financial report of ontario universities...2017-18 cofo report highlights council of ontario...

Financial Report of Ontario Universities

2017-18 Highlights

Council of Ontario Finance Officers

March 2019

2017-18 COFO Report Highlights

Council of Ontario Universities Page | 1

Table of Contents Introduction .............................................................................................................................. 2

Revenue by Source (all funds) ................................................................................................ 3

Figure 1: Total Revenue by Source (all funds) – ($ millions) ................................................... 3

Revenue by Funding ................................................................................................................ 4

Figure 2: Total Revenue by Fund – ($millions) ....................................................................... 4

Operating Revenue .................................................................................................................. 5

Figure 3: Operating Revenue by Source – ($ millions) ............................................................ 5

Functional Areas – Operating Fund ........................................................................................ 6

Figure 4: Operating Fund Expenses by Functional Area* - ($ millions) ................................... 6

Operating Fund Expenses by Object of Expense .................................................................. 7

Figure 5: Operating Fund Expenses by Object of Expense* - ($ millions) ............................... 7

Sponsored Research Revenue ............................................................................................... 8

Figure 6: Sponsored Research Revenue by Source – ($ millions) .......................................... 8

Enrolment ................................................................................................................................. 9

Figure 7: Undergraduate Enrolment (FTE) ............................................................................. 9

Figure 8: Graduate Enrolment (FTE) ...................................................................................... 9

Enrolment by Region ..............................................................................................................10

Figure 9: Enrolment by Region (FTE) – (thousands) ..............................................................10



Introduction

The COFO Financial Report of Ontario Universities (the report) is prepared under the guidance of the Council of Ontario Finance Officers (COFO). The tables included in the report have been compiled from submissions prepared by each of the publicly assisted universities, and their federated and affiliated institutions. These submissions follow the COFO Reporting Guidelines (the guidelines) that outline standards to present financial information in a comparative and consistent manner. The financial information is prepared by major fund groups: operating, ancillary, sponsored research, trust, capital and endowment.

It is recommended that the report be reviewed in conjunction with the guidelines, including caveats and this COFO highlights document. The report and the guidelines can be downloaded from the Council of Ontario Universities (COU) website at https://ontariosuniversities.ca/resources/data/cofo.

The information presented here is at the system level (it covers all universities and their federated and affiliated institutions), and presents comparative high-level data in the following key areas: revenue sources, expenditure patterns, sponsored research revenue and enrolment. Comparative data cover the last two or five years, depending on the graph, and the commentary is intended to add context to the data.

Note: The term “fund” in this document does not mean a particular type of revenue. Instead, it refers to a grouping of activities, as referred to in Fund Accounting. For a list of funds, please see page 3.

http://cou.on.ca/numbers/cofo/financial-reports-highlights/




Revenue by Source (all funds)

Figure 1 outlines total revenue by source in actual dollars, and as a percentage of total revenue. The largest sources of revenue over five years (2013-14 to 2017-18) were Grants and Contracts, and Tuition and Miscellaneous Fees, which together account for 84 per cent of the total revenue in 2017-2018.

Grants and Contracts, which account for an average of 45 per cent of the total revenue from 2013-14 to 2017-18, consist primarily of operating grants from the Ministry of Training, Colleges and Universities and from federal, provincial and other research grants, as well as various research contracts.

Investment Income as a percentage of total revenue declined to 4 per cent for 2017-18, compared to a high of 9 per cent in 2016-17. This was primarily due to lower returns in financial markets in 2018. Donations from individuals, corporations and foundations remained relatively constant at 4 per cent to 5 per cent of the total revenue over the five years. Other Revenue, which includes primarily external sales of goods and services and application fees, increased to 8 per cent of total revenue in 2017-18.

Figure 1: Total Revenue by Source (all funds) – ($ millions)

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

46% 45% 47%

43% 44%

35%37%

40%

38%

40%

8% 7%

0%

9%

4%4% 4%

5% 4% 4%

8% 7% 8% 7%8%

Grants and Contracts Tuition and Miscellaneous FeesInvestment Income DonationsOther Revenue



Revenue by Funding

Figure 2 shows both the revenue received by fund and its percentage of the total revenue over five years (2013-14 to 2017-18). The figure reflects different types of funds:

The Operating Fund includes student tuition fees, operating grants and other general unrestricted revenue.

The Ancillary Fund accounts for revenues generated by operations such as bookstores, food services, residences and parking.

The Trust Fund accounts for expendable designated gifts, benefactions, grants and interest earned on non-expendable gifts, which must be spent in accordance with specific instructions by the donors or by internal restriction by the university’s governing body.

The Capital Fund includes grants, donations and other funds made available to the university by external funding sources (such as government and donors), specifically for capital purposes.

The Sponsored Research Fund includes government, private industry and donor funding provided specifically for sponsored research.

The Endowment Fund accounts for the capitalization of externally or internally restricted gifts which cannot be spent.

Figure 2: Total Revenue by Fund – ($millions)

-$2,000

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

62%63% 67%

62%65%

7% 7%7% 7%

7%

5% 4% 4% 4%4%4% 3% 4% 4%

5%

19% 18% 19%18% 18%

4% 5%-1%

5%2%

Operating Ancillary Trust Capital Sponsored Research Endowment



Operating Revenue

Figure 3 presents the major sources of revenue accounted for in the Operating Fund in actual dollars and as a percentage of the total revenue over five years (2013-14 to 2017-18). The two largest sources, accounting for an average of 95 per cent of the total, are operating grants from MTCU and tuition fee revenue. Operating grants increased in dollar terms over the five-year period, primarily because operating grants are determined on the basis of enrolment. Despite continued annual significant increases in enrolment (both undergraduate and graduate), operating grants continue to decline relative to other sources of revenue.

Tuition fees for domestic students attending Ontario publicly assisted universities are regulated by MTCU’s tuition framework. Under the framework for 2013-14 to 2017-18, tuition fees were permitted to increase by an overall average of 3 per cent per year, with variations in allowable increases for different types of programs and for students in different years of

their programs.1 Tuition fee revenue increased in dollar terms and as a percentage of the total revenue over the five years, mainly as a result of enrolment growth and related fee increases during that period. On a relative basis universities are relying more and more over time on tuition revenue versus government grants. Other revenue represents 6 per cent or less of the total revenue, and includes investment income and other miscellaneous items, such as application fees.

Figure 3: Operating Revenue by Source – ($ millions)

1 Ontario’s tuition framework from 2013-14 to 2017-18 allowed tuition rate increase of 3% for students

in most undergraduate programs, 5% increase for entering students in professional and graduate programs, and 4% increase for professional and graduate students who started their studies under the previous framework until their graduation. The average of these rate increases, weighted by enrolment in programs, could not exceed 3%. This tuition framework has been revised starting 2018-

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

42% 41%40% 38% 37%

52%54%

56%

57%

58%

6% 5% 4%5% 5%

Grants and Contracts Tuition and Miscellaneous Fees Other Revenue



19.

Functional Areas – Operating Fund

Figure 4 outlines expenses by major functional areas reported in the Operating Fund. The information is presented in both dollars and percentages for a two-year period (2016-17 and 2017-18). In 2017-18, 58 per cent of expenses in the Operating Fund were incurred on Instruction and Research. The majority of these funds were allocated directly to the academic units for the pursuit of teaching and research. All other functional areas supported the infrastructure necessary to advance the academic mission of Ontario universities. The amount of spending in the Physical Plant area demonstrates the significant investment requirements to support and maintain campus buildings, grounds and utilities. However, provincial funding did not meet generally recognized benchmarks for investments in capital maintenance. As outlined in the Ontario Universities’ Facilities Condition Assessment Program June 2015, the generally accepted minimum industry standard of re-investment in building renewal is 1.5% of the Current Replacement Value (CRV). By comparison, the funding level under the provincial government’s Facilities Renewal Program from 2010-11 to 2014-15 was $17.3 million annually representing 0.10 per cent of CRV. In 2017-18, the funding level increased to $40.0 million per year, which represents 0.17 per cent of CRV. The major components of expenditures incurred in Student Services were scholarships and bursaries. For a more detailed explanation of each functional area, please refer to the COFO Reporting Guidelines at https://ontariosuniversities.ca/resources/data/cofo.

Figure 4: Operating Fund Expenses by Functional Area* - ($ millions)

Total Operating expenses for 2017-18 were $9,572 (Total for 2016-17: $9,073)

(*figures in brackets are from 2016-17)

Instruction and Research, $5,538, 58% ($5,356, 59%)

Academic Support, $545, 6% ($521,

6%)

Library, $368, 4% ($368, 4%)

Student Services, $1,215, 13%

($1,108, 12%)

Central Computing and

Communications, $279, 3% ($268,

3% )

Administration and General, $478, 5%

($441, 5%)

Physical Plant, $924, 10% ($798,

9%)

External Relations, $225, 2% ($213,

2%)

https://cou.ca/reports/ontario-universities-facilities-condition-assessment-program-as-of-june-2015/

https://cou.ca/reports/ontario-universities-facilities-condition-assessment-program-as-of-june-2015/




Operating Fund Expenses by Object of Expense

Figure 5 outlines expenses by object of expense reported in the Operating Fund. The data is presented in both dollars and percentages for a two-year period (2016-17 and 2017-18). In 2017-2018, 75 per cent of total operating fund expenses covered faculty and staff salaries (Salaries and Wages) and benefits (Employee Benefits). This proportion of expenses on salaries and wages, and benefits, reflects the knowledge-based nature of universities. The amount of operating dollars expended in each category remained relatively constant from year to year. For details on specific expenses included in each object area presented here, please refer to the COFO Reporting Guidelines https://ontariosuniversities.ca/resources/data/cofo.

Figure 5: Operating Fund Expenses by Object of Expense* - ($ millions)

Total Operating expenses for 2017-18 were $9,572 (Total for 2016-17: $9,073)

(*figures in brackets are from 2016-17)

Salaries and Wages, $5,775, 60% ($5,556,

61%)

Employee Benefits, $1,397, 15%

($1,333, 15%)

Library Acquisitions, $166,

2% ($163, 2%)

Scholarships & Bursaries, $672, 7% ($608, 7%)

Utilities and Maintenance,

$303, 3% ($321, 4%)

Furniture and Equipment

Purchases, Rental &Mtce, $300, 3%

($306, 3%)

Other Operational Expenses, $958, 10% ($786, 9%)

https://ontariosuniversities.ca/resources/data/cofo



Sponsored Research Revenue

Figure 6 presents the major sources of revenue accounted for in the Sponsored Research Fund in actual dollars, and as a percentage of the total over five years (2013-14 to 2017-18). More than half of all sponsored research is funded from federal and provincial governments. In the past five years provincial funding has decreased by 27 per cent, and in 2017-18 federal funding outweighed provincial funding by almost 5 to 1. For all years, almost half of the sponsored research is funded by the federal government, with a majority of the funding coming from Natural Sciences and Engineering Research Council (NSERC), Canada Foundation for Innovation (CFI) and Canadian Institutes for Health Research (CIHR).

More than one third of sponsored research was funded by non-government agencies making this the second largest source of research funding. In many instances, non-government agencies and governments partner to fund strategic research programs. For a detailed list of federal grants, refer to Table 10 of the COFO Financial Report of Ontario Universities. For a detailed list of provincial grants, refer to Table 12 and 12a of the COFO Financial Report of Ontario Universities.

Figure 6: Sponsored Research Revenue by Source – ($ millions)

45%

45%

47%

47%

50%

9%

11%

12%

12%

13%

36%

36%

33%

32%

28%

10%

8%

8%

9%

9%

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

2017-2018

2016-2017

2015-2016

2014-2015

2013-2014

2017-2018 2016-2017 2015-2016 2014-2015 2013-2014

Federal Government $1,356 $1,322 $1,248 $1,253 $1,316

Provincial Government $271 $331 $325 $331 $343

Non-Government $1,068 $1,070 $896 $843 $750

Other Revenue $299 $246 $214 $225 $233








Enrolment

Figure 7 and 8 present the undergraduate and graduate full-time equivalent (FTE) enrolment data over the five-year period (2013-14 to 2017-18). During this period, undergraduate and graduate FTE enrolment growth was 4 per cent and 14 per cent respectively. Growth in undergraduate enrolments is projected to slow down over the next few years as a result of demographic changes affecting the numbers of young adults in Ontario. Graduate growth over the last five years reflects the priority of Ontario universities to increase graduate enrolment. Graduate enrolment growth contributes highly skilled personnel to Ontario’s labour market; and helps advance research and, in both these ways, improves the province’s competitiveness in a global economy.

Figure 7: Undergraduate Enrolment (FTE)

Figure 8: Graduate Enrolment (FTE)

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2013-2014 2014-2015 2015-2016 2016-2017 2017-2018

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

2013-2014 2014-2015 2015-2016 2016-2017 2017-2018



Enrolment by Region

Figure 9 gives a breakdown of full-time equivalent (FTE) enrolment data by region, and as a percentage of total Ontario. FTE over the five-year period (2013-14 to 2017-18). While enrolment in absolute numbers has increased, the composition of enrolment by region has remained unchanged. The two largest regions are Central Ontario and GTA, accounting for 65 per cent of the total enrolment in Ontario.

Figure 9: Enrolment by Region (FTE) – (thousands)

Institutions by Region

Central Waterloo, McMaster, Guelph, Brock, Laurier, Trent

East Ottawa, Carleton, Queen’s

GTA Toronto, York, Ryerson, UOIT, OCADU

North Lakehead, Laurentian, Nipissing, Algoma,

Southwest Western, Windsor

28%

28%

28%

28%

28%

19%

19%

19%

19%

19%

37%

37%

38%

37%

37%

5%

5%

4%

5%

5%

11%

11%

11%

11%

11%

- 50 100 150 200 250 300 350 400 450 500

2017-2018

2016-2017

2015-2016

2014-2015

2013-2014

Central East GTA North Southwest



For more information, please contact:

Council of Ontario Universities 180 Dundas Street West, Suite 1800 Toronto, Ontario M5G 1Z8 416-979-2165 [email protected]

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