Analysis: CMU’s financial audit reflects subsidies

Courtsey of 401(K) 2012, Flickr Creative Commons.
Courtsey of 401(K) 2012, Flickr Creative Commons.

Central Michigan University’s financial audit of the 2014/2015 year shows subsidies to the athletic program and medical school take a significant portion of the University’s expenses.

According to the audit approved by the CMU’s board of trustees on Thursday, roughly 20% of expenses is spent on auxiliary services, which includes the athletic program. While auxiliary services also includes residence halls and parking services, the athletic department relies on huge subsidies to survive.

When departments at CMU doesn’t create enough revenue to cover all of its expenses, money from other offices end up footing the bill. In the 2014/2015 year, the athletic department received $18,373,011 in subsidies.

In 2014/2015, the University had about $452 million in expenses, $91.8 million went to auxiliary services. About 20% of the expenses for auxiliary services went to the athletic department.

According to the operating budget, CMU’s athletic department has been receiving large subsidies since 1995. However, Insider reported earlier this calendar year athletics budget has risen by almost 50% since Dave Heeke became the athletic director.

The College of Medicine clinical operations are also considered an auxiliary services, which received  $1,146,762 in subsidies last year.

While that may not seem like much, consider CMED itself also receives its own subsidy.

When CMED was first introduced in 2008, then President Michael Rao promised the college would be self-sustaining. For this current year, CMED still operates in the hole by $11.8 million dollars, not including the subsidy for its clinical operations.

The financial audit itself points out “auxiliary services expenses increased $4.6 million (in the past year) primarily due to increased freshman enrollment in the fall of 2014, Athletics and College of Medicine clinic costs.” In comparison, spending for students services has only increased by $1.7 million and only accounts for 4% of CMU’s expenses.

The CMU administration and trustees often point out that 36% of expenses goes to instruction, which is accurate.

However, it’s important to take a hard look at CMU’s expenses because students are footing the bill.

In 2013 CMU class graduate with an average of $32,581 in student debt according the Institution for College Access and Success. According to the audit, $223.6 million was generated was from tuition. With the University generating $336.1 million in total operating revenues, tuition accounts  more 66% of revenue.

Students and other individuals in the CMU community should take a hard look of how the university is spending money and feel free to challenge the administration if they don’t agree with how it’s spent.

Arielle Hines is the editor of CMU Insider. You can contact her at 

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