In an email to the Metro Spirit in June, an Augusta University spokesperson stated the Child Care Center was permanently closing due to the annual losses the center incurred, and those loses not being sustainable.
After reviewing the institution’s financials, it is questionable as to whether or not AU perhaps inflated the expenses to meet a desired upon result of a money losing operation.
In addition, the facility had just undergone a costly renovation, specific to the space being used as a daycare facility.
Documents provided by Augusta University reflect an operation bleeding red ink. According to the center’s P&L for the past five years, the daycare lost $149,863 in 2014, $134,139 in 2015, $103,532 in 2016, $227,501 in 2017 and $247,667 in 2018. The projected loses for 2019 are $422,991 for the operation.
The average monthly loss the daycare shows was $14,378.36, not including the much higher 2019 projected loss.
At the time the daycare was closed to address the rodent problem, there were thirty two children attending. That is a $449 per month loss per child.
The Augusta University Child Care Center had a consistent top line performance for years 2014-2016, then a drop of roughly $75,000 annually is reflected in the 2017 and 2018 numbers.
The building that housed the Child Care Center is a State of Georgia property registered under the University Systems of Georgia Board of Regents.
In 2018, the Augusta University Child Care Center had $482,608 in payroll and benefits expenses. The center’s total income for 2018 was stated to be $483,249.
That reflects a payroll that was 99.87% of revenue.
In 2018, expenses for the daycare are listed as Allocated Expenses $61,846, Contractural Services $120,230, travel $3,084, direct expenses of $34,803 and a second allocated expenses of $27,053.
With the figures not broken out any further, it is anyone’s guess what all those expenses are for. The building is owned by the state, the utilities are a separate line item of $618, so the costs being assigned to the facility appear inflated.
Beyond payroll, what could cost almost $5,000 a week to operate such a small facility?
One wonders what the expenses are for, as the daycare ran a healthy top line, operated in a paid for facility and had all the benefits of operating safely ensconced in the University system. In other words, an individual operating a daycare in a free standing structure has a lot of hidden expenses to worry about, from physical plant to insurance, county and state fees and licenses, etc.
If in fact the daycare did operate in the black with all the advantages, perhaps someone from the business school could have ambled over and taken a quick looksee at the numbers and given advice to shore up the operation?
Or perhaps it was made to look far bleaker than it actually was to provide cover to get out of the daycare business? Was it an intentional grounding?
It only matters now because there happened to be a rodent infestation and closure. The P&L’s can reflect any amount of expenses the back office wanted to assign to the operation, to tell any story needed.
Insiders wonder, with a level trend of losing money year after year, why did the University expand the Pre-K classroom space, install a complete brand new stainless-steel kitchen, and install“many green features such as super-insulated walls and automatic sensor lighting in the classrooms” over the summer, only to announce the permanent closing a few months later?
There may be more to this story than meets the eye…