ROLLA — MU Health Care’s expenditures continue to exceed its operating budget, Executive Vice President of Finance and Operations Ryan Rapp said in an update of the 2025 University of Missouri System budget at Thursday’s board of curators meeting.
Though the health system is projected to be in the black for the 2024 fiscal year, it is still projected to finish $43 million under its target, Rapp said. The fiscal year ends on June 30.
Projections from Thursday’s meeting documents show just 127 days of projected cash on hand for MU Health Care to end the 2024 fiscal year, a number that equates to a $312 million difference from its target of 200 days.
That target is not an arbitrary goal; it is a critical number that indicates healthy finances. MU Health Care has not met its target number of days cash on hand since FY2018.
“We are increasing the cash on hand in the months ahead,” said UM System President and MU Chancellor Mun Choi at a news conference following the meeting. “We’re confident that we’re going to navigate this difficult situation and come out stronger at the other end.”
Choi said the goal is to increase the number of days of cash on hand back to 200 days.
Monetary signs of improvement will be necessary for the upcoming fiscal year.
“The university’s consolidated credit ranking is at risk if healthcare performance does not improve over the next two years,” meeting documents say.
Richard Barohn, executive vice chancellor for Health Affairs and dean of the MU School of Medicine, said MU Health Care is working on an operational plan to “increase efficiencies and revenue” while decreasing total expenditures to finish FY24 and through FY25.
The UM System’s operating cash flow margin of 14.3% in FY22 was the median out of all public AAU institutions — a prestigious group of North American universities with elite research endeavors — at 14.3%. The system is projected to finish near the bottom of that list this year at 11.2%. Rapp said MU Health Care is a “primary driver” of the decline in overall operating margin.
Enrollment update
Choi shared in his report that, as of April 15, there are 6,195 freshmen enrolled at MU for the upcoming fall semester — a 17% increase from last year. All four system campuses are already above last year’s freshman enrollment numbers.
In January, MU broke its freshman application record.
MU’s total undergraduate enrollment has grown 6.2% since 2018 despite an overall 11.8% decrease in undergraduate enrollment across all colleges in Missouri. There has been a 3.3% decline in enrollment within the UM System during that time.
“The University of Missouri, across all four of our institutions, is well positioned as we move into this next year to maintain overall enrollment,” Rapp said.
A new R1 institution in the system
The Missouri University of Science and Technology is projected to join MU on the list of Research I (R1) Institutions on Jan. 1, 2025, Missouri S&T Chancellor Mohammad Dehghani shared in his report to the board.
The status is given to universities that have “very high” research activity, according to the Carnegie Classification of Institutions of Higher Education.
“Their goal was to be an R1 (university) by 2030, and they’re going to do that by 2025,” Choi said.
He added that he expects the University of Missouri-Kansas City to achieve R1 status in the next two to three years.
Performance-based raises
Rapp said the UM System is preparing to give performance-based wage increases to faculty on all four campuses.
The specifics have not yet been finalized because student tuition will not be set until May and the state government’s operating budget proposal — which includes over $503 million in appropriations — remains a proposal until the legislature approves it.
“(Performance-based wage increases) is not across the board,” Rapp said. It’s not an inflationary increase. It means that funding is available and will be rewarded based on merit and performance and possibly addressing market needs, but it doesn’t mean that everyone would get a 2% or a 3% increase.”
Assuming the wage increases move forward as currently planned, Rapp said he expects some people to receive as much as 10% in raises.
MURR upgrades
Curators unanimously voted to approve a plan to expand the MU Research Reactor Lab.
The project carries a $34 million budget, which will be funded by “MURR Reserves and Third-Party Contracts,” according to meeting documents. The reactor facility will expand by about 8,000 square feet as part of the renovation. It will be completed in two phases, the second of which is expected to wrap up by March 2026.
