The Budget & Finance Committee and the Executive Committee of the University of Pennsylvania Trustees met (virtually) on May 14. There were presentations at the B&F Committee meeting on the Academic Component and Consolidated University financial results for the nine months ended March 31, 2020, as well as a presentation on the Health System’s financial results for the same time period.  

Vice President of Finance and Treasurer MaryFrances McCourt reported that Penn entered this crisis period in a financial position of great strength, a sentiment that Vice President of Budget and Management Analysis Trevor Lewis echoed. He said that, thanks to strong growth in sponsored research from industry and federally-funded projects, there was an increase in net assets. There was, however, a decline in net assets from operations due to the disruption to room & board and the extraordinary expenses the University incurred. 

Ms. McCourt noted that more of the market volatility occurred after the end of the third quarter and would be more evident when the fiscal year ends in June.

Penn Medicine Senior Vice President and Chief Financial Officer Keith Kasper gave the UPHS report in which he noted that the health system created the capacity for a potential surge of COVID-19 patients by postponing non-urgent and elective cases to conserve the PPE supply. He too said that the budget was not yet showing the effects of the downturn but that in April there was a 72% decline in surgical cases.

Trustee Chair David L. Cohen described the 120 rooms that were completed ahead of schedule in the new Pavilion (Almanac April 7, 2020)  as an incredible team effort which involved 24/7 construction crews. Those rooms could be used as regular rooms or as ICU rooms. One reason those rooms have not been used yet is that Penn Medicine has used home care and getting people out of the hospital when possible to preserve ICU capacity.

President Amy Gutmann said that the level of care provided has been heartwarming, with a low mortality rate; the ability of patients to get out and resume their normal life is a model for health systems everywhere. 

At the Executive Committee meeting, Mr. Cohen encouraged the Penn community and trustees to join in the virtual commencement ceremony. President Gutmann said that Penn Medicine and the University have met the pandemic with a strong response. She noted that more than 4,000 classes were moved online very quickly and Penn’s dedicated staff has kept the campus safe and operational for the essential workers. 

President Gutmann presented the resolution to appoint Russell Di Leo as comptroller (Almanac April 21, 2020), which the Trustees passed along with three B&F resolutions. 

One authorized the incurrence of long-term indebtedness (bonds) for the University—up to $300 million, since, as Ms. McCourt explained, low rates are available at this time. 

Another resolution authorized $18.2 million for the final phase of upgrades and reheat system repairs to BRB II, which is now over 20 years old. 

The final resolution for $12.35 million is to replace windows and improve ventilation in the iconic Palestra. 

EVP Craig Carnaroli gave the financial report, which he underscored does not fully reflect the impact of the pandemic.