“Cracking the Nut,” Part 11

This post might be sub-titled “More on the semi-autonomous units and their relation to the University’s budget fiasco.”

But before I get to that issue, I’d like to address the more superficial matter of the running heading of this series. Several of my regular correspondents have suggested that “Cracking the Nut” is now less apropos since David Hopkins has resigned as President. Early on, he seemed to relish using the phrase when describing the challenges involved in reducing deficit spending. Although I would not place a bet on the cause-effect relationship, I did notice that his fondness for the phrase seemed to decline markedly after I had appropriated it. I should not have to explain to anyone who knows me even casually why I could not resist appropriating it. And, since the budget issues have scarcely been resolved following his resignation as President, and since each new development related to the budget has some of the effect of a kick to the groin, I am going to continue to use the heading for the posts in this series.

With that settled, let’s turn now to some more serious stuff.

The list of the $30 million in budget cuts being made in 2017-2018 does not include any reference whatsoever to the 19 “semi-autonomous units” (see the list immediately following this paragraph) that have accounted for somewhere between 30% and 60% of the reserves expended to cover the University’s negative cash flow over the past four years. The explanation for the non-mention of the 19 “semi-autonomous units” is that from this point forward, they are going to be required to be self-sufficient.

List of Affiliated Entities as of December, 2016

  1. Advanced Technical Intelligence Center for Human Capital Development
  2. Advratech LLC
  3. daytaOhio Holdings, Inc.
  4. Double Bowler Properties Corp.
  5. Fairborn Value Investments I LLC
  6. Fairborn Value Investments II LLC
  7. 506 East Xenia Drive, LLC
  8. Global Impact Stem Academy
  9. Grimes Street LLC
  10. Miami Valley Research Foundation
  11. National Center for Medical Readiness
  12. Regional STEM Collaboration, Inc.
  13. Research Park Capital Corp.
  14. The Wright Brothers Institute, Inc.
  15. Wright State Applied Research Corp. (WSARC)
  16. Wright State Alumni Association
  17. Wright State Physicians, Inc.
  18. Wright State Raider Aquatics, LLC
  19. Wright State University Foundation, Inc.

Self-sufficient?? This proposition is dubious for several reasons. First, we have been assured year after year that these units were not only going to become self-sufficient but that they were going to generate revenue for the University to support and to enhance its core academic mission. Second, it is unclear how most of the 19 units are going to generate any net revenue for the University. Third, the audited financial statements for WSARC make it fairly clear that it will always operate at a loss. And, lastly, it is not only difficult to explain the relationship between WSRI and WSARC, but it very difficult to track much of the expenses incurred by WSRI beyond payroll costs.

This spring, rumor had it that WSRI was going to “come close” to being revenue neutral in 2017-2018. But there are reasons for wondering whether that result is nothing more than a bookkeeping ruse.

You will recall that when the son of the former Chair of the Board of Trustees was hired by WSRI without any formal search being conducted, the rationale for that hiring was that the salary was being paid for by a grant, and positions funded by grants are exempt from the University’s usual hiring policies and procedures. (For background, see the item below.) It turned out, however, that the University was covering most if not all of the WSRI payroll and calling that subsidy a “grant.”

From the Dayton Daily News, January 4, 2017:

The Ohio Ethics Commission publicly reprimanded Michael Bridges, president of the Wright State University Board of Trustees, for his role in the hiring of his son at the University’s research arm. Ethics commission investigators found Bridges emailed his son David’s resume to two administrators and helped set up a meeting between David and Wright State Research Institute Director Dennis Andersh, who later recommended creating a new position for the trustee president’s son after interviewing him in January 2015. Michael Bridges then voted to approve David’s hiring in the same May 2015 meeting where he was voted board chairman.

The situation was further complicated early in the summer of 2016 when the Board seems to have approved a policy change by which employees of the 19 “semi-autonomous units” can be migrated directly onto the university payroll.

We know of at least five highly paid employees of two of those units who have been “transferred” into administrative units of the University proper. The total salary and benefits seems to be between $1.25 and $1.5 million, and four of those five employees were originally with WSRI.

So, the immediate question is whether WSRI is about to “come close” to breaking even simply because a significant portion of its payroll has been shuffled elsewhere within the University.

Someone seems to think that WSRI’s operating in the black is a worthwhile goal in itself. At the risk of pointing out the obvious, I doubt that anyone on the faculty gives a fig about that—except for how it impacts the broader university budget. To give a turn to a cliché, if good money is being thrown after bad, it does not matter if it is being thrown into a single hole or into several different holes—and it does not matter what names are being given to the holes.

Moreover, it is worth reiterating that WSRI has been competing with faculty for some indeterminate percentage of the actual external grants it is receiving: that is, somewhere between a third and two-thirds of those external grants now received by WSRI previously were received by or directed to faculty. So, the grant monies actually being generated by WSRI have been distorted by this circumstance, and it has forced faculty to compete not just with outside applicants, but with a semi-autonomous unit within their own university, for some research funding.

Beyond those issues, there are also some ethical questions that should be obvious with any degree of reflection. First, are the budget reductions, by unit, including the transferred payroll costs? (Do semi-autonomous units that offload employees onto WSU proper receive credit for having cut costs? If so, are the units within WSU proper receiving these employees receiving matching debits? In other words, are the offloaded postions exacerbating Wright State’s overspending problem?) Second, are employees hired according to the established policies and procedures being terminated while those hired under “grants” (a.k.a. subsidies from the University) are being continued? Third, are highly paid positions being preserved by eliminating a much larger number of lower-paying positions? And, lastly, what exactly is the justification for preserving any of the highly paid positions on University payroll if the “semi-autonomous units” were operating at a significant loss under the leadership of those individuals?

Looking at these issues more broadly, how can we be assured that the 19 “semi-autonomous unites” will now be self-supporting when, despite all of the assertions of increased transparency, the various documents released by the administration regarding the current budget-cutting reveal nothing on the current state of the semi-autonomous units’ budgets?

None of us should any longer be especially surprised by any of this, but it seems important to keep in mind how university resources have been misdirected, wasted, and hidden in pursuit of very skewed institutional priorities. As budget cuts continue to be made—and the process threatens to extend over the next several years—it seems very important that we not simply haggle over very specific targets for reductions. Instead, we need to focus on the broader issues of institutional priorities—on the many other priorities related to our core academic mission to which the wasted resources might have been directed, and might still be directed, to much more substantive effect.


Marty Kich

President, AAUP-WSU



Negotiations at a Standstill

June 6, 2017

To all BUFMs:

In January 2017, negotiations toward a new CBA began fruitfully. AAUP-WSU and the administration agreed in writing on ground rules to govern negotiations, exchanged proposals on non-economic CBA articles, began discussing them, exchanged counter-proposals on some of these, and even tentatively agreed on four such articles. Given the tenor of negotiations, we had good reason to believe that the parties would reach agreement on all non-economic articles, and we were looking forward to the exchange of economic articles on April 7as specified in the ground rules.

But suddenly, negotiations effectively ground to a halt. Indeed, in the past two months, there has been essentially no progress. During that time, the administration has replaced its chief negotiator with a labor attorney – and yet has refused to make counter-proposals on non-economic CBA articles, has not responded to our counter-proposals, and been unwilling to put economic articles on the table at all.

The reasons given by the administration for this halt are not credible, and we have no reason to expect progress anytime reasonably soon. Thus, we have asked our chapter attorney to initiate the fact-finding process specified by state law.

Shortly, we will explain what fact-finding is all about and where it may lead us. But right now, we need Bargaining Unit Faculty to continue taking visible action. Your next opportunity is to attend the Board of Trustees budget meeting on Thursday, June 8 at 8:30 am in the Student Union’s Apollo Room. Wear an AAUP-WSU t-shirt! About additional actions, please stay tuned.

For more details about this matter, please see the attached.

Thank you for your attention to this message, and thank you for supporting AAUP-WSU.

Best regards,
Marty Kich, President, AAUP-WSU


What’s Up with CBA Negotiations?

Below you will find additional details as promised in our June 6, 2017 e-mail to all BUFMs (see inset).

On January 13, 2017, the Chief Negotiators for the administration (Dr. Steven J. Berberich, Associate Provost) and AAUP- WSU (Dr. Adrian M. Corbett) signed Ground Rules to govern the negotiations toward a new CBA. Item 4 specifies, “On April 7, the parties will exchange Articles 23, 24, 26, 31, and Appendix E”. These are the so-called economic articles, i.e., those with substantial budgetary impact such as the articles on salary and benefits. As we stated in our June 6 e-mail, negotiations proceed fruitfully on non-economic articles, even concluding with tentative agreement on four of them.

April 7: Administration Misses Deadline

But on March 21, the administration notified us that it was unilaterally suspending negotiations until Dr. Curtis L. McCray (the WSU Interim President who had been appointed the previous week) was up to speed on the budget. Shortly thereafter, we learned that the administration had hired a new Chief Negotiator: Mr. Daniel J. Guttman, a labor attorney and partner with a national law firm, Baker & Hostetler LLP. The parties met on April 7, and AAUP-WSU was ready to exchange economic articles as specified by the ground rules, but the administration had none. Subsequently, Mr. Guttman informed us that the administration would be ready to resume negotiations on Friday, May 26, explaining that he too needed time to get up to speed.

May 23: Yet Another Delay

Then, on May 23, the administration or the BoT apparently changed its mind yet again. Mr. Guttman informed us that the administration would not be ready after all on May 26 for negotiations, and he indicated that negotiations might even be delayed beyond the July 1 arrival of the new President, Dr. Cheryl B. Schrader (the implication being that she too would need time to get up to speed). On May 24, we wrote Dr. McCray, Mr. Guttman, and Dr. Berberich saying, “…we do not agree to these delays in negotiations …”. In the letter we called for the administration to return to substantive negotiations by June 2nd and thus demonstrate its willingness to engage in good faith bargaining.

May 31st:  AAUP Sends Counter-Proposals to Administration

We sent Mr. Guttman counter-proposals on two non-economic articles by 1 pm on May 31st (thus honoring the 48-hour advance notice required by our ground rules) and again encouraged a return to negotiations on June 2nd, extending the deadline for receipt of any counter-proposals from the administration to midnight. After 10 pm, we received a letter from Mr. Guttman, saying that they would meet with us on June 2nd at 3 pm to discuss an early retirement incentive. The text of this early retirement incentive was neither included nor attached.

June 2:  More Of The Same from Administration

The parties did meet on June 2. (The administration brought three lawyers to that meeting: Mr. Guttman, another attorney from Baker & Hostetler LLP, and one of WSU’s two Assistant General Counsels.) However, aside from a brief conversation regarding the two counter-proposals we sent on May 31st, the administration was unwilling / unable to negotiate about any matter, save only a retirement incentive. The administration had previously sent us an early retirement “supposal”

(informal, non-binding proposal), but not until this meeting did the administration clarify that it was asking to incorporate this matter into the CBA. Repeatedly, the administration’s negotiating team stated that it was not then authorized to resume negotiations about any other CBA matters and needed instructions / directives from those to whom it reports. For this, the administration team blamed the changeovers in the WSU Presidency and WSU’s fiscal mess.

Administration Excuses Not Credible

But more than a year ago, the Board of Trustees (BoT) and administration knew that former President David Hopkins was expected to remain in office only through June 30, 2017 and that the presidential search process begun in May 2016 was not guaranteed to succeed. So, changes and uncertainty regarding the office of President are hardly new news.

Likewise, the BoT and administration have known for a long time of the fiscal crisis (though they inaccurately blamed revenue shortfalls until somewhat recently, when they finally agreed with our long-held position that overspending and mismanagement were the real culprits). In fact, in a letter to BUFMs on April 4, 2016 – over one year ago – we wrote

“…these budget issues cannot have come as a sudden surprise to anyone charged with managing the university…”.

Just nine days later, on April 13, 2016, we wrote to the BoT, stating that

[WSU has] “…experienced negative operating cash flows for the past three years. … Three consecutive years of negative operating cash flows is prima facie evidence that the administration is incompetent and that the Board of Trustees has abdicated its fiduciary responsibility.”

In the same letter, we provided a list of nine ways to reduce spending while protecting the college budgets (for, as we wrote, “instruction and research sustain the core mission of the university and are the primary source of its operating revenue.”)

So, for nearly three months, the administration negotiated with us in a productive manner about the new CBA and, to repeat, had committed in writing to exchange economic articles on April 7. But today, two months after that date, the administration has not even given us its opening position on those articles. Further, thus far it has been unwilling to return to substantive negotiations over anything else (except an early retirement incentive). The excuses – presidential turnover and budget problems – have both been known for a long time, and thus those excuses are just not credible and border on the absurd. That is especially so in light of the administration’s miraculous willingness to negotiate about a retirement incentive, which certainly has some economic implications, but nothing else – not even totally non-economic articles.

What Now?

It is still our hope that the administration will resume immediately good-faith negotiations toward a successor CBA. In that regard, the ball has been in their court for two months. However, as we stated in our June 6 e-mail, we have asked our chapter attorney to initiate the fact-finding process specified in state law. Our objective is to obtain a fair, reasonable CBA for the Bargaining Unit Faculty by any means necessary. But no matter what our attorney, Negotiating Team, and Executive Committee do, we won’t get a fair, reasonable CBA without continued visible, active support of BUFMs. Your next opportunity to act is to attend the Board of Trustees budget meeting on Thursday, June 8 at 8:30am in the Student Union’s Apollo Room. Wear an AAUP-WSU t-shirt!

About additional actions, please stay tuned.


Open Letter on Athletics Spending

Friday, June 2, 2017

To the WSU Board of Trustees, Interim President Curtis McCray, and incoming President Cheryl Schrader:


We, the undersigned faculty, are writing to express our objection to the proposed FY18 budget announced on May 19. It calls for a $1.6 million increase in budgeted spending for intercollegiate athletics but cuts to every other major spending unit, including $9.5 million in cuts to the seven core colleges and $1 million in cuts to the library (not to mention $3.9 million additional cuts to BSoM and SoPP).

Indeed, when the Board of Trustees hired Dr. McCray as interim President, “maintaining [WSU’s] core athletics programs at a NCAA Division I level” appeared in the first sentence of the first item in the list of his duties specified in his contract.

Putting athletics on a par with academics and thus before the needs of our students is disgraceful and a gross strategic blunder! It continues the misplaced priorities that have characterized WSU spending in recent years and, along with gross mismanagement, led to the present fiscal crisis.

Under normal circumstances, it would be rational to give intercollegiate athletics a realistic budget, in line with the overspending that annually has occurred. But, in this fiscal crisis, it is inexplicable—even absurd. Spending on intercollegiate athletics has typically totaled about $10 million per year; in contrast, ticket sales have generated about $300 thousand per year. Even if one includes donations and other sources, the revenue generated by athletics has been about $2 million per year—most of which is offset by the subsidies that the university must provide to the Nutter Center because athletic events generate such little revenue.

There is no evidence that intercollegiate athletics is of much interest to most of our students. After all, through their fees, they pay for two “free” tickets to each basketball game, but student attendance is chronically and woefully low. Likewise, all the empty seats at athletic events and the minuscule revenue generated by athletics demonstrate that there is little community support for our teams either.

Students come to Wright State looking for a quality education at an affordable price so that they can have rewarding careers rather than McJobs. Taxpayers expect and need the research of our faculty and students to benefit our communities and foster economic development. None of these objectives are advanced by increasing spending on intercollegiate athletics.

In closing, then, we call upon you to totally eliminate the increase budgeted for intercollegiate athletics. Instead, we propose that this $1.6 million be devoted to scholarships. That change in the proposed budget would help to stabilize enrollments and to restore our badly tarnished reputation in the community.

Martin Kich


Aaron Wolpert

Abinash Agrawal

Adrian Corbett

Alan Chesen

Allen Hunt

Alpana Sharma

Amelia Hubbard

Amir  Zadeh

Amit Sharma

Amit Sheth

Andrea Harris

Andrew Strombeck

Angela Johnson

Angie Clayton

Ann Farrell

Ann Stalter

Annette Canfield

Annette Oxindine

Anthony Evans

Arnab Shaw

Arvind Elangovan

Audrey Mcgowin

Awad Halabi

Barbara Fowler

Barbara Hopkins

Barbara Hull

Barbara Kraszpulska

Basil Naah

Betsy Witt

Bin Wang

Brady Allen

Brandy Foster

Brenda Young

Bruce Cromer

Bruce Laforse

Byron Crews

Carl Sabo

Carlos Costa

Carol Herringer

Carol Mejia-Laperle

Carol Morgan

Caroline Cao

Caroline Hillard

Carolyn Stoermer

Catherine Crowley

Chad Campbell

Charis Elliott

Charles Gulas

Chinonye Chukwu

Chris Barton

Christine Sitko

Christine Wilson

Christopher Beck

Christopher Deweese

Christopher Oldstone-Moore

Chuck Ciampaglio

Cynthia Marshall

D Miyasaki

Damaris Serrano

Dan Halm

Daniel Slilaty

Daniel Zehringer

Danielle Rante

Dave Benson

Dave Hochstein

David Bukovinsky

David Castellano

David Hall

David Seitz

Deborah Crusan

Dennis Loranger

Detrice Barry

Dorothy Alvarez

Doug Keown

Doyle Watts

Drew Swanson

Elliot Gaines

Eric Rowley

Erik Banks

Erik Potts

Frank Eguaroje

Franklin Cox

Geoffrey Owens

George Huang

Gina Oswald

Gregory Kozlowski

Gretchen Mcnamara

Guozhu Dong

Haili Du

Hank Dahlman

Hannah Chai

Heeyoung Shin

Hope Jennings

Huma Bashir

Ioana Pavel

Ion Juvina

Irena Joseph

J Bernstein

J Weinzimmer

Jackson Leung

James Carter

James Menart

James Schwartz

James Tipps

Jeannette Marchand

Jennifer Kaminski

Jerry Clark

Jerry Nelms

Jessica Barnett

Jill  Lindsey

Jim Adamitis

John Conteh

John Dickinson

John Gallagher

John Haught

John Kurokawa

John Martin

Jonas Thoms

Jonathan Varhola

Joseph Cavanaugh

Josh Ash

Josh Francis

Joshua Stomel

Judson Murray

Judy Jagger-Mescher

Judy Ribak

Karen Lahm

Karen Meyer

Kathryn Meyer

Katie Hossler

Kefu  Xue

Keke Chen

Kelly Battles

Kevin Duffy

Kim Vito

Kimberly Warrick

Kristine Scordo

Kuppuswamy Arumugam

Kwang-Jin Cho

Labib Rouhana

Lafleur Small

Lance Greene

Larry Weinstein

Lary Sanders

Laurel Monnig

Len Kenyon

Leslie Neyland

Liam Anderson

Linda Farmer

Lindsey Martin

Lisa Kenyon

Lynne Kelley

Maher Amer

Marian Kazimierczuk

Marie Thompson

Marjorie Hess

Marjorie Mclellan

Mark Verman

Marlene Stuber

Marlese Durr

Martha Antolik

Mary Coyle

Matthew Benjamin

Megan Faragher

Megan Rua

Mei Tian

Meilin Liu

Melissa Spirek

Michelle Cipriano

Michelle Metzner

Michelle Reed

Michelle Smith

Mindy Fulks

Mindy McNutt

Misty Richmond

Nancy Garner

Nathan Bowling

Nicole Richter

Noeleen Mcilvenna

Oliver Stoutner

Pam Knauertlavarnwa

Pamela Tsang

Pascal Hitzler

Paula Bubulya

Peggy Kelly

Penny Park

Pramod Kantha

Pratik Parikh

Qingbo Huang

Quan Zhong

Rachel Sturm

Raghavan Srinivasan

Rebecca Edwards

Rebecca Teed

Rick Volkers

Robert Ritzi

Robert Rubin

Ron Butcher

Rory Roberts

Roy Vice

Sarah Mcginley

Sarah Tebbens

Scott Bruce

Scott Geisel

Scott Watamaniuk

Sean  Pollock

Shannon Vaughn

Sharon Heilmann

Sharon Jones

Shelley Jagow

Sheng Li

Shengrong Cai

Sheri Stover

Sherri Sutter

Shreya Bhandari

Shulin Ju

Sirisha Naidu

Stacey Hundley

Stefan Chinov

Stephanie Davis

Stephanie Dickey

Stephanie Triplett

Steven Higgins

Stuart Mcdowell

Subhashini Ganapathy

Susan Carrafiello

Suzanne Franco

Tanvi Banerjee

Tara Hill

Tarun Goswami

Teressa Mcwilliams

Theresa Myadze

Thomas Lukowicz

Thomas Rooney

Thomas Wischgoll

Tk Prasad

Tracy Brewer

Tracy Longley-Cook

Travis Clark

Tyler Green

Valerie Stoker

Vance Saunders

Vikram Sethi

Volker Bahn

Weiwen Long

Weizhen Wang

William Romine

William Slattery

Yong Pei

Yongjun Choi

Zdravka Todorova

Zhiqiang Wu


“Cracking the Nut,” Part 10

This communication is a follow-up to our May 24 email with subject “Add your signature to this letter about the budget”. It contained a letter about spending on intercollegiate athletics (ICA) addressed to Interim President McCray, incoming President Schrader, and the members of the Board of Trustees. We asked you to respond “yes” if you supported the letter and wanted to be a signatory. If you have not endorsed it, please consider doing so asap. To endorse the letter (i.e., to become a signatory), you may respond to our May 24 e-mail or send e-mail directly to aaupwsu@gmail.com with “Yes, I want to be a signatory” in the subject or body of your message.

Well over two hundred faculty, more than one third of all BUFMs, have already become signatories. However, we have also received several e-mails suggesting that we should not be focusing singularly or even pointedly on the ICA budget.

In this communication, I would like to respond to these e-mails and also provide some additional hard data regarding expenditures on ICA.

First, the new data:  The administration released details regarding its proposed ICA spending in a document dated May 25. It confirms the $1,650,797 increase in budgeted ICA subsidy, previously announced. This increase would presumably cover the chronic over-budget spending characteristic of ICA at Wright State. But this document also shows more plainly than ever just how badly that over-budget spending has ballooned in recent years:  from somewhat over $0.5 million dollars in FY13 (the fiscal year that ended June 30, 2013) and FY14, to nearly $1 million in FY15, to $1.41 million in FY16 and an estimated $1.66 million in FY17. (See chart, attached/right). Finally, the same document shows that the grand total of actual annual subsidy received by ICU will hardly drop at all between FY17 and FY18:  about $8,505, approximately the annual “Car_Phone” allowance for one or two administrators. Ask your Dean how much better off your college would have been in FY18 had that tiny a cut been imposed on it. (See chart, attached/below)

Just to be clear, then, AAUP-WSU is asserting that an inexplicable priority is being given to ICA in the proposed cuts just announced, but it is hardly the only concern that we have about the budget–or that we have expressed over the last 18-24 months. We will shortly be distributing a communication on the fact that the 19 semi-autonomous units are not mentioned at all in the information released on May 19 regarding the $30 million in budget cuts. Are we to assume that those units have suddenly become self-supporting when for the last half-decade, they have required heavy subsidies from the university’s general revenues–with the costs amounting to at least a third of the $120 million in reserves that have vanished in a handful of years?

Last spring, an administrator stopped me in the hall and expressed some surprise at an earlier AAUP communication on the cost of ICA. She observed that when the men’s basketball team made it into to the NCAA tournament, there was “such good feeling on campus–and it seemed to last for months.” I pointed out that that was some years ago and asked rhetorically whether those months of good feeling were worth $70+ million. But then I added that, under “normal” circumstances, ICA spending would be less of a big deal, but what is very clear is that the university cannot afford to run similar deficits on a half-dozen things, none of which have produced any of the revenue or other promised benefits.

So, yes, the AAUP has a history of opposing carte blanche spending on ICA, and it is a concern shared statewide. That’s because among Ohio’s public universities engaging in Division 1 ICA, only Ohio State does not very heavily subsidize ICA. We are not anti-athletics, but we are pointedly aware that very little consideration is ever given to how that money might be spent to recruit and retain students and to enhance the academic experience. We were and still are confident that millions in annual subsidies to ICA would be better spent elsewhere; that is why our April 13, 2016 letter to the Board of Trustees stated that the administration should eliminate the subsidy over a five-year period. Nevertheless, we are as concerned about administrative bloat and the spending on other non-academic initiatives as we are about the spending on ICA. And we are concerned not simply because we would like to see faculty fairly compensated for their work but because there seems to be money for just about anything other than academics – misplaced priorities run amok.

The salaries and benefits of all teaching faculty now account on average for just over 20% of university budgets, and all expenditures on instruction are seldom more than 35% of those budgets. This past fall, the administration at WSU began citing figures that our academic support spending was among the highest per student in the state. But that calculation included administrative expenditures at the college level and below (where sadly we rank near the top in the state), as well as the creation of the duplicative service units at the college and even department levels – and it appears to have included even the spending on WSRI and WSARC as well, because spending on them is categorized as research support. So much of what has been draining money from direct spending on instruction was presented as if it were supporting instruction.

In sum, I think that this latest communication from AAUP-WSU needs to be considered in the context of our other two dozen communications on the budget over the past 15 to 18 months.

But before closing this communication, I would like to return to an earlier point.

Several weeks ago, you received a newsletter from the Ohio Conference of AAUP, summarizing John McNay’s testimony before the Ohio House on several controversial measures affecting faculty that have been inserted into the House budget bill. His testimony was about 15 minutes long, but he answered questions from legislators for another 45 minutes or so.

One of those legislators prefaced his questions with the comment that John had already established our opposition to the spending on ICA — that he did not understand how we could be so adamantly opposed to extracurricular activities when they have been shown to have such a positive impact on student engagement and performance.

This comment seems to me to reflect a broader misconception about ICA. Although the large crowds at Big Ten games might be framed as an extracurricular activity, Ohio State’s ICA is the only Division 1 program in the state that is entirely self-supporting – that is, it does not require at least $10 million or even several tens of millions of dollars in subsidies from the universities’ general funds. Almost all the teams in the Mid-American Conference (Akron, BGSU, Kent, Miami, Ohio, and Toledo) are at the bottom of the rankings for attendance at football games. So, if attending games is an extracurricular activity, it is not an especially popular one.

At several of those Ohio universities, the cost of ICA has been calculated at more than $800 per full-time student per year (roughly $625 at Wright State). In contrast, one often hears assertions about the free news coverage and other benefits of Division 1 ICA programs, but if there are studies substantiating those assertions, they are very seldom if ever cited.

The most spectacular intramural sports program in the nation could be provided to our students at a fraction of the current cost of ICA. And although it is true that some of the cost of ICA goes to scholarships provided to student athletes, administration accounts for a comparable share of the ICA budget. So, clearly, merit and need-based scholarships could be provided to twice the number of students currently on ICA-related scholarships if the revenue now spent on IC administration were simply directly to broader student scholarships.

I am not suggesting, however, that ICA must be eliminated. I am simply trying to make the case for the obvious:  when an institution is facing critical fiscal issues like ours now is, treating ICA as some sort of sacred cow is irresponsible at best. The place of ICA at our university needs some serious, thoughtful discussion. But what we have heard from the McCray administration is not appreciably different than what we have heard from the Hopkins administration:  yes, changes to ICA might be considered, but in the future. Assurances like these are very similar to the empty promises about the semi-autonomous units’ becoming self-sustaining (never mind their actually producing net revenue for the university).

Meanwhile, substantial cuts are being made in the college budgets, and while relatively few currently filled faculty positions have been eliminated, the number that have been eliminated due to attrition continues to grow. And that decline in full-time faculty positions will have very direct impacts on our students, our faculty, and the reputation of our university, particularly among prospective students.


“Cracking the Nut,” Part 9

The subtitle to this analysis might be “Following in the Money Trail to Oblivion: The Continuing Saga of Misplaced Priorities.”

I would like to thank Rudy Fichtenbaum and Jim Vance for providing the analysis and several members of our Executive Committee for providing feedback on the early drafts of this piece.

Most of the information in this article comes from the Plante Moran Audit (“the Audit”) dated October 3, 2016 and WSARC’s 990 filed for (IRS Return for Tax Exempt Organizations) for FY 2015, the latest available. While the Board and the administration have been claiming that they support transparency, they refused to release the Audit for more than six months.  The Audit covers a myriad of topics. In this article, we will try to focus somewhat narrowly on the relationship between Wright State Applied Research Institute (WSARC), the Wright State Research Institute (WSRI), and an affiliated entity, ATIC. In subsequent articles, we will present additional analyses of the findings presented in the Audit.

Let us start with the relationship between WSRI and WSARC. WSARC is a 501(c)(3); that is the Internal Revenue Service (IRS) designation for a charitable organization. WSARC is a non-profit organization that “provides contracting administration services for WSRI.” WSARC is used to obtain contracts, and then the work is performed by WSRI. According to the Audit, all labor for contracts and grants received by WSARC is provided by WSRI, and all WSRI’s employees are employees of WSU.

This is consistent with Schedule J Part III of the 990 filed for WSARC (IRS Return for Tax Exempt Organizations). This schedule shows that WSU paid compensation to four officers and 15 other key employees in FY 2015. Although the Secretary’s salary is not listed in the FY 2015 990, it was listed in the FY 2014 990, and using that number, this group of four board members (two working part-time) and 15 other key employees were paid $2.9 million, or an average of $153,525 per person, per year. WSARC’s annual costs for salary as shown as $6.9 million, but even this figure may not include benefits, payroll taxes, and other costs.

Our main story begins in the “Grant Report” section of the Audit. Here, Plante-Moran (P-M) reports that WSARC received an award for a workforce development contract with the state of Ohio. The funds for this contract came from a state appropriation of $4 million per year for four years, totaling $16 million. When P-M asked how the money was spent, WSARC could not provide any documentation, and no one in WSARC was aware of reporting requirements or stipulations as to how the money could be used.

The Audit lists ATIC (Advanced Technical Intelligence Center) as one of WSRI’s affiliated entities. ATIC received a significant amount of its funding from WSARC, much of it from the workforce development grant. P-M notes that WSARC has “limited control and/or oversight” of its payments, leaving it vulnerable to conflicts of interest, double billing, and payments at higher than market rates, especially for overhead. The last of these potential risks is particularly ironic since P-M criticized WSARC for not charging properly for overhead while at the same time paying other “affiliated entities” of the university outrageous rates for overhead.

Now ATIC had been a vendor for WSARC starting in 2012. The audit identified “four invoices [issued by ATIC to WSARC that] contained limited supporting information as well as characteristics that are typical of fictitious invoices.” Three of these were paid by early 2013 and, to summarize the Audit’s implications, seem to represent payments by WSARC for work that had not been completed (or even begun), to “help out” ATIC since ATIC was already struggling financially.

Then, in 2014, ATIC and WSARC signed a management agreement wherein all employees of ATIC became employees of WSU. Among them was Hugh Bolton, the President and CEO of ATIC, whose 2014 WSU base salary was $228,000. WSARC was left to collect money owed to WSARC from ATIC by invoicing them for labor costs including benefits, but under the management agreement was not allowed to collect overhead or G & A. WSARC’s CFO calculates that $410,000 is unrecoverable. Moreover, ATIC was past due on over $585,000 in labor costs and additionally was to be billed for $82,000 more. ($337,000 of these outstanding charges due by ATIC were already 90 days old.) What this all means is that WSU effectively started running a failing company by hiring all ATIC’s employees, when this same company owed WSU at least $1.1 million that will likely never be collected.

The Audit reports that President Hopkins justified this management agreement because he thought that ATIC was important to the community. The Audit further reports that while President Hopkins admitted it “may not have been the best financial decision, management deemed it a good strategic decision.”

But wait! It gets even worse! P-M then looked at ATIC’s 990’s and found that in 2011 Hugh Bolton, before he became a WSU employee, was paid a base salary of $249,314, incentive compensation of $72,644, and deferred compensation of $107,998, for a grand total of $429,956. In 2012, with salaries and bonuses he was paid $480,233, and finally in 2013 he received base pay, without any bonuses, of $205,416.  So, after this year with no bonuses and running a company that could not pay its bills, it must have been a relief to be put on the WSU payroll.

Finally, before the management agreement, ATIC also paid Sebaly, Shillito, & Dyer (S, S, & D) over $134,000. This is a law firm where Beverly Shillito, the Secretary of ATIC, is a partner.

While these ATIC payments to Bolton and S, S, & D were made before WSARC signed the management agreement with ATIC, and according to the Audit may have contributed to ATIC’s financial struggles, the question remains:  why was signing this agreement with a company that was struggling to stay afloat a “good strategic decision”?

Maybe the President thought this was a good strategic decision because he was being praised by the Board of Trustees while the Board approved budgets supporting an administrative spending spree, hiring administrators as if they were an endangered species, and paying them exorbitant salaries including, in many cases, outrageous stipends (not to mention reimbursements for “car phones” of as much as $8,000 annually). Why was it not clear already to the Board that these reckless expenditures did not support the University’s academic mission and were putting us on a course to insolvency, while it paid the President bonuses and deferred compensation making him more highly paid than his counterparts at UC-Berkeley and the UNC-Chapel Hill.

In late March, the Board hired an interim President at an annual salary rate of $1.2 million to “set things right.” Since then a remarkable stream of revelations has occurred. Notably, on April 7 alone, as the interim President announced a prohibition on hiring consultants, the AAUP-WSU negotiating team first met a consultant (an attorney from a huge pro-management law firm) hired to be the new chief negotiator for the administration, and this consultant announced that the administration would not be ready to continue negotiations until May 26. (Never mind the ground rules ground rules for negotiations, agreed upon in writing by both AAUP-WSU and the administration, state that the parties would exchange economic proposals on April 7.) A few days later, we learned that the university has hired another consultant, specifically a PR firm. AAUP-WSU has requested information regarding expenditures for this PR firm, for the attorney/consultant/chief negotiator, the interim president, and the president designee. We are still waiting for replies.

So, where do we stand?

First, it is now more obvious than ever before that Bargaining Unit Faculty are not responsible for the out-of-control spending spree that has led our university to the current financial and leadership crisis. In fact, this spending has illustrated what we have observed for many, many years:  the administration and Board have continued to hold fast to misplaced priorities, rather than focusing its attention and money on our university’s academic mission. So, it would be ridiculous and border on obscene to ask BUFMs and our students to “take one for the team”–to accept FEWER BUFMS to do the work or cuts in real compensation, considering inflation and the cost of health benefits. Remember that faculty’s working conditions are student learning conditions.

Second, the only viable means to avoid our “taking one for the team” is to negotiate a fair contract. Although we have a talented negotiating team, the real battle will be won or lost away from the table. The way to win and get a contract that is fair to faculty and our students is for BUFMs to overtly and publicly stand together during the negotiations. You can expect AAUP-WSU to call upon you to undertake various actions in the weeks ahead. In the meantime, REMBEMBER THE STUFF WE HAVE ALREADY ASKED YOU TO DO.


On April 15, the Dayton Daily News published an article by Max Filby titled “Audit: Underbilling, Cost Overruns Led to WSU’s Budget Woes.” The article includes the subtitle “Wright State Officials Say They Have Taken Steps to Fix the Problems.”

The article includes these comments on ATIC:


 One area agency that embodies several of the auditors’ concerns is the Advanced Technical Intelligence Center, a Fairborn-based nonprofit that partners with WSU for research and technical training. Its website says in 2016 it became a division of the Wright State Applied Research Corporation.

WSARC’s Andersh said ATIC is valuable to the university because it is accredited to handle the highest-level of top secret government information.

“It gives the university and the community access to a facility that is pretty unique in the country,” Andersh said.

But ATIC has struggled financially and in 2014 all of its employees were put on WSU’s payroll under a management agreement that had Wright State billing WSARC for the labor.

The auditors found that Wright State underbilled by at least $410,000 — money the university won’t be able to recover, according to the audit.

In addition, at the time of the audit WSARC still owed the university another $1.4 million because of payments that weren’t made, the auditors said. Andersh on Friday said about $500,000 of that total has been repaid.

ATIC’s financial struggles were known to Wright State officials, according to the audit, but the school wanted to preserve its ties to what it considered to be a community asset. “Therefore, they agreed to hire ATIC’s employees under the management agreement,” the audit says.


“Cracking the Nut,” Part 8: WSRI Continued

In response to the previous post in this series, I received a thoughtful message from a BUFM who pointed out that the “real issue” is not the number of high-salaried employees at WSRI but, instead, the failure to set up and manage WSRI and WSARC so that they might be profitable. The BUFM emphasized that most research institutes have a higher percentage of high-salaried employees than most university colleges or departments. Indeed, the BUFM suggested that the post might actually serve to create dissension among those in our bargaining unit because it highlights the wide variations in compensation among faculty in the colleges within our university.

I have no argument with anything that this correspondent has written. But the purpose of the posts in this series is not to highlight why each of the various enterprises and initiatives in which the university has “invested” large sums have been losing money rather than generating revenue. Coming up with those answers is the administration’s responsibility.

Instead, precisely because the administration has been very ambiguous even on how much it has had to subsidize these money-losing ventures, the purpose of this series is to suggest the scope of the revenues diverted from the core mission of the university and the degree to which this diversion represents very skewed institutional priorities. Yes, someone might take issue with the variations in compensation among faculty in the colleges within our university, but those variations are longstanding and exist in most universities across the United States. In striking contrast, that our university has experienced three successive years of negative cash flow is, as far as we have been able to determine, an unprecedented occurrence at a public university.

So, in this post, let’s go a step beyond the comparisons presented in the previous post and look at the highest salaries in WSRI and compare them to the highest BUFM salaries in each of the colleges with BUFMs.

The two highest paid employees of WSRI/WSARC are the chief scientist and the CEO, who earn, respectively, $374,158 and $219,501.

The highest paid BUFM in the university is the former provost, but at the moment, his salary is an outlier because it is the only BUFM salary that falls between the two highest salaries at WSRI/WSARC and because it is one of just several high salaries for BUFMs that has been calculated back from an administrative salary.

Because BUFMs on fiscal-year contracts have typically assumed administrative salaries, we have calculated all salaries to their academic-year equivalent. With that proviso in mind, and bearing in mind that the BUFM data is from April 2016, before the VRIP made it more difficult for us to track data, the highest BUFM salaries in each of the colleges were as follows:








Indeed, in terms of suggesting skewed institutional priorities, if one looks at the mean and median salaries of WSRI/WSARC employees earning more than $100,000–$144,009.31 and $122,281.12, respectively—they are higher than the highest BUFM salary in four of the seven colleges with BUFMs.

Again, we acknowledge that this is, in many ways, an exercise in comparing apples to oranges, but it does very tellingly suggest very skewed institutional priorities.


“Cracking the Nut,” Part 7: WSRI

This article in our continuing series on the budget issues at Wright State is the first of three concerning the payroll of the Wright State Research Institute (WSRI).

These articles were ready to be distributed late in the Fall semester, but because the vote of no-confidence in Dr. Robert Fyffe was in process, we postponed the distribution of these articles and a follow-up article on the Wright State Applied Research Corporation (WSARC). None of the articles has much to do with Dr. Fyffe’s performance, but because both units are now under Dr. Fyffe’s oversight and because both articles are likely to provoke a strong negative response from BUFMs, we did not wish to appear to be putting our thumb on the scale in the no-confidence vote.

Unlike WSARC, WSRI does not need to file distinct audited annual financial reports. So the only firm information that we have on the university’s expenditures on WSRI are related to payroll.

Over the last five years, 46 employees of WSRI have received salaries of $100,000 or higher. As of October 2016, 27 employees of WSRI were receiving salaries of $100,000 or higher.

Although it is in a sense comparing apples to oranges to juxtapose those numbers with BUFMs in the colleges receiving equivalent salaries, the exercise does, nonetheless, suggest a great deal about this university’s priorities.

The following list indicates the number of BUFMs earning $100,000 or higher:

  • CECS: 45 out of 88 BUFMs, or about 51% of all BUFMs.
  • CEHS: 1 out of 57 BUFMs, or less than 2% of all BUFMs (and that person, who is on a fiscal appointment, would be below $100,000, if her fiscal year salary were converted to the academic equivalent, in which case the percentage would go down to zero).
  • CoLA: 6 out of 211 BUFMs, or less than 3% of all BUFMs (and there would be only 4, if all fiscal year salaries were converted to academic equivalents, in which case the percentage would go down to a bit less than 2%).
  • CoNH: 3 out of 41 BUFMs, or about 7% of all BUFMs.
  • CoSM: 38 out of 158 BUFMs, or about 24% of all BUFMs (and there would be only 29, if all fiscal year salaries were converted to academic equivalents, in which case the percentage would go down to about 18%).
  • Lake: 1 out of 37 BUFMs, or less than 3% of all BUFMs.
  • RSCoB: 45 out of 61 BUFMs, or about 74% of all BUFMs.

More tellingly, WSRI has more employees earning salaries of $100,000 or higher than four of the seven colleges have BUFMs earning equivalent salaries, and in such a comparison, WSRI is just marginally behind CoSM.

As of April 2016, the average salary of TET BUFMs was $94,093.65, and the average salary of NTE BUFMs was $53,996.50. The average salary for instructors, or at-will NTE faculty, was $47,433.02.

So, not expectedly, the salary average for TET BUFMs is very clearly skewed by the numbers from several colleges.

Again, the next two articles in this series will also be related to WSRI.