March 2023 Finance Town Hall

J. Michael Gower, Executive Vice President - Chief Financial Officer & University Treasurer, hosted a Finance Town Hall on March 16 for almost 450 attendees. Agenda topics consisted of trends in higher education, presented my Mike Gower; cybersecurity perspective on assets, threats, and security tips, presented by Guy Albertini, Associate Vice President and Chief Information Security Officer; and the Rutgers’ fiscal year 2024 budget development and a review of the current fiscal year revenue and expense budgets, presented by David Moore, Associate Vice President and Chief Budget Officer. The video recording of the meeting and the presentation are available on the University Finance and Administration (UFA) website.

Trends in Higher Education – Mike Gower

Mike began his presentation by noting the 2022 Top Risks Report for Higher Education from United Educators. The top risks based on a survey conducted in September 2022 from over 100 colleges and universities show the following:

1. Enrollment
2. Data security
3. Recruitment and hiring 
4. Operational pressures
5. Student mental health

Mike mentioned that enrollment is not a surprise as local and county colleges also are experiencing declines. One reason that Common App will be available at Rutgers beginning Fall 2023 is to make it easier for applicants to apply to Rutgers. Data security continues to be a priority as Guy Albertini would later discuss. Recruitment and hiring were not at the top of the list prior to the COVID pandemic but have become a higher risk due to greater competition for talent and an increase in retirements.

The National Association of College and University Business Officers (NACUBO) members identified their top five higher education business issues:

1. Supporting and maintaining the workforce
2. Meeting students’ evolving needs
3. Providing secure and modern technology infrastructure
4. Managing an uncertain economic climate
5. Navigating resource constraints

NACUBO provides an in-depth analysis of these issues, including handouts and podcasts, on its website.

Assets and Threats: A Cybersecurity Perspective – Guy Albertini

Guy opened with 2023 cybersecurity predictions, including cyber insurance issues that may not qualify, growing trouble with multifactor authentication (MFA), social media and critical infrastructure attacks, more dangerous ransomware, more attacks on non-traditional tech from cars to toys to smart cities and space vehicles and drones, and more supply chain attacks.
 

Guy’s thesis: When you don’t understand the value of an assent, there is a high probability that you will not recognize a threat to that asset.

Rutgers assets include faculty, students, and staff, stadiums and arenas, power grids, data centers, networks, computers, data, and research. We must provide protection for all our assets to ensure we meet the university’s mission and vision. 

Potential threats to Rutgers assets:

• Phishing – general email attacks
• Spear phishing – targeted attack impersonating someone to increase the likelihood of clicking
• Whaling – attacks on senior management
• Ransomware – an attack on data until a ransom is paid
• Insider threats – person accidentally clicks on a link and is attacked as a result
• Advanced persistent threat – creation of a back door to the systems that users are not aware is happening; very advanced
• Data breach – information is stolen without authorization
• Wi-Fi attacks – logging in to a free wireless system which is then attacked
• Internet of things – anything that has a cyber presence (toaster, refrigerator) can attack a system.

Cyber threat actors, individuals, or organizations that try to attack the university’s assets:

• Nation-States use technology to facilitate threats, and misinformation on behalf of a country with a geopolitical motive (e.g., Ukraine war).
• Cybercriminals gain monetary profit by embezzling an organization using technology.
• Hacktivists use cyberattacks to support political or social causes.
• Terrorist groups use unlawful attacks on computers, networks, systems, and data to intimidate and further their cause.
• Thrill seekers want satisfaction from performing a cyberattack.
• Insider threats result from discontent such as placing a device to poison the systems.

Some initiatives that the Information Security Office is engaging in address these threats, including reviewing and updating security administrative controls, increasing visibility into the cyber threat landscape, considering data loss prevention tools, expanding training, providing security notifications, and exploring 24/7 monitoring.

Guy offered security tips to keep our assets safe, such as limiting what is revealed on social media; limiting job ad specifics as they relate to technology; using a password manager, MFA and anti-malware; and encouraging people to say something if they see something,

Guy answered many questions from attendees, which can be viewed in the recording. Questions that were not able to be answered during the presentation will be posted on the Finance Town Hall webpage.

Fiscal Year 2024 Budget Development and FY 2023 Budget - David Moore

David presented the FY 2023 budget to date which shows a structural deficit of about $125 million. This is a result of flat or reduced unrestricted revenues, increases in expenses related to inflation, and the impact of COVID on operations.
 

The total university revenue of $5.1 billion comes from tuition and fees (28%), patient care services (22%), State funding (20%), Miscellaneous sources such as auxiliary enterprise, student aid, athletics, endowments, and investment income (16%), and sponsored research (14%). Rutgers has seen a decline in in-state and out-of-state student headcount with overall enrollments impacted by the pandemic, a decline in high school graduates, and a decline in transfers from local county colleges.

Total university spending comprises our core missions (77%) for student instruction, research, public services, and patient care; administration, operations, and maintenance (15%); auxiliary enterprise (5%) for housing, dining, and parking; and athletics (3%). Rutgers expenses are experiencing the impacts of inflation notably on increases in travel costs, natural gas and electricity, and professional services for temporary staff where job positions have been difficult to fill. Fringe benefit rates have increased over the past two years impacting active grants that have not accounted for these increases.

Looking forward to FY 2024 financial plan, there are some impediments to our budget:

• Declines in high school graduates
• Compensation and benefit increases
• High cost of living and increased inflation
• Great resignation/retirements
• Uncertainly about continued pandemic impacts

Short and long-term opportunities that Rutgers will take to manage the budget include:

• Evaluate and develop an enrollment strategy.
• Evaluate and develop tuition and fee increases.
• Work with NJ State to recognize and fund growth experienced, higher inflation costs, and relieve pressure on tuition rates.
• Evaluate and set targets for gits and contributions, endowment, investment income, and other revenue targets.
• Evaluate and streamline expenses and repurpose funds to support high priorities.
• Prioritize initiatives that have a shorter time to return on investment providing resources for new initiatives.
• Maximize the use of Rutgers facilities and auxiliary assets for revenue generation and evaluate and develop plans for Auxiliary Enterprise to be self-supporting.

David answered questions from attendees, which can be viewed in the recording. Questions that were not able to be answered during the presentation will be posted on the Finance Town Hall webpage.

Ask the Experts open office hours followed the Finance Town Hall and were scheduled sequentially rather than concurrently so that participants can attend more office hour sessions.

Please complete the survey of the Finance Town Hall and “Ask the Experts” open office hours so that you can provide your feedback and suggestions to improve future sessions.