The University of Arizona will have to enter a period of extreme austerity after its administration lost $240 million. Drastic cuts are expected, sending the faculty, the board of regents, and others into a tailspin of confusion and anger (via Associated Press):
Students and faculty members harshly criticized University of Arizona President Robert C. Robbins on Thursday over a $240 million budget shortfall that has sparked suggestions for cuts to student scholarships and instructor salaries.
The angry complaints about the financial miscalculation consumed most of the first hour of a gathering of the board of regents in Tucson, Arizona. News of the shortfall was announced two weeks ago and quickly led to calls for an external audit and accountability by university leadership.
“I do not trust the university with my well-being anymore,” Megan Wong, a student senator in the pharmacy college, told the crowded meeting. “The university has made it loud and clear that they do not care about us.”
[…]
Robbins did not directly address the criticism during the meeting but acknowledged that the university faces financial difficulties. Robbins has until Dec. 15 to give the board of regents a plan for dealing with the shortfall.
Here’s what Chief Financial Officer Lisa Rulney told the board of regents in June (via Inside Higher Ed):
“The last few months have exposed the depth of our financial vulnerabilities,” Rulney told the board at the Nov. 2 meeting, revealing the staggering financial discrepancy.
She attributed the decline partly to a flawed revenue-projection model, which exaggerated the amount of cash on hand by an estimated 30 percent. UA has since replaced the model.
“I want you to know that when I told you we were forecasting 156 days of cash on hand, I was not hiding the ball or trying to obfuscate a problem that we have at the University of Arizona,” Rulney said.
Rulney and UA president Robert Robbins also pointed to spending on strategic investments.
“We made a bet on spending money,” Robbins said. “We just overshot.”
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“Overshot”? That’s an understatement—and with a flawed projection model. Rulney isn’t even mentioned in the Associated Press report. Frankly, The State Press, the student-operated newspaper for Arizona State, probably had the best piece concerning how the University of Arizona botched the numbers, along with scores of student interviews. Everyone is worried about their future at the school:
The crisis is in the amount of "cash on hand," money and investments that can be quickly turned into cash for unexpected issues. UA should have enough cash on hand for 156 days, but the school only has enough funds for 97 days, approximately $240 million short of what is needed.
The financial model that the school uses to calculate the funds was reported to have had "miscalculations" which led UA President Robert Robbins, and Chief Financial Officer Lisa Rulney, to explain the situation the school is going through to the Arizona Board of Regents, in a meeting on Nov. 2.
"I want (the board) to know that when we were forecasting 156 days cash on hand (in June) I was not hiding the ball or trying to obfuscate a problem that we have at the University of Arizona," Rulney said. "This method that we have used for more than ten years has always been reasonably close to actuals. Unfortunately, this year it gave us an estimate that ended up being 30% over actuals."
Rulney added that "rising costs" and "inflationary increases" are outpacing its revenue gains. In order to fix and build funds, Robbins said that the school plans on pausing hiring, delaying pay raises, reshaping how the school provides financial aid for students and potentially cutting sports programs.
"There are a few units across the university that are struggling not the least of which is athletics," Robbins said. "We were always optimistic that the Big 12 is going to be the solution. It's not."
How does Lisa Rulney still have a job?
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