CHAMPION ON THE BUDGET

To the Editors of The Crimson:

There are an unusually large number of issues raised by your editorial of December 4 on "An Inexcusable Surplus" which deserve comment. I will attempt to limit my comments to the most deserving.

First, the combined operating surplus of $2.1 million amounts to less than 1 per cent on a $217 million expenditure. Budgets are by their very nature a complicated set of forecasts and estimates, subject to much wider swings. Considering that we are dealing with more than 20 major faculty and service department budgets and a host of smaller ones, and that each unit operates with relative autonomy within its own budget, such a difference is a composite achievement, not a sign of financial maneuvering.

Second, while the University is not a business, neither is a surplus a profit. The surplus realized is simply the total of a number of individual faculty balances which are kept by them and are thus available to them to meet the urgent needs of this year and next when, as I noted in my report, the inflated costs of food and fuel and library books and almost everything else are going to test all of our resources and sources of income much more severely than in 1972-73.

Third, the editorial stated that "the University garnered nearly 10 per cent more than last year in tuition money and a full 25 per cent more in room and board fees." In fact, fees for tuition, room and board rose about 6 per cent for each student. The main reason for the larger increases in total fees collected by the University was the simple accounting fact that more Radcliffe-related income was included for the first time in the Harvard figures. Your earlier news story correctly recorded this fact.

Fourth, you observed that the funds expended for student scholarships declined. An explanation for this slight decline in scholarships was available to anyone who asked. It was federal government and foundation support through Harvard, particularly in scholarships for FAS graduate students, which fell, not the level of Harvard's direct support from its own resources. Thanks to its efficiencies both last year and this, the Faculty of Arts and Sciences found itself able to pour an additional $800,000 into graduate student aid this year while federal and foundation contributions are continuing to decrease.

Finally, let me note where in the University the surpluses occurred--and where therefore the money is available. The major surpluses of a few hundred thousand dollars each are in the School of Public Health, the restricted Maria Moors Cabot Foundation, and the School of Business Administration. For obvious reasons, these surpluses cannot be taken from these faculties and units and diverted for use in other areas, such as Arts and Sciences. The remaining surpluses are amounts in other units, some of which are income on funds accumulated for assigned program or operating purposes over a number of years. The one operating surplus of consequence in the areas touched on by the editorial was the surplus of $271,000 in the Houses and Dormitories account for 1972-73, but this surplus too is unavailable because it had to be applied against previous annual deficits in that account. Even that payment still leaves a deficit balance of $220,000 in the Housing account. A fundamental principle to be remembered in considering Harvard financial matters is that there were years before, sometimes with deficits, sometimes with surpluses, and that there are years ahead, some easier, some harder. In this case there were deficits behind and harder years ahead.

I hasten to add that financial management both centrally and throughout the University was not perfect in 1972-73 is certainly subject to criticism this year and will be quite assailable next year. It warrants constant scrutiny and informed criticism at all times, and your interest and concern are not only healthy but welcome. But your purposes and those of your readers will be better served when first impressions are checked against available facts before hasty conclusions are drawn and recorded.

All of us have learned and relearned in recent years to be wary of official explanations, but that is no reason not to seek them. I would hope to persuade you that some are better than others, but there is no obligation on your part. Hale Champion   Vice President for Finance