GW earns perfect score on fiscal test

The Department of Education awarded the University a perfect score on a fiscal responsibility test for 2010.

The audit – which evaluated 3,362 universities’ equity, reserve and net income ratios – is a component in determining the financial standing of all for-profit and nonprofit institutions receiving Title IV federal aid.

Fewer than one third of institutions evaluated received a perfect score of 3.0, while 242 were deemed fiscally irresponsible. The test labeled more than 100 other schools borderline and will require them to file additional reports with the department.

“We are pleased with the score,” Executive Vice President and Treasurer Lou Katz said. “It is a high priority for our University to maintain strong financial results, controls and stewardship of its resources, which we continue to do each year.”

Financial documents that disclose expenses, debt and assets are evaluated by department officials to calculate the scores.

“It’s also important to note that a key driver to our financial health is GW’s continuing focus on liquidity, financial performance and financial management,” Katz said.

Katz emphasized the importance of taking out loans based on market conditions, not when the University needs to fund a project.

The University’s debt peaked at $1.1 billion last year, after borrowing $50 million in the summer of 2010.

The Department of Education also evaluates other financial indicators, including cash flow and timely debt repayment. The score is not an indicator of academic quality, according to the Department of Education website.

American University and Syracuse University both received perfect scores, with Boston University coming close at 2.9. Tulane University received a 2.5 on the scale, and New York and Georgetown universities each received a 2.1.

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