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October 1, 2015

Operating revenue up in FY15

An unexpected increase in grants and contracts has helped boost the University’s operating revenues 2.75 percent.

The University’s fiscal year 2015 financial statements, approved Sept. 24 by the Board of Trustees audit committee, showed operating revenues of $2.06 billion, up from $2.01 billion in FY14.

In a year when grant revenue was expected to fall approximately 6 percent, grants and contracts instead rose to $713.89 million, up 2.3 percent from $697.58 million in FY14.

Arthur G. Ramicone, chief financial officer, told the University Times that the increase was due in part to better-than-expected success in grant proposal awards, in addition to a conscientious effort to pursue sources of research funding from non-National Institutes of Health (NIH) sources, including other government agencies, foundations and private companies.

Approximately 59 percent of the University’s sponsored research funding is awarded through NIH.

Tuition revenues increased 3.8 percent in FY15, rising to $751.77 million before University-awarded discounts of $171.1 million. Net tuition and fees totaled $580.63 million, up 3.42 percent from $561.44 million in FY14.

Other gains in revenue were attributed in part to the completion of renovations at Bruce Hall, which helped raise the auxiliary sales and services line to $146.79 million, up $6.6 million.

In addition, the line item for educational and other sales and services rose $23.44 million, to $185.22 million, as UPMC transferred higher-than-anticipated amounts from clinical practice plans to School of Medicine departments.

Operating expenses

Total compensation, the University’s largest expense, rose to $1.15 billion, up 2.78 percent.  The compensation line was made up of salaries and wages of $883.68 million plus fringe benefits of $269 million.

Business and professional expenses rose to $336.64 million, up from $298.16 million, while utilities held steady at $48.97 million, up only slightly from $48.72 million. Maintenance and facilities expenses rose to $46.41 million, up from $44.05 million.

Endowment performance

For the first time, endowment distributions crossed the $100 million mark, rising to $101.89 million in FY15 from $96.63 million in FY14.

However, slowing global market conditions made for much lower earnings — 2.5 percent, compared to 18 percent in FY14 — pushing the University’s line item for investment performance net of endowment distributions to a negative $75.16 million (compared with a gain of $446.57 million in FY14).

Contributions for the endowment totaled $33.9 million.

Total endowment investments as of June 30 were $3.61 billion, up from $3.51 billion at the end of FY14.


In other business, the audit committee approved KPMG LLP as Pitt’s independent auditor and tax adviser for FY16. The firm has held that role at Pitt since 2010.

—Kimberly K. Barlow   

Filed under: Feature,Volume 48 Issue 3

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