University Budget Shows Small Operating Surplus

The University posted a $1 million operating surplus for the fiscal year 1978-1979, the fourth surplus in a row.

The Corporation's annual financial report, released during Christmas vacation, also notes that the value of the University's endowment rose to $1.31 billion from $1.21 billion in 1978.

The University financial performance last year followed the stable trend of the past several years. Thomas O'Brien, financial vice president, said yesterday. He added that the surplus represents only .3 per cent of the University's $343 million budget.

The only part of the University reporting a deficit was the School of Public Health. Its $400,000 deficit was a "planned transition" made necessary because the Federal government has reduced the rate at which it repays overhead costs on research contracts, O'Brien said. The School of Public Health draws over half its income from the government.

O'Brien said this year's University budget will probably resemble last year's. "The weather right now is so good that if it keeps up like this, we'll be within the zero to $1 million surplus range this year," he added.

The endowment's $104 million rise in market value followed a $16.9 million drop the previous year. "However, the endowment is up only 8.6 per cent in a year in which the Consumer Price Index increased by 11.3 per cent. You may draw your own conclusions," George Putnam, University treasurer, said last month.

The financial report states that the failure of the endowment to keep up with inflation imperils the different schools' ability to introduce new programs and innovations. This trend forces schools to rely on their unrestricted income--money they may use as they wish--to pay for basics like salaries instead of new programs, O'Brien said.

The report concludes that "To ensure that funds are always available to support originality and creativity, the endowment must be increased by a major amount," the goal of the University's $250 million fund-raising venture, the Harvard Campaign, launched in October.

"In the University's largest department, the Faculty of Arts and Sciences, the pressure from decreased endowment is met in several ways--through reduction in programs, through higher-than-desirable fees, and through lower-than-desirable salaries," the report states.

Robert Kaufmann '62, associate dean of the Faculty for finance and administration, said last month tuition, room and board costs for next year's undergraduates will list at least 9 per cent. The Corporation will approve exact figures this month.

Total gifts to the University rose to $70 million, up from $63.5 million the previous year, the financial report indicated.