Congressman Jim Sensenbrenner (R-WI) sent the following letter today to University of Wisconsin President Kevin Reilly regarding his management of federal funds: 

Dear President Reilly:

As President of the UW System, you are responsible for ensuring that taxpayer funding is handled in an appropriate and responsible manner.  I am concerned with the recent report from the non-partisan Legislative Fiscal Bureau.  

While the UW System has been raising tuition and clamoring for more taxpayer support, they have been stockpiling hundreds of millions of dollars in unspent tuition and federal grant monies.  The federal government provided the UW System with approximately $613 million in research grants for the fiscal year 2011.  And yet, a recent Legislative Fiscal Bureau memo found that millions were stashed away in a slush fund.  Specifically, the memo shows the UW System finished the year the year ending June 30, 2012, with nearly $650 million in cash reserves, including $414.1 million in tuition reserves. In total, the UW System ended the fiscal year with $1.05 billion balance. This end-of-the-year balance has nearly doubled since 2009.  Adding insult to injury, the System grew these surpluses as it steadily increased tuition rates. The Board of Regents has raised base tuition across the System’s four-year schools by 5.5 percent annually since the 2007-08 academic year. 

I continuously hear from young people who are frustrated with high college costs and student loans. Some end up taking on substantial debt, while others put their hopes on hold or forgo higher education completely. Students and their families rightly expect that their tuition money will be used to cover their tuition costs, not to build up historic amounts of cash reserves. Additionally, the federal government rightly expects that federal grants be used for their specified purpose, not to line the pockets of the University.

Given these facts, I would like you to respond to the following questions:

• Why was this surplus not disclosed prior to the audit? 
• Of the $650 million in reserves, how much is in unspent federal grant monies?   
• What constitutes an appropriate level of cash balances and financial reserves for an institution of your size?
• With this newly disclosed surplus, will you call for a freeze of tuition rates for the 2013-2014 school year? 

America’s system of higher education has always been one of shared responsibility: students, families, states, and the federal government all taking part in funding a college education.  It is essential that the UW System do its part by ensuring transparency in its finances. I look forward to hearing from you on the steps you plan to take regarding this matter. 


F. James Sensenbrenner, Jr.
Member of Congress