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Delaware State University has managed to shore up a $14 million surplus as it turns to leave the COVD-19 pandemic. Without federal aid, the college may not be in a strong position, according to officials. | DBT PHOTO BY KATIE TABELING[/caption]
DOVER — With the help of several federal funding programs, the Delaware State University is looking at a $14 million budget surplus, and with millions more of federal funding left on hand.
Delaware’s lone historically Black university reported the surplus at the end of Fiscal Year 2021, and its Chief Financial Officer Anas Ben Addi projects that it is slightly above revenue projections for the first six months of FY 2022.
DSU has also received $73 million in CARES, American Rescue Plan Act funding and HBCU funding in the last two fiscal years. At this point, the university has spent about $42 million, or 58%, on student aid, COVID-19 measures and payroll expenses.
That leaves DSU with $31.2 million left in the restricted federal funds, and Addi noted that the state’s allocation of ARPA funds have yet to be accessed. He also noted that DSU’s revenues were seasonal, and the expenses at February was at roughly $67 million, or roughly half the balanced budget at this time.
DSU President Tony Allen credited the university’s stable outlook on the administration placing a “major premium on financial stability and long-term strategic growth.”
“Like many HBCUs, it is no secret that the university has been historically under-resourced,” Allen told the Delaware Business Times in a statement. “As a result, we have to prepare for the unplanned financial challenges that can come our way and, more importantly, the opportunities to invest and grow for the future. “
Addi noted that without the federal funding, the university may be looking at a different financial picture for FY 2022.
“We are thankful for our delegation, because with the federal grants, we were able to fill the gaps that COVID created,” Addi told DBT. “Without COVID, we may have broken even, but with it, we would have lost money.”
Of the federal funding, the university has spent $27 million of that grant money on payroll expenses and $8.9 million on COVID-19 testing, public safety overtime, instructional design services for remote learning, as well as marketing online classes. Another $5.5 million was spent on emergency student financial aid.
Like several colleges and universities across the state, DSU’s biggest loss in revenue was the absence of students on campus, with housing and dining services revenues suffering the most. Addi noted this revenue dropped to $15 million in FY 2021, nearly in half from FY 2020.
DSU has roughly 900 full-time employees, with 250 serving as full-time faculty. Several hundred, varying from semester to semester, work on an adjunct basis. During the pandemic, the university did not lay off or furlough staff as a survival mechanism, according to DSU officials.
However, DSU implemented a hiring freeze and ended contracts with temp agencies, which affected about a dozen positions.
“During COVID-19, we have taken a crisis moment and found unique opportunities to build a reserve we did not have before, significantly enhance our endowment and build an investment model that will dramatically transform our campus,” Allen added. “It has required learning new platforms, working longer hours, and generating new, bankable ideas that keep us on mission.”
The positive revenue trends are also driven by high enrollment numbers, as DSU announced its largest student body to date for the fall 2021 semester with 5,649 students. The university added 1,023 freshmen as well as 75.1% freshman retention rate. With many COVID restrictions fading from Delaware, many colleges and universities may see students return to campus life.
In addition, the university has also taken a lesson from the unpredictability of the world and recently established an operating emergency fund. Under the DSU Board of Trustees’ direction, the fund will hold about three months of operating expenses, which is about $30 million, in case of unexpected expenditures. At this time, the emergency fund is funded at $10 million.
DSU also managed to raise $7.5 million through private fundraising efforts and gifts in the past two years, according to DSU spokesman Steve Newton. That brings the endowment to $46 million. The university did not draw down from its endowment as a financial failsafe measure during the pandemic.
“During COVID-19, we have taken a crisis moment and found unique opportunities to build a reserve we did not have before, significantly enhance our endowment and build an investment model that will dramatically transform our campus,” Allen noted.
Amid all of the positive trends, DSU will be contending with changing capital expenses, namely the acquisition of DSU Downtown (the former Wesley College), the Molecular Diagnostic Laboratory in Newark and now the Wilmington Riverfront building.
Right now, Allen has budgeted roughly $5 million every three fiscal years for the renovation of DSU Downtown. The university used part of the $20 million gift from billionaire philanthropist MacKenzie Scott. In addition, the state has reimbursed DSU for $5 million to buy the former Wesley Athletic Complex.
“The people of Delaware State University – administrators, faculty, and staff – are delivering on a broad vision – to be the most substantively diverse, contemporary, and unapologetic HBCU in the country,” Allen said. “We still have much more to do, but we have been fortunate to get to this point together.”
