University Times

Pitt’s operating revenues grew 2.23 percent in fiscal year 2016, boosted in part by gains in sponsored research.

Total operating revenues for FY16 were nearly $2.11 billion, according to the University’s consolidated financial statements for the year ending June 30, 2016.

The audited financial statements were approved by the Board of Trustees audit committee Sept. 22 in a brief public session.

According to the financial statements, grants and research contracts rose to $726.53 million, up 1.77 percent from FY15 and exceeding an anticipated 1 percent increase.

About two-thirds of the funding came through the National Institutes of Health, according to the University’s FY16 financial report.

Net tuition and fees rose to $588.09 million, up $7.45 million, or 1.28 percent.

Operating expenses

Compensation, Pitt’s largest operating expense, rose to $1.18 billion, up 2.38 percent from $1.15 billion in FY15. The line item included $906.49 million in salaries and wages, up 2.58 percent from the prior year, and $273.65 million in benefits, up 1.73 percent.

Some expenses fell during FY16, among them utility costs, which decreased by $2.3 million. The savings came largely through locking in favorable electric and gas rates, Arthur G. Ramicone, senior vice chancellor and chief financial officer, told the University Times.

Endowment performance

Pitt’s endowment assets ended fiscal year 2016 at $3.53 billion, down 1.8 percent from the prior year.

The endowment showed a negative return of 2.3 percent, predominantly due to double-digit declines in international equities performance, said Ramicone.

“We have an oversized bet on the emerging markets in the asset allocation,” he said, adding that the University’s asset allocation “is pretty close to our peers, within a couple percent in all the asset classes.”

Current asset allocation policy (see June 25, 2015, University Times), set by the board’s investment committee in consultation with investment staff, aims for 37 percent of the University’s endowment to be invested in equities: 16 percent domestic; 11 percent international; and 10 percent emerging markets.

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In other business, the audit committee approved KPMG LLP as Pitt’s independent auditor and tax adviser for FY17. The firm has held that role at Pitt since 2010.

—Kimberly K. Barlow