Dive into OU budget reveals ‘surprises’

TULSA — Officials working to shore up the University of Oklahoma’s budget have discovered millions of dollars in savings and millions more in expenses that were not “properly accounted for,” OU President Jim Gallogly said Thursday.

“Our budgeting process is very weak and, as a result of that, there seems to be surprise after surprise,” Gallogly reported to the OU Board of Regents during a meeting on the university’s Tulsa campus.

Among the surprises are costs related to two upperclassmen housing projects — the OU-funded residential colleges, which opened in fall 2017, and Cross Neighborhood, a thirdparty project that opened this year.

“We have been told that we had no fiscal responsibility related to that (Cross) project and, of course, we’re not involved in the debt,” Gallogly said. “It turns out though ... the cash amount that goes out the door from the University of Oklahoma related to the Cross project is about $7.1 million a year.”

The money goes to rent parking and for commercial leases and food services, he said.

The residential colleges — Headington College and Dunham College — currently are at about 63 percent occupancy and will have about a $2.3 million cash loss this fiscal year, Gallogly said. Even at 100 percent occupancy, they would lose about $1 million annually, he said.

“We have about $81.7 million debt related to those two colleges,” Gallogly said.

Part of that is an extra $10 million the university contributed to the project from general funds during the construction, which was recently discovered.

“This project has been a very, very difficult project for the university and does have a significant financial loss,” Gallogly said.

Older housing complexes also carry debt due to remodeling projects, he said.

“These are problems that are solvable,” Gallogly told the board. “We’ve made great progress so far. More to come.”

Two weeks before he became president July 1, Gallogly projected the budget would have a $15 million operating loss.

Since July, his executive team has found an expected $20.6 million in annual savings, he said Thursday.

“That’s what we’ve been able to itemized so far, but our work is only partially done,” Gallogly said.

“We’re in the process of putting in place new budgeting processes over the course of this year,” he said. “Much work remains to be done there.”

Regent Natalie Shirley, of Oklahoma City, thanked Gallogly “for taking a microscope to this and really working to understand and cut expenses.”

Also Thursday, the board accepted a gift that will be revealed at a naming ceremony Sept. 18 at the College of Public Health on the Health Sciences Center campus, as well as “a major gift to the university” that will be announced in the next few weeks. Officials did not release the amounts of the gifts or the donors.