Record $2.1 Billion Budget Includes Student System Replacement

June 11, 2007 -- The University of Virginia’s first $2 billion annual budget will include funds for a long-overdue replacement of the outdated and overburdened ISIS student records system.

The U.Va. Board of Visitors approved a $2.1 billion spending plan for the 2007-2008 fiscal year, a 6.7 percent increase over the 2006-2007 spending plan, during its meeting on June 8. It includes $1.1 billion for the University’s academic division, $930 million for the U.Va. Medical Center and $33.3 million for U.Va.’s College at Wise.

State general-fund support increased modestly to $188 million, and held steady at 9 percent of the University’s total revenues. The largest single income source is patient revenue from the Medical Center ($930 million, or 44.3 percent of the total budget), followed by tuition and fees ($329.9 million, or 15.7 percent), and grants and contracts ($273.2 million, 13 percent). The rest comes from revenues raised by the University’s auxiliary enterprises, private support and other sources.

The budget item that drew the most focus at the Finance Committee meeting on June 7 was the long-awaited replacement for ISIS, the Integrated Student Information System, a mainframe-based system that dates back to 1990.

The BOV had voted in 1999 to seek a replacement for ISIS — the same time the University opted to install new Oracle software to handle its financial and human resources/payroll functions. However, “there was not a feasible student system option” on the market at the time, according to background materials prepared for the board. The financial and HR system replacements forged ahead; the student system project was put on a back burner.

The logjam broke in 2005 when Oracle purchased PeopleSoft, which at the time offered the leading student information management product. The University later negotiated a $51.2 million purchase of the merged companies’ product, PeopleSoft Campus Solutions, with installation set for completion by December 2009.

Until then, the University will continue to use ISIS, which has undergone numerous upgrades in an effort to keep up with enrollment growth, said Leonard W. Sandridge, U.Va.’s executive vice president and chef operating officer.

“We have to do something,” he said. “The system we have … simply is not working well. We’ve had registration problems.”

Switching to the new system will be a “major, major undertaking” and will require all 10 of the University’s schools to change their practices to conform to the new system, Sandridge said. “That will take a lot of change management.”

The new student information system was just one of the board-mandated priorities addressed in the 2007-2008 budget. Among the others: final implementation of the AccessUVa financial aid plan; continued reduction in the University’s deferred maintenance backlog; continuation of the effort to keep faculty and staff salaries at competitive levels; and the effort to enhance the University’s research program by hiring 10 top researchers.

Nearly $10 million of the budget increase in the academic division results from “unavoidable” new expenses, including $7 million to fund state pay raises, Sheehy said. Personnel costs make up almost two-thirds of the academic division’s budget.

On the revenue side of the academic division budget, private support continues to outpace state funding. State funds account for $170.9 million, or 14.9 percent, of the academic division budget; private-source revenue amounts to $193.4 million, or 16.8 percent.

The budget was approved against a slightly uncertain fiscal backdrop. University budget officials are keeping a wary eye on Richmond, where their state counterparts are forecasting a relatively slight revenue shortfall for the 2006-2007 fiscal year, which ends June 30. 

“I don’t think anybody should be alarmed,” said rector Thomas F. Farrell II. “It’s very small.”

“The key here is to watch very carefully what the trend is,” Sandridge said.

In other action, the board approved changes in the scope of two Medical Center projects. A donor has stepped forward with funds that will allow an unfinished fifth floor to be added to the Emily Couric Cancer Center, upping the project’s price tag from $59 million to $74 million. The planned expansion of the hospital has been boosted to 72 intensive-care-capable beds. With a redesigned facade, the project’s budget was boosted from $78 million to $80.2 million.