CPA Caucus Finds Significant UW Cash Balance Dale Kooyenga, Representative 14th Assembly District
Prior to election to the state assembly, I spent the better part of ten years working for a large international accounting firm. I specialized in the auditing of financial statements for large businesses, governments and not for profits. In 2010 three other CPAs were elected to the State Assembly and we formed a CPA caucus. The four of us rolled up our sleeves and as a direct result you will soon see reforms to our tax code, reduced bonding and overall more efficient spending. This past week it came to light that the University of Wisconsin System amassed a significant amount of cash reserves that were not easily identifiable on their balance sheet. The Legislative Fiscal Bureau (LFB) with guidance from the CPA caucus, made the discovery by reviewing the detailed financial statements of the UW System. We found that the UW System is doing remarkably well which confused us because the communication from the UW System over the past two years was mostly doom and gloom. In particular, many communicated that Governor Walker and the Legislature's actions were resulting in uncertainty and reduced resources. To look at the history of these tuition hikes in the UW System, from 2009 to 2012, the tuition balance nearly doubled to $414.1 million. At the same time, base resident undergraduate tuition increased 5.5 percent each year. Wisconsin is ranked number one for tuition and fees increases for resident undergraduates at Big Ten universities over the past ten years. The tuition increase was 134.7 percent. The UW System was publicly making statements that additional tuition hikes and nearly double inflation were likely for next year. After asking further questions, the Legislative Fiscal Bureau released a memo  highlighted over $1 billion in cashon-hand. After subtracting out federal grants and certain restricted gifts the UW system still has $641 million cashon-hand. The UW System should have cash reserves, but it appears the regents were not aware of the significant cash balance. Plus, there were no policies addressing what the appropriate amount of cash should be. The UW System has doubled the amount of cash-on-hand over the past 4 years. The UW System, over the last two years, proved that they can effectively operate within current levels of state support from the general fund and current tuition levels. Based on the CPA Caucus's due diligence, we are moving to freeze UW tuition for the next 2 years and maintain current levels of funding. The additional $181 million of state support and millions of additional bonding in this budget should be reexamined. View more about the CPA Caucus team at the video link here. Note from IBAW: Special thanks to the MacIver Institute for providing video.
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