FY22 financial report print.indd

Virginia Tech Financial Report 2021-2022

Summary of Expenses by Natural Classifica�on

Total Expenses by Natural Classification For the year ended June 30, 2022

Increase in Expenses by Natural Classification For the years ended June 30, 2022 and 2021 (all dollars in millions) 2022

Contractual services

2021

Change

Supplies and materials

8.3%

Amount

Percent

(restated)

6.5%

2.0% 5.6% 4.2% 2.3%

Travel Other operating expenses Scholarships and

Compensation and benefits

$ 1,029.9 $ 1,004.5 $ 25.4

2.5 % 9.4 %

Contractual services Supplies and materials

135.9 106.6

124.2

11.7 26.0 23.1 14.1 14.5

80.6 10.6 77.1 54.2 32.9

32.3 % 217.9 % 18.3 % 26.8 % 12.2 %

62.8%

Travel

33.7 91.2 68.7 36.9

fellowships Sponsored program subcontracts

Other operating expenses Scholarships and fellowships* Sponsored program subcontracts Depreciation and amortization

8.3%

4.0

135.8

125.4

10.4

8.3 % 8.6 %

Compensation and benefits

Depreciation and amortization

$ 1,638.7 $ 1,509.5 $ 129.2

Total operating expenses

*Includes loan administrative fees and collection costs.

programs, with the return of spectators to football games and dorms and dining returning to more normal capacity. Research expenses had the sec ond largest increase with $23.0 million of sponsored grants and research, signaling a return to pre-pandemic levels. While all other functional ex pense lines increased as the university returned to more normal operations post pandemic, the institutional support line did show a decrease of $10.0 million. This decline was due to the larger partial reduction of the auxiliary indirect cost allocation charge in prior year. The partial year reduction was authorized by the state and done to provide pandemic relief to the auxiliaries. The current year totals are more in line with the normal total expenses for this function. In summary, the university’s operating revenues increased by $149.3 million or 12.8% over the preceding year, while operating expenses grew by $129.2 million or 8.6%. This resulted in an operating loss for the current fiscal year of $327.0 million in comparison to the operating loss of $347.2 million generated during the previous year. State appropriations, COVID-19 relief funding, and other net non-operating revenues were used to meet operating expenses not offset by operating revenues.

Total Expenses The university is committed to recruiting and retaining outstanding faculty and staff. The personnel compensation package is one way to successfully compete with peer institutions and nonacademic employers. The natural expense category, compensation and benefits, comprises $1,029.9 million or 62.8% of the university’s total operating expenses. This category in creased by $25.4 million (2.5%) over the previous year. Generally, changes to expenses in this category come from three sources: increases or reduc tions in the number of personnel, annual salary increases, and the general trends in the costs of fringe benefits. The benefits section is also affected by the changes in the actuarially calculated expenses for the OPEB and pension programs. All of the natural expense categories saw increases as the university recovered from the pandemic and travel and other spending returned to normal. Operating expenses for fiscal year 2022 totaled $1,638.7 million, an in crease of $129.2 million, or 8.6%, from fiscal year 2021. In the functional categories of expense, auxiliary enterprises experienced the largest increase ($52.5 million) predominantly in the athletics and dorm and dining

Summary of Expenses by Func�on

Total Expenses by Function For the year ended June 30, 2022

Increase (Decrease) in Expenses by Function For the years ended June 30, 2022 and 2021 (all dollars in millions) 2022

2021

Change

Public service

Amount

Percent

(restated)

Auxiliary enterprises

Instruction

$ 446.2 $ 425.5 $

20.7 23.0 52.5 10.3 4.5

4.9 % 7.0 % 5.1 % 8.2 % 9.5 % 25.5 %

5.7%

15.8%

Research

351.4

328.4

Research

Public service

93.2

88.7

Academic support Student services Institutional support Operations and maintenance

6.9% 1.8% 5.0%

Auxiliary enterprises

258.1 135.8

205.6 125.5

21.4%

Depreciation and amortization

Subtotal

1,284.7

1,173.7

111.0

Support, maintenance, and other expenses Academic support

112.6

104.9

7.7 4.6

7.3 %

5.1%

Student services

30.1 81.3 84.6 45.3

25.5 91.3 82.0 32.1

18.0 %

Institutional support

(10.0) (10.8)%

8.3%

27.2%

2.8% Student financial assistance

Operations and maintenance of plant

2.6

3.2 %

Student financial assistance*

13.2 18.3

41.1 %

Instruction

Total support, maintenance and other

354.0

335.8

5.4 % 8.6 %

Depreciation and amortization

$ 1,638.7 $ 1,509.5 $ 129.2

Total operating expenses

*Includes loan administrative fees and collection costs.

12

Management's Discussion and Analysis