As President and Provost, we are pleased to provide an update to the McMaster community on the University's budget. At the Oct. 25 Board of Governors meeting, the Annual Financial Report 2006-2007 for the year ended April 30, 2007 was approved.

Over the past few years, budgeting at McMaster, as at other Ontario universities, has not been easy. For the 2006/07 year, the University was facing a significant operating budget deficit. McMaster was fortunate to receive federal flow-through funding from the Province late in the fiscal year, which eliminated the in-year deficit.

This year-end funding was used to support major capital improvements and specific one-time investments at the discretion of the Provost. While this is good news, it will leave many people asking why do we so often forecast a budget deficit but end the fiscal year with a surplus — and that's a fair question.

Our expense forecasts at the University for the 2006/07 year were accurate. But without reliable, stable funding, future revenue projections remain difficult to forecast. It wouldn't be financially responsible to include revenue in the budget forecasts that is not assured.

We will continue to use one-time funds from the province for one-time projects such as capital expenditures to repair buildings, classrooms and labs. One-time funding cannot be used for on-going salary expenses.

The close of one fiscal year signals the beginning of a new budget cycle. We encourage everyone in the McMaster community to take time to review the 2006/07 financial reports here.
We encourage you to discuss these reports in your departmental and Faculty meetings.