Report from Carolyn A. Bunker, the Vice President for Finance and Administration
For the sixth consecutive year, government sponsored revenue surpassed both budget and prior year results and the Institution completed 2005 in solid financial condition. Despite this performance, we expect the challenging federal funding situation to continue. Therefore, we reduced costs in 2005, trimmed the 2006 budget, and we are developing additional revenue sources.
This past year was one of change for finance and administration. The Investment Committee selected Timothy Stark to be WHOIís first investment officer. David Stephens, who has been with the Institution for nine years, assumed the role of controller after serving as WHOIís manager of government regulations. Through attrition, the controllerís staff has been reduced from sixteen to thirteen and we are leveraging our investments in technology to bridge the gaps. We plan to continue our administrative hiring freeze, which has been in place since 2004. During that time, the Institution has eliminated nineteen administrative positions.
2005 financial highlights:
- Cash increased by $8.7 million due to a bequest from the estate of Claudia Heyman. The Institution received $10 million from the bequest in 2005 and the remainder will be distributed to WHOI in 2006.
- The Institutionís assets grew by more than $30 million to $485 million. This increase is largely attributable to construction of new laboratories and to changes in the pension plan. The pension plan changes created an intangible asset valued at $13.7 million.
- The 2002 Clark Laboratory fire insurance claim was settled during 2005. The Institution has received $6.5 million from its insurer and has recognized uninsured losses of $2.2 million over the three years needed to restore the damaged laboratories.
- The Institutionís accrued pension liability increased from $24.7 million in 2004 to $28.8 million in 2005.
- The endowment fund grew to $305.7 million in 2005 from $290.7 million in 2004 with a total return of 9.8%.
- Total sponsored research income was $112.4 million in 2005 compared with $108.5 million in 2004.
- Our total overhead recovery in 2005 was $56.4 million compared with $55.2 in 2004. At year-end, the institution had a cumulative overrecovery of $3.1 million.
- Gifts, grants, and pledges amounted to $18 million in 2005 compared with $15.3 in 2004.
- Endowment income of $13.6 million was distributed to operations during the year. Research received $4.9 million, education received $5.6 million and current operations received $3 million. Distributions from investment returns continue to be a critical source of revenue for the Institution and make up approximately 10 percent of operating revenues.
- The Institution spent $56.5 million on compensation during 2005. Included in this amount was $9.2 million for vacation, holidays and sick time. Other fringe benefits cost $10.5 million for a total compensation package of $67 million, 50 percent of our 2005 operating expenses of $134.6 million.
- The Institution invested $27.9 million on the construction and renovation of facilities during 2005. In addition, $1.3 million was invested in maintaining existing facilities compared with $895,000 in 2004.
During 2005, the Institution completed new laboratories on the Quissett campus
and began planning Village laboratory renovations. We have taken
steps to control spiraling health plan and retirement plan costs.
We are undertaking an across-the-board assessment of the Institutionís
readiness to expand our applied work and seek beneficial industrial
partnerships. Some of these changes are difficult, but the current
financial strength of the institution should ease the transition
to a new organizational model that includes applied market-driven
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