Administration and Finance
Sustainable and effective allocation of public resources is an obligation Memorial takes very seriously. Memorial's priorities include:
- effectively planning, allocating and managing its budget to achieve its strategic goals and objectives;
- providing for accountability, transparency, and good stewardship; and
- ensuring the university is operating in accordance with the requirements of the Memorial University Act.
How is Memorial University funded?
Memorial’s consolidated statement of operations for 2018-19 (audit in progress) indicates total revenue of $618,734,000. This includes research, ancillary, plant, special purpose and trust funds (including endowments) as well as operating funds. Research, ancillary enterprises (such as the bookstores and student residences) and plant (capital/building expenditures) funds are often restricted in nature, meaning that the university is obligated to follow specific conditions for expenditures. For a detailed explanation of Memorial’s funds and their purposes, please click here.
The university’s operating budget is used to fund the university’s core operations. The Government of Newfoundland and Labrador provides an annual grant that represents the most significant portion of Memorial’s operating budget. In 2019-20 that grant was approximately 83 per cent of the university’s operating revenue. Other sources of operating revenue include the Government of Canada Research Support Fund (meant to offset the indirect costs incurred in the operating fund in support of federally funded research), tuition and student fees.
At many Canadian universities, tuition is a significant source of revenue and increases are implemented on a regular basis.
Since 1999, the provincial government has supported a tuition freeze for students by providing a grant in aid of tuition. In 2018, the freeze was maintained for students from Newfoundland and Labrador, while tuition for Canadian and international students increased. In 2019-20, the province earmarked $4 million for the grant in aid of tuition. At the same time, the base operating grant for Memorial (excluding Medicine) was reduced by $5.6 million ($2.6 million reduction was announced in 2016-17 and $3 million announced in 2017-18).
Cumulatively, the grant-in-aid of tuition has increased by $33.3 million between 2012-13 and 2019-20, while the base operating funding has decreased by $42 million.
In 2004, the provincial government called for an independent review of the public post-secondary education system in Newfoundland and Labrador. The goal of the review was to identify initiatives to enhance the system's contributions to the economic growth of the province and employment prospects of graduates, while preserving quality, accessibility and affordability. It found that Memorial was underfunded and required additional investment to accomplish its mandate and meet the needs of students.
The subsequent white paper on the findings of the review, Foundation for Success: White Paper on Public Post-Secondary Education (2005), noted the need for "adequate and stable funding" and committed to increasing the provincial operating grant. It also identified specific initatives, such as expanded distance education and increased participation of women in engineering, applied science and technology. These recommendations were supported by an overall investment of $72.6 million in Memorial.
Selected initiatives funded through white paper allocations
- Governance at Grenfell Campus (then Sir Wilfred Grenfell College)
- Grenfell Campus programming
- Expansion of distance education programming
- Funding increase to address operating needs
- Funding to maintain a tuition freeze for three years
- Funding for Industrial Research and Innovation Fund (IRIF)
In addition to white paper funding, from 2010-11 to 2014-15, the provincial government had a strategic initiatives fund that allowed Memorial to apply for funding in aid of key priorities. Memorial received funding for initiatives such as expansion of the Faculty of Engineering and Applied Science, Marine Institute expansion and Indigenous programming.
By legislation, the university is required to maintain a balanced budget. In 2019-20, operating revenues and expenditures balanced at $374,404,260. The provincial government grant was approximately 82 per cent of this total, or $308.35M. This operating budget, funded by the provincial government, includes the St. John’s, Grenfell, Marine Institute and Harlow campuses, as well as the Labrador Institute. However, this budget excludes the Faculty of Medicine. The Faculty of Medicine is funded separately through the Department of Health and Community Services. Many faculty members employed by the Faculty of Medicine are also cross-appointed as specialists in the provincial health care system. The policy governing the university operating budget is available online.
From 2012-13 to 2019-20, Memorial University faced operating budget cuts totalling $39.49 million. At the same time, the annual capital budget allocation for deferred maintenance of $10 million was completely eliminated. This reduction has significantly impacted all areas of the institution and required that the university reduce spending and identify efficiencies.
While managing the impact of these budget cuts, the university’s priority has been to protect the quality and integrity of programs, maintain Memorial’s special obligation to the province and ensure a continued high-quality student experience.
The accumulated cuts represent 11.6 per cent of the total 2019-20 operating budget. The $39 million in budget reductions have been achieved through two main activities: applying cuts to unit base budgets and the government-mandated attrition plan.
While tuition revenue generation is constrained due to the provincial government’s tuition freeze policy, the university is also challenged by a significant proportion – almost 80 per cent – of the operating budget being committed to salary and benefits. In 2019-20 the salary and benefit portion of the budget was reduced by $8.72 million. Click here for more details on HR expenses at Memorial. The below chart outlines the university’s operating budget expenditures for 2019-20.
Inflation and exchange rates
Memorial incurs inflation on unavoidable costs such as energy, insurance, snow clearing, municipal grants and taxes, maintenance contracts, and IT software and hardware systems. These increased annual expenses require reallocation within the existing budget envelope. Since 2005, the provincial rate of inflation has increased by 28 per cent.
Many important assets, such as library holdings, are purchased in United States dollars (USD). The decline in the value of the Canadian dollar relative to the USD in recent years has had a direct, negative impact on Memorial.
Memorial takes a focused and strategic approach to manage these unavoidable expenses and find cost-savings. Through Energy Performance Contracts with Honeywell, Memorial is able to create energy savings and positive environmental impacts through upgrades and retrofitting. The projects, which impact facilities on the St. John’s and Grenfell campuses, are entirely self-funded. The current project will result in a guaranteed cumulative cost savings to the university over the 20-year term of almost $53 million. Already it has reduced greenhouse gas emissions by 3,860 tonnes per year -- equivalent to removing nearly 1,300 cars from the road annually.
The Memorial University Pension Plan
The Memorial University Pension Plan is a defined benefit pension plan that provides retirement pensions to full-time permanent employees and qualifying contractual employees of the university. At its most recent measurement date, March 31, 2019, there were 3,643 active members contributing to the plan and 2,362 retirees and survivor beneficiaries receiving monthly pensions. The number of active members decreased by 264 people or 6.75 per cent over the last five years and the number of retirees increased by 31.4 per cent (566 people).
The plan is approximately 90 per cent funded, owing in large part to the performance of the pension fund which, over the longer term, has consistently outperformed both its benchmark and peer comparator funds.
The university is currently working with its employee groups on pension reform measures that are expected to address the unfunded liability and culminate in a joint sharing of responsibility for the plan and its governance, the aim of which is to ensure the plan’s ongoing sustainability. The plan’s financial statements are audited annually by an external firm and provide a fair representation of the plan’s financial operations and net assets available for benefits at the end of each year. More information on the plan can be found in its Annual Report.
Operating budget preparation and consultation process
The provost and vice-president (academic) is responsible for overseeing the preparation of the university’s operating budget. This authority is exercised in conjunction with Vice-Presidents Council and subject to approval by the president.
Memorial’s budget planning is informed by a lengthy consultation process that includes Senate, the Planning and Budget Committee of Senate, the Integrated Planning Committee, student unions, deans and directors of academic and administrative units and general stakeholders in the university community. The budget receives final approval from the Board of Regents. Updates on the budget process are shared with the university community online.
Audited financial statements
Memorial prepares consolidated financial statements each year in accordance with Canadian public sector accounting standards. These statements are audited by an independent chartered accounting firm and every year have been found to represent the financial position of the university fairly and accurately. Financial statements back to 1996 are published online.
Memorial employs people in a wide variety of positions and at all stages of their careers. In 2019-20, approximately 57 per cent of Memorial’s salary expenditure was allocated to academic staff, while 43 per cent was for administrative staff (this calculation includes the Faculty of Medicine). This ratio aligns with other Canadian universities.
Approximately 60 per cent of positions are unionized and employment terms are set under one of the 12 collective agreements between Memorial and its unions. More information on Memorial’s HR complement is available online.
Memorial is committed to providing fair and equitable pay to employees. The ranges for various groups of employees are reviewed regularly by Human Resources and any adjustments are subject to approval by the Board of Regents.
Salary increases at Memorial are expected to follow the template set by the provincial government in its collective bargaining process. The impact of template increases is such that the proportion of the budget allocated to salaries has increased substantially since 2008, when the 8 per cent, 4 per cent, 4 per cent, 4 per cent wage increase was implemented. While the province provides an incremental budget for collective agreement general wage increases, annual step increases for employees are now funded from within the university’s existing budget allocation.
In 2016-17, the provincial government mandated Memorial to meet a $6-million salary attrition target by 2018-19. The university met this target and 78 positions have been eliminated. Functional capacity is reduced, and operations have been adjusted.
In May 2018 Memorial announced a Voluntary Retirement Program. This one-time program allowed 69 employees to retire, at a cost savings of $10.8 million for the first year. $4.8 million of this will be directed towards the hiring of new faculty.
Other related information
- Workforce sustainability: Employee demographics (incl. Total employees, Avg length of service at MUN, Avg length of service in current position, Avg age, Employee group, position type)
- Finance: Budget Reductions (incl. by Year, by Portfolio) and Financial Ratios (incl. Net Income/Loss Ratio, Viability Ratio
- Information stewardship: Access to Information (incl. number of requests by year, type of applicant, outcome, number of pages, number of OIPC reviews)
- Safety Culture: Incident rates (incl. Total Safety Related Incidents, Total alerts, Incident by type) and injury rates (incl. Recordable Injuries, Lost Time Injuries)
- Network Connectivity: Wireless (incl. Wireless Users and Devices, Fac/staff Users, Student Users)