An Inexcusable Surplus

FOR THE PAST five years, the Harvard administration has warned its constituents to tighten their belts for a period of financial stringency. An overall economic recession, coupled with a decline in government grants and rising costs, the administrators said, would mean that Harvard would find its resources heavily burdened and that this burden would have to be shared by all--administrators, faculty and students.

But according to the most recent treasurer's report, this burden appears not to have been distributed equitably. This year, for the first time in the past five years, Harvard ran a substantial surplus, or in other words, it took in more money than it spent. The surplus, which through a combination of financial conservatism and bureaucratic maneuvering remained unused, amounted to $2.1 million.

A surplus is normally taken as a sign that a business is healthy. From a strictly financial point of view, the news that Harvard made a profit this year is good. But Harvard is supposed to be a place for learning, not a business. A surplus should only be allowed when there are no programs, no scholarships, no financial needs at all that are left to be satisfied. And in a time of financial stringency, a time when cutbacks and cancellations are the rule, a surplus is inexcusable.

It is telling to note where the additional income that caused this year's surplus came from. The treasurer's report shows two areas in which income rose well beyond the expectations of Harvard's financial whizzes: student fees and government grants. While the financiers expected the government's contribution to drop--and had been using this as an excuse for requiring students to settle for less aid and fewer programs--actual government funding rose by $3 million.

Income from student fees rose even faster. 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. Thus, Harvard leaned harder and harder on its students, in a year in which government funding increased and the budget showed an overall profit.

And how did Harvard spend this money? Every area of spending rose--faculty and employee salaries, equipment and supplies, construction--but one: scholarships and other student awards. For the first time in recent memory, the amount of money Harvard spent for scholarships actually declined.

The evidence is clear. The primary task of this University--education and research--is falling into neglect under a system with bureaucratic incentives for efficiency and economy. Without a vigorous attempt to change the attitudes and antediluvian methods with which Harvard manages its money, students can expect to continue to pay more and get less.