BUDGET REPORT PREPARED FOR THE MFA BY KATHRYN CHALLONER

April 8, 1997

CATEGORIES FOR REVENUE CHANGES:

1) Tuition Increases reallocation. The University's Board of Trustees approved a 4.9% increase in tuition for 1997/8. We petitioned the university for a reduction -- the University Senior Officers did not approve a reduction because it would set a precedent for the Deans of the other schools to request similar reductions. However they did permit the School of Medicine to establish a fund for 1% ($170,000) to be established exclusively for the students' need.

2) Increase In Revenues from the Recovery of Indirect Costs. Mr. Vigil believed that he had been conservative in his projections and that he could increase his projection from 7% to 9%. (However the loss of some investigators with large grants may impact this).

3) Increase in Unrestricted Gifts. The development office will be asked to generate an additional $500,000 in unrestricted gifts.

CATEGORIES FOR EXPENSE REDUCTIONS:

1) Publications -- disbanded for 1 year; thus the HSC Weekly and USC Medicine will not be published for 1997/98.

2) Public relations -- reduced support.

3) Development office -- reduced support.

4) Vivaria Subsidy -- reduced support, task force to be appointed.

5) Family Medicine -- reduced support.

6) Renovations -- reduced funding.

7) All Funds Budgeting -- traditionally with gift funds there has been little effort to reduce the current unrestricted support and offset it with the gifts. It may not be possible in all cases but Mr. Vigil believes that all funds budgeting can substantially mitigate the dependency on current unrestricted support over time.

8) Research Assistant Tuition -- tuition remission will be held flat in 1997/8.

9) Rental Subsidy-- reductions in rent support for auxiliary facilities.

Above = 1.2 Million $ deficit - Budget Approved.