When I read a story like the following about a college president who resigns following a bad report card (depleted $24 million in reserves over a 9 year period) I must go to the more important question: where was the board?
Generally, board policies and review inform what happens to an institution's reserves. Few CEO's/Presidents have the authority to just keep dipping. Those policies most often cite the circumstances for the dipping. Whether the President made-up the stories about the need for the money or not, it was on the board to ensure that they used their own common sense to ok the transactions.
This story should not be about the college president but instead, the volunteers who were responsible for safeguarding the overall well-being of the institution. They failed their job. They should also be resigning.
Western Conn. State University president John Clark resigns, after report on 'depleted' reserves
Western Connecticut State University’s reserves are “depleted” after officials tapped into it for more than a decade to finance operations, according to a report commissioned by the Connecticut State Colleges and Universities system.
Leigh Appleby, spokesperson for CSCU, said the system commissioned the National Center for Higher Education Management Systems, a Colorado-based education consulting agency, to conduct the review.
“NCHEMS has produced a first report with immediate recommendations, and CSCU is currently working closely with the WCSU leadership team to ensure they are implemented,” Appleby said in a statement to reporters.
Findings show that WCSU’s structural deficit essentially eliminated “all reserves at the university,” from $24 million in fiscal year 2012 to “depleted” in 2021.
WCSU’s financial woes led to the resignation of the school's president, John Clark, who will officially step down in July.
Clark’s resignation comes after the report's findings prompted a no-confidence vote against him by the faculty union.
The report also stated that WCSU was the only university whose finances had dwindled to this extent, compared with the other three state universities in the CSCU system. By contrast, two state universities have grown their reserves since the end of the Great Recession in 2009.
The reserves at Central Connecticut State University, however, dropped by a third over the same period, with much of the decline occurring prior to the pandemic.
The report found that WCSU’s expenditures were compounded by a decline in student enrollments, as well as employee costs and the impact of the pandemic. But some faculty members believe the root cause is deeper.
Economics professor Rotua Lumbantobing, who is president of the WCSU chapter of the American Association of University Professors, said the university president’s large cabinet and the lack of coordination between the president’s office and the financial office are two major problems Those problems “resulted in this outspending, pretty much, without any coordination and without knowing, ‘Hey, how much do we have actually, or is this really necessary right now.’”
Appleby of CSCU said actions have since been taken to stabilize WCSU’s budget, including creating a program for students in New York and New Jersey to attend WCSU at an in-state rate to increase enrollment.
But Lumbantobing said more needs to be done to close the budget gap.
“We can’t balance our budget that way,” said Lumbantobing.
She pointed out that stagnated state funding over the years is another roadblock. “We don’t get a lot of funding,” she said. “But we wasted a lot of money.”
The report emphasized that WCSU has an expenditure control problem, not a revenue problem, which “can be addressed by cutting costs, increasing enrollments without increasing expenditures, or some combination of these two strategies.”
“Given the immediacy of the financial issues facing the University, short-term solutions will likely have to focus on cutting costs; benefiting from enrollment increases is a longer-term remedy,” the reported stated.
For Oluwole Owoye, an economics professor at WCSU, transparency and clear communication from the university are key elements.
“If we can begin to share where we are in our finances, then everyone would be on the same page,” said Owoye. “Right now, the boat is already sunk. We want to know when the boat is floating, when the boat is sailing, and thereby we know how to strengthen the boat.”
Owoye also said that “it would be a disgrace for one of the four campuses to lose accreditation because of this. We are all here for a single purpose, and that’s for our students.”