Government funds, COVID-19-related savings offset Southern’s pandemic expenses

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COVID-19 has caused substantial financial setbacks at numerous schools across the nation. According to a recent New York Times article, the pandemic forced American universities both large and small to make deep cuts in their budgets and has cost them at least $120 billion. Southern Adventist University, on the other hand, has been able to offset its financial losses with money received from the Coronavirus Aid Relief and Economic Security (CARES) Act, COVID-19-related savings and grants administered through the State of Tennessee, according to administrators.

Senior Vice President of Financial Administration Tom Verrill said the biggest financial impact COVID-19 had on Southern last semester was the loss of revenue from student housing fees and food service sales. That loss was especially great because Southern chose to fully refund students money they had paid for housing and food for the second half of the semester. However, Verrill said Southern received about $1.2 million from the CARES Act that could be applied to institutional expenses. So, the university used those funds to help offset the revenue lost when refunding students. Verrill added that Southern distributed an additional $1.2 million it received from the CARES Act directly to students.

Southern was also able to offset financial losses from both last semester and this semester with COVID-19-related savings. According to Associate Vice President for Financial Administration Doug Frood, the absence of normal student labor over the summer due to COVID-19 decreased expenses by $300,000 to $400,000. Frood also said costs for utilities in the final half of last semester and over the summer were about $150,000 lower, travel expenses for faculty members were between $100,000 and $250,000 lower and between $400,000 and $500,000 intended for school tours were never spent. Verrill added that Southern saved a lot of money on office equipment both last semester and over the summer.

“Nobody would wish for the pandemic to happen,” Verrill said. “But with some of those savings, we’ve been able to offset the expenses and have been able to continue functioning financially in a reasonably positive way.”

 Although Frood said the lack of traveling due to COVID-19 benefited Southern financially this year, he is concerned that it will hurt Southern’s enrollment next year because they have not been able to recruit as usual.

 “You’re used to being able to travel to places, meet a whole bunch of people and get the word out,” Frood said. “Now, you’re having to find ways of identifying those people off your website and various other means.”

However, Frood mentioned that some students who chose not to attend Southern this semester because they believed the school would shut down due to COVID-19 could possibly attend next semester and make a difference financially.

Together, Verrill and Frood listed the needlepoint bipolar ionization air purification system devices, the large outdoor tent, plexiglass, outdoor seating, technical equipment required for online instruction, Panopto programs and Zoom subscriptions as some of Southern’s COVID-19-related expenses for this semester.

The greatest COVID-19-related expense for this semester, according to Frood, was the needlepoint bipolar ionization air purification system devices, which cost approximately $550,000 and have been installed in units all over campus. Frood said Southern’s Biology department claims these devices are a huge reason why COVID-19 is not spreading, and even after the pandemic ends, the devices will continue to clean the air and prevent mold. 

The tent and chairs used for outside worship services were also a significant expense. Together, they were approximately $39,500, and the AV equipment for those services were an additional $98,960, according to Controller for Accounting Services David Huisman.

These expenses were primarily offset by two grants that Southern’s Advancement team applied for from the State of Tennessee, according to Huisman. Huisman referred to the largest grant of $591,785 as the Tennessee Community CARES Grant, and he said that most of it was used for the needlepoint bipolar ionization air purification system devices. The rest was used for the outdoor tent, chairs and AV equipment. The other grant of $186,275, referred to by Huisman as the THEC TSAC Grant, will be used to fund the McKee Library Distancing Education Classroom. Huisman said this classroom will be built off of McKee Library’s third floor and will “allow students to participate in [a] classroom instructional setting that is distanced from one another to mitigate the spread of the virus.” 

This smaller grant will also be used to fund additional COVID-19-specific temporary staffing, electrostatic sprayers and outdoor seating. The State of Tennessee administered the larger grant to be spent from March 1 to Dec. 31 and the smaller grant to be spent from Aug. 15 to Nov. 15. Verill expects Southern’s net expense on COVID-19-related issues will be around $0 because of these grants.

Frood added that the good news about most of Southern’s COVID-19-related expenses is that they are not recurring. He said that Southern might spend between $150,000 and $200,000 to pay health screeners and other health workers who do contact tracing and take care of those in quarantine and isolation next semester, but that expense will likely have a minimal impact on Southern’s total financial situation because some health screeners may have previously worked for other departments on campus and quit those positions. 

Though Southern spent a significant amount of money to help the school continue to function safely this semester, COVID-19-related savings and the grants administered by the State of Tennessee helped mitigate those expenses, administrators said.

“The good news is that we’ve spent some significant money, and I think it’s been effective. And the good news is, people who had a chance to write grants were successful,” Frood said. “I think the Lord blessed me there, and that’s a great thing. We’re in a really great spot.”

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