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October 9, 2014

FY14 revenues up 1% to $2.01 billion

calculator moneyThe Board of Trustees audit committee in a Sept. 29 public session approved the University’s audited financial statements for fiscal year 2014, a year Arthur G. Ramicone, chief financial officer, characterized as a solid one for the University.

Operating revenues

The University’s operating revenues rose 1 percent to $2.01 billion, up from $1.99 billion at the end of FY13.

Grants and contracts, the University’s largest revenue source, fell to $697.58 million, down $61.82 million, or 8.14 percent from $759.39 million in FY13. About 61 percent of Pitt’s sponsored activity comes through the National Institutes of Health (NIH).

Included in the FY14 grant total was $4.05 million awarded through the American Recovery and Investment Act of 2009, the final remnants of ARRA economic stimulus funding, which will fall to “virtually zero” in, Ramicone told the University Times. Pitt received $20.89 million in ARRA funds in FY13.

Grants and contracts not associated with ARRA funding totaled $693.5 million, down $38.5 million from FY13.

Much of the decrease was expected, due to the federal sequestration, which in 2013 cut 5 percent from NIH’s budget, and the decline in ARRA funding, Ramicone said.

Net tuition and fees, Pitt’s second-largest revenue stream, rose 2.88 percent to $561.44 million, up from $545.7 million.

The University’s appropriation from the state rose to $147.8 million, up $3.49 million or 2.42 percent from $144.3 million in FY13.

The state’s funding for Pitt capital projects was $40.4 million, down from $44 million in 2013.

Operating expenses

Pitt’s operating expenses held steady at $1.88 billion in FY14.

The University pared back its largest operating expense, compensation, for the second consecutive year. The reduction, Ramicone said, was predominantly due to a reduction in headcount.

About 60 cents of every dollar of research funding is related to compensation, Ramicone said, explaining the loss of research money resulted in a reduced headcount.

Total compensation (salaries and wages and fringe benefits) fell to $1.12 billion from $1.13 billion in FY13. (Total compensation in FY13 was $3.32 million less — 0.7 percent — than in FY12.)

The FY14 savings of $10.51 million (0.93 percent) included more than $8.94 million in reduced benefits expenses and more than $1.57 million less in salaries and wages.

Salaries and wages totaled $866.18 million in FY14, down 0.18 percent from $867.75 million; fringe benefits dropped to $255.28 million, down 3.38 percent from $264.22 million.

Ramicone said the lower fringe benefits cost was the result of both a lower headcount and a reduction in medical claims.

Endowment grows

The University’s endowment rose to more than $3.5 billion, with its net assets up $520.22 million from the fiscal 2013 year-end.

Endowment investment returns were “excellent,” up 17.9 percent, Ramicone said.

The endowment’s total return was nearly $544.7 million, made up of $34.69 million in endowment earnings plus $510.01 million in gains.

Endowment distributions per share rose 5.3 percent, he said.


In other business, the audit committee approved KPMG LLP as Pitt’s independent auditor and tax adviser for fiscal year 2015. The firm has held that role at Pitt since 2010.

—Kimberly K. Barlow

Filed under: Feature,Volume 47 Issue 4