding.

Changing LandscapeStudent DemographicsMandatory IncreasesMore Competitive Market

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FY 2017 PROPOSED REVENUE BUDGET $1.0B

pie chart in millions

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FY 2017 PROPOSED EXPENSE BUDGET $1.0B

pie chart in millions

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How do we remain affordable, accessible, and provide a high quality education?

Affordability

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Examine the Base: Base Budget Efficiency & Effectiveness Measures

Debt Deauthorization: 3 Year Total $197M

Asset ReutilizationMason Inn Conversion* Historical Loss $12MMason Hall Phase I & II Cost Avoidance $13MScience & Technology Campus

Base Budget Cuts & Reallocation 4 Year Total $24.1M• FY 2013 $4.7M• FY 2014 $2.0M• FY 2015 $9.4M• FY 2016 $8.0M

Future ChallengePension/Healthcare Increases 4 Year Total ~$20M

FY 2

013

-201

6

*Mason Inn conversion with the INTO partnership covers approximately $3.0M debt service annually

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FY 2

016-

18 IN

ITIA

TIVE

S • Budget Model Redesign• Analyze business services to increase

efficiency and minimize cost• Increase Financial Flexibility with the

State• Sustainability Initiatives• Housing Solution• Restructure Debt• Debt Policy• Reserve Policy

• Establish College/School Dashboards• Establish College/School Faculty

Workload Guidelines• Multidisciplinary Research/Education• Platform for Educational Innovation• Institute for Biomedical Innovation• Major clinical partnership(s)• Innovation and Entrepreneurship Center• Online Graduate Program Partnership• Meet Enrollment, Retention and

Completion Goals• Meet Executive Education Revenue Target• Increase Study Abroad and International

Enrollments

Moving Forward

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INVEST IN CRITICAL PROGRAMS & SERVICES, AND STAGE THE RUNWAY FOR FUTURE SUCCESS

Compensation Increases for Faculty

and StaffIncrease Financial Aid

for Undergraduate and Graduate students

Increase services and programs related to

Diversity and InclusionInvest in Student

Enrollment and Access Initiatives

Increase for Critical Student Services,

includes writing center, counseling centerInvest in Research,

includes Institute for Biomedical Innovation

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Forecasting Forward – what if increase tuition more than 3%?

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Board RecommendationThe Finance & Land Use Committee recommends approval by the Board of Visitors of the FY 2017proposed Tuition, Fees, Room and Board increase; and approval of the proposed budget as providedin the (PROPOSED) 2016 - 2017 Executive Budget Summary.

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CLOSED SESSION

30

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UNIVERSITY CONTROLLER REVIEW AND APA AUDIT OF FINANCIAL STATEMENTSJUNE 30, 2015

Auditor of Public Accounts (APA) completing audit for year ended June 30, 2015

Highlights for the year:

The University implemented GASBS 68 – record net pension liability

Prior year ending net position restated downward $204.9 million

Net pension liability at June 30, 2015 is $187.7 million

*The University’s total net position increased $60.3 million, or 14%

Total operating revenues increased by $23.1 million, or 4%

Total operating expenses increased by $14.6 million, or 2%

**Unrestricted net position increased by $25.8 million, or 23%*Compared to restated FY14 total net position (FY15 MD&A Statement of Net Position)

**Compared to restated FY14 unrestricted net position (FY15 MD&A Statement of Net Position)

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Link to the draft unaudited financial statements was provided in December

Subsequent events have been added and some minor cosmetic changes

There are no material weaknesses

There were no changes to the ratios or financial data in the report or inthe information presented in December

Audited report will be made available on the Fiscal Services website

APA presentation of findings and opinion

APA present any new accounting pronouncements affecting FY16

UNIVERSITY CONTROLLER REVIEW AND APA AUDIT OF FINANCIAL STATEMENTSJUNE 30, 2015

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As part of a five-year pilot program, George Mason University is authorized, for a period of five years, to exercise additional financial and administrative authority in three functional areas of information technology, procurement and capital projects

INCREASED UNIVERSITY AUTONOMY

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“Live as if you were to die tomorrow.Learn as if you were to live forever.”--Mahatma Gandhi