Report from Carolyn A. Bunker, Vice President for Finance and Administration
|Carolyn Bunker with Dave Stephens, controller. (Photo by Tom Kleindinst, WHOI Graphic Services)
For the fifth consecutive year, government sponsored
revenues surpassed both budget and prior year results and the Institution completed 2004 in strong financial condition. This strength is due in large measure to both the Institutionís scientific and engineering
achievements and its commitment to administrative efficiency and fiscal discipline.
Total sponsored research released to operations was $108.5 million in 2004 compared with $100.8 million in 2003, an increase of 8 percent. Government sponsored research, excluding ship and submersible operations, was $67.5 million in 2004 compared with $63.4 million in 2003, a 6 percent increase. The Institutionís labor bases, against which fringe benefits and overhead are recovered, finished the year slightly over budget, while overhead costs were reduced by almost $2.7 million, resulting in a substantial over-recovery of overhead expenses. Our total
overhead recovery was $55.2 million compared with $47.7 million in 2003.
- The Institutionís total assets grew by more than $60 million,
or 15%, to $455 million. This increase is attributable
to the performance of the Endowment and to construction
of new laboratories on both campuses.
- During 2004 the Institution issued $54,850,000 of Massachusetts Health and Educational Facilities Authority (MHEFA) variable rate bonds to construct new laboratories and to repay previous MHEFA loans. The Institution negotiated an interest rate swap agreement
that effectively locks in a fixed rate on the bonds of 3.79% for 30 years.
- The Institutionís accrued pension liability increased from $6.9 million in 2003 to $24.7 million in 2004. To allow time to evaluate the retirement plan and control the cost, the plan was amended effective December 31, 2004, by freezing compensation. A task force will propose a new plan that will be in place by the end of 2005.
- The Institution ended the year with a slight decrease in total net assets of $2.5 million due in large part to pension
- The Endowment Fund grew to $291 million in 2004 from $269 million in 2003 with a total return of 12%.
- The Institution ended the year with a total increase in net assets from operating activities of $8.3 million.
Our primary federal sponsor, the National Science Foundation (NSF), did not receive a large increase in its 2004 appropriation. However, the Institution benefited from a 22% funding increase from NSF, which more than offset a decrease in funding from the United States Navy.
Through the generosity of friends of the Institution, gifts, grants, and pledges reached $15.3 million in 2004. Outstanding net pledges at the end of 2004
were $6.9 million.
Investment returns distributed to operations totaled $13.7 million in 2004. Sponsored research received $4.7 million, education received $5.6 million and current operations
received $3.4 million. Distributions from investment
returns have become an important source of revenue
for the Institution and make up 10 percent of total operating revenues.
The Institution spent $56.3 million on compensation during 2004. Included in this amount was $8.9 million for vacation, holidays and sick time. Other fringe benefits cost $10.8 million for a total compensation package of $67.1 million, 52 percent of our total 2004 operating expenses
of $128.2 million.
The Institution invested $19.4 million on the construction
and renovation of facilities during 2004. In addition,
$895,000 was invested in maintaining existing facilities compared with $884,000 in 2003.
During 2004, to relieve overcrowding and create state of the art laboratories, the Institution has made significant progress in developing the Quissett Campus and renovating
laboratories in the Village, while maintaining its financial
stability. However, we face significant short and long-term economic challenges: reductions in federal funding agency budgets and a shift in focus from basic to applied research will probably require that WHOI change as well.
In the short term we are taking steps to control spiraling
health plan and retirement plan costs. We are undertaking
a comprehensive assessment of the Institutionís central
administrative functions to improve effectiveness and competitiveness and direct resources to high priorities.
To prepare for long-term challenges, we are exploring additional and new funding sources with an emphasis on intellectual property development and applied research. These changes will be challenging, but with the support of the staff, students, trustees and corporation members, the Institution will continue to prosper and grow in reputation.
Carolyn A. Bunker
Vice President for Finance and Administration<
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All Rights Reserved.
Mail: Woods Hole Oceanographic Institution, 266 Woods Hole Road, Woods Hole,
MA 02543, USA.
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