Repository: UIHistories Project: Board of Trustees Minutes - 1956 [PAGE 194]

EXTRACTED TEXT FROM PAGE:

1954]

UNIVERSITY OF ILLINOIS

191

ing the money. It is a fact that in practically all instances the buildings being used for the projects and the equipment being used in the projects have been bought from State appropriated money. W e believe this should be given considerable consideration and the status of such monies should be clarified. At the beginning of this particular subject, we noted that this fund had a beginning balance of $908,562.18. A s of June 30, 1953, a year later, the ending balance had grown to a total of $900,952.31. The details in Exhibits L and M reveal the volume of receipts and disbursements of this particular fund. Illini Union Building Transactions We stated that this is a report on an examination and survey. Since it would be a physical impracticability to examine in detail every transaction of the University, we concentrated our attention on selected activities of interest. The following comments on one activity of the University reveal the complexity of the University's transactions. One of many self-liquidating enterprises, the Illini Union Building, had done business with a subsidiary (the Illini Union Bookstore) and subsidiaries of this subsidiary (the Coffee House and dispensing machines). It may be pointed out that the receipts of these activities are deposited in a University general account. Checks are made and drawn on this account by the University and no control or accounting of receipts and disbursements are maintained except at the University. The Illini Union Building functions as a social center and offers services to students, faculty members and the University. The Illini Union Building is a bond revenue, self-liquidating enterprise which depends upon its profits to operate and pay off its bonded indebtedness. During the year under review, the Illini Union Building collected from the University, in cash, the amount of $102,250.00. This is the same $102,250.00 which appears as an expenditure in the physical plant budget set up by the University. This constitutes a transfer of $102,250.00 of State appropriated money to a self-liquidating, bond revenue account without a State warrant being drawn. A charge of $17.50 is made for the use by each faculty member of the available services at the Illini Union Building. In addition to this, the usual semester charge of $7-50 per student is paid on behalf of certain classes of students by the University from the physical plant account. We wish to make this observation. If the Illini Union Building had not received this $102,250.00 in cash, and an increase of $1,919.50 in accounts receivable, it would have operated at a net loss of $94,200.35 as detailed below: Net profit as per Illini Union books $ 9 069 15 Less previously mentioned transfer from Physical Plant for faculty and student charges 104 169 50 Net loss $ 94 200 35 The Illini Union Bookstore operates as a subsidiary of the Illini Union Building. At July 1, 1952, the Illini Union Bookstore was owed $100,000.00 by a subsidiary called the "Coffee House." During the year under review, it was decided to close the Coffee House and after the building was sold at book value to Stadium Terrace, an auxiliary enterprise, there existed a net loss of $39,173.79 on the books of the Coffee House. Only $60,826.21 of the original loan of $100,000.00 was paid to the Illini Union Bookstore. The Illini Union Bookstore also advanced $7,500.00 to another subsidiary which operated dispensing machines. During the year, machine sales commissions of $6,730.06 resulted in a profit of $4,352.88. McKinley Hospital Operations Analysis of the statement of receipts and disbursements of McKinley H o s pital reveals that a cash deficit of $20,540.34 on July 1, 1952, increased $32,368.52 to a cash deficit of $52,908.86 at the end of the year. Receipts of $122,942.45 include a transfer of $41,000.00 from the University administrative and general budget appropriation. Payrolls amounted to $110,013.96. A net operating loss, stated on the accrual basis of $74,471.68 was sustained in the year. While at the hospital, we made a detailed study and determined that the hospital could accommodate 115 patients per day, a potential of 41,975 patientdays per year. From the records at the hospital, it was determined that of the maximum 41,975 patient-days, there were only 7,837 patient-days charged. The hospital occupancy averaged 21 of a possible 115 patients per day.