Senators Chap Petersen (D-Fairfax City) and Bill DeSteph (R-Virginia Beach), are calling for an investigation into disclosures that the University of Virginia has accumulated a $2.3 billion operating surplus, now titled a “Strategic Investment Fund,” that is significantly larger than the Commonwealth’s own cash reserves. Both senators agree that the money, which the university admitted arises from its operating accounts, should be returned to Virginia students and families through lower tuition.
Yesterday, UVA released a statement saying the money will be used in a “Strategic Investment Fund” as a source of “transformational funding” for the university. According to the Board of Visitors Strategic Investment Fund Guiding Principles, “[it] is expressly intended that the Investment Fund proceeds not be used to supplement the ongoing operations of the university within the scope of the annual budgeting process.”
In response, Petersen noted that the University has apparently run a covert surplus for years on its operating balances, which are predicated on state assistance and tuition revenues. “It is uniquely inappropriate for a nonprofit institution to consistently overcharge for its services – there is no legal authority for the university to do this, and no authority for its faculty or the board of visitors to spend these massive sums of money, which represent tuition and fees paid by thousands of working families who apparently have been over charged.” Petersen said.
From his office in Virginia Beach, Senator DeSteph called for a forensic audit of the UVA fund, and a full report on those who authorized the creation of the fund. “As a senator, and as a citizen, I have more questions than UVA has answers. There are families and students in Virginia Beach who are struggling to pay for college tuition, and I can’t explain to them why a public university is sitting on $2.3 billion,” DeSteph said. He continued, “This was all done in closed session meetings, under the cover of ‘personnel matters,’ which I feel is completely inappropriate.”
The senators intend to formally call for an audit into the fund, which was announced the same week the Commonwealth’s economic indicators show a revenue shortfall that will delay a long-promised state employee pay raise.