According to president Peter Stoicheff, the University of Saskatchewan is in an unsustainable situation.

On Tuesday, the U of S announced its board had approved a $16.7-million deficit budget to deal with a funding shortfall from the provincial government.

It also plans a five per cent cut to salary and benefits for 75 senior leaders.

Forty staff members have applied for voluntary buyouts. The deadline for applications is at the end of June.

"Following the substantial cut in our provincial grant, we must make strategic, deliberate decisions that provide sustainable answers to the serious financial challenge we currently face," Stoicheff said in a press release. "Given our history of strong financial management, we can manage the situation in the short term, but it is not sustainable."

In March, the provincial government announced it would be cutting funding to the university by 5.6 per cent, or $18 million. As well, the province asked the university to move $20 million from its base grant to cover a funding shortfall at the College of Medicine.

The university said it is concerned that the budget cuts could put the College of Medicine's accreditation at risk. In 2015, the college was taken off probation by the Committee on Accreditation of Canadian Medical Schools.

"The assumption is, of course, that we need to do less with less," said Stoicheff. "And it is true that to an extent we will need to do exactly that. We will need to be extremely careful about hiring, about resourcing particular academic initiatives and about undertaking new, cutting-edge projects that the province needs."

In May, the university announced it would be closing down the International Centre for Northern Governance and Development due to financial constraints.

As well, 15 managers were laid off in May, many of them in facilities management.

The U of S said that approving a deficit budget gives it time to make strategic decisions about the future of the institution. Meanwhile, the university said it will be increasing fundraising efforts and will be looking to increase enrolment in certain areas.

The university said its financial reserves are significantly reduced after being used to backstop previous budgets. It also stated that colleges, schools and administrative units will be responsible for determining how they will address their respective budget issues.

Tuition has already been set for 2017-18 and will not change.