“Cracking the Nut,” Part 2

This is the second in a series of communications on what we know about the reductions to the budgets of the administrative and the academic units at Wright State.

We have still received only a very limited response on our 19 open-records requests. But the information that follows comes from our analysis of a spreadsheet summarizing the budget cuts, which has come to us through several sources. We have posted a link on the AAUP-WSU webpage for anyone who wants to download a copy of this spreadsheet. [You may also click here for pdf, or click here for Excel.]

If the administration wishes to challenge any of the data that we are presenting or any of the conclusions that we are reaching in this series of communications, we will welcome a full sharing of the data that supports those challenges.

Again, I would like to thank Rudy Fichtenbaum and Jim Vance for their work on analyzing this data. They continue to demonstrate just what indispensable assets they are to our chapter.

RECAPPING SOME BASIC POINTS ABOUT THE REDUCTIONS TO ADMINISTRATIVE UNITS

The first communication in this series focused on the reductions to administrative units.

If an administrative unit overspent its budget and hired high paid staff, it is being rewarded.

Since almost all of the administrative units overspent their budgets, the impact of the budget reductions is less severe than what it might appear to be.

In total, actual 2015 spending was 7% over what was budgeted in 2016, and the total reductions are 7.6%.

BUDGET REDUCTIONS TO THE ACADEMIC UNITS

For the colleges, as far as we can tell, the increase in FTEs play no actual role in determining budget cuts, nor does the percent by which a college’s FY 2015 actual spending exceeded its budgeted FY 2016 spending.

Overall, the colleges with BUFMs had FY 2015 spending that was 13% in excess of FY 2016 budget. The colleges with the highest percent spending over budget were CECS at 28% and CoNH at 19%. The colleges with the biggest percentage cuts were CoNH at 20% followed by CoLA at 15% and CoSM at 13%. CECS is not being cut at all; in fact, its budget is being increased by $110,819.

If one removes CECS from the calculation, since its budget is not being cut, the remaining colleges with BUFMs are being cut by 12% compared to 7.6% for the administrative units. Including CECS in the calculation, the colleges with BUFMs are being cut 10% compared to 7.6% for the administrative units. Keep in mind also that college is not synonymous with faculty. Much of the overspending in colleges may be in administrative areas. Indeed, personnel costs may account for about two-thirds of the university budget, but they account for a much higher percentage of the budgets of the individual colleges. We have already pointed out to the administration that one of the consequences of the ever-ongoing discussions related to the adoption of an RCM budgeting model has been the replication of university service units within the individual colleges and even within some larger departments.

Interestingly, it has been reported to us (but not by the central administration) that if a college chooses not to fill a position vacated by attrition, it will be credited with the entire cost of the position in calculating its reduction. But if it fills the position, the amount in excess of the new cost of the position—the amount saved—is credited to the university administration instead. So, although the administration has agreed to commit funds to replace in the coming year 20% of the BUFM positions lost through the severance package, it seems to be incentivizing deans to not make such hires.

Between FY 13 and FY 15 (actual data), BSoM took a 3% cut. But its actual FY 15 spending was still 10% over its 2016 budget. They are getting a 1% increase in 2016, and SoPP is getting a 16% increase.

The administration will probably try and spin things this way:

It cut administrative spending 8.1% from budgeted 2016 spending and 7.6% from actual FY 2015 spending.

On the other hand, in the colleges, it cut 8.3% from budgeted 2016 spending and 7.4% from actual FY 2015 spending.

But as our analysis shows, because those administrative calculations include BSoM and SoPP, the budgets of the colleges with BUFMs—i.e., the colleges that serve the largest numbers of our students—are actually being cut 10%, or by 12% if CECS is not included.

REMAINING QUESTIONS

Again, what is missing is a complete accounting of WSRI and the other 18 semi- autonomous, affiliated entities.

We hope to have more data to share on that spending shortly. Although we continue to receive information on those entities from other sources, that information is somewhat fragmented. If the administration responds our open-records requests with the complete data, we will be happy to share that. In lieu of such a response, we will share what we have, and the administration can then expend more time explaining away the data that we report instead of providing data that we have requested.

From what we do already know, it is clear that whatever the overspending has been in the academic units, it is not enough in itself to be the primary cause of the current, serious budget shortfalls—to have caused three successive years of negative cash flow.

If anything, it has continued to become clearer that absent the subsidizing of enterprises serving purposes beyond the core mission of the university, the budget issues would be much more manageable and have much less impact on the ability of our colleges to address the core mission of the university.

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“Cracking the Nut,” Part 1

This is the first in a series of communications on what we know about the reductions to the budgets of the administrative and the academic units at Wright State.

We have still received only a very limited response on our 19 open-records requests. But the information that follows comes from our analysis of a spreadsheet summarizing the budget cuts, which has come to us through several sources. We will post a link on the AAUP-WSU webpage for anyone who wants to download a copy of this spreadsheet.

If the administration wishes to challenge any of the data that we are presenting or any of the conclusions that we are reaching in this series of communications, we will welcome a full sharing of the data that supports those challenges.

I would like to thank Rudy Fichtenbaum and Jim Vance for their work on analyzing this data. They continue to demonstrate just what indispensable assets they are to our chapter.

 

SOME BASIC POINTS ABOUT THE REDUCTIONS

  1. All of the budget cuts are being made from Fiscal Year (FY)2015 actual spending, in spite of the fact that we just finished FY 2016. Thus, the data for FY 2016 is what was budgeted, not actual spending.
  1. The actual spending in FY 2015 was greater than the budget for FY 2016 by 7%.
  1. The actual spending in FY 2015 on the spreadsheet is $290.9 million (administrative plus academic) but the actual expenses from the audited financial statements (not counting depreciation, which is a non-cash expense) were $361.3 million.

Another measure of actual expenses on a cash basis comes from the cash flow statement taking payments to employees, payments for benefits, payments to suppliers and payments to scholarships and fellowships, all of which came to $362 million.

So, excluding interest payments from the calculation of expenses because the administration cannot cut interest payments, it appears that only 80% of expenses are included in the budget—that is, on the chopping block.

We cannot help but wonder what constitutes the other 20% of expenses.

 

THE BASELINES FOR THE REDUCTIONS TO ADMINISTRATIVE UNITS

Comparing the actual spending in FY 2015 to the budget for FY 2016, just about every administrative unit was well “over budget.”

  • The President was 10% over budget.
  • The sub category for the Non-Academic units in the Provost’s office was 25% over budget.
  • Moreover, the sum of all the provost categories (non-academic, libraries and CATS) was 6% over budget.
  • The VP for Enrollment Management was 35% over budget.
  • The VP for Multicultural Affairs and Community Engagement was 10% over budget
  • The VP for Research and Graduate School was 4% over budget.
  • The VP for Student Affairs was 4% over budget: this administrative unit would have been on budget except that Athletics was 6% over budget.
  • And the VP for advancement was 8% over budget.

 

HOW THE REDUCTIONS TO EACH ADMINISTRATIVE UNIT HAVE BEEN CALCULATED

The administrative cuts start with a column showing a 3.5% reduction across the board in each VP area.

Next there is a column called Personnel reduction. If the FTE change from December 30, 2012, to March 28 2016 is positive–i.e., the unit added personnel–the reduction is $86,701 times the number of FTE.

The administration claims that it added a total of 35 FTE positions between the two indicated dates. Since there are no adjunct administrators, it is likely that most of these were full-time positions. This suggests that the administration believes that, on average, each one of these administrative FTE positions costs $86,701.

This number seems low. Using the benefits rate for unclassified staff (36.4%) from the benefit rates reported on the Controller’s webpage, one can calculate that benefits cost an average of $31,559 and that implies the average salary of these hires was $55,142.

Next is a column for the “total reduction,” which in general is the sum of the 3.5% plus the personnel reduction.

But interestingly, there are some exceptions. Using the 3.5% plus personnel reduction method the reduction for the President’s budget would have been $1,872,530 a 5.5% reduction. But apparently the President’s budget took an additional reduction of $1,193,605  for a total of 9.1%.

The Provost non-academic also took an additional cut of $24,600, leading to an 8% cut. All other administrative cuts followed the formula of 3.5% plus the personnel reduction.

In percentage terms, the two biggest cuts in the administrative area is 19% for the VP for Curriculum and Instruction, which was actually under budget and 11.4% the VP for Multicultural Affairs and Community Engagement.

So, there would appear to be no correlation between being over budget and the percentage cut in the administrative areas.

In fact, by starting with a 3.5% cut from FY 2015 actual spending the administration is rewarding people who went over budget.

Also, by using an average level of compensation to make personnel cuts, they are rewarding the people who hired individuals with above average salaries.

So if an administrative unit overspent its budget and hired high paid staff, it is being rewarded.

IN TOTAL, ACTUAL 2015 SPENDING WAS 7% OVER WHAT WAS BUDGETED IN 2016 AND THE TOTAL REDUCTIONS ARE 7.6%, OR ABOUT $8.7 MILLION.

 

WHAT IS MISSING

What is missing is a complete accounting of WSRI.

There is some data on WSRI in the spreadsheet, but it is incomplete.

According to the WSRI website, WSRI has 94 employees.  If they have average compensation of $86,701 then WSRI would have a personnel budget of $8,149,894.

There is a calculation of the cumulative losses from FY12 to FY15 of $4.3 million at WSARC.

 

 

On the Costs of Intercollegiate Athletics

 

This is an excerpt of an e-mail sent to the CFO of our university by Rudy Fichtenbaum, who, in addition to serving as the President of the national AAUP, is employed an adviser to the Executive committee of our AAUP chapter at Wright State:

“When I asked about the increase in spending on athletics you reported that the increase was due to the 1% increase in salaries and that athletics was cutting back. If your idea of cutting back is that they will not overrun their budget, which includes an $8.5 million subsidy from E & G, then either I don’t understand the meaning of cuts or you are simply wrong. I thought that cuts meant that a unit would have a lower base budget. That is what is happening in the colleges and in other areas of the University. Is there one definition of cuts for academic programs, one where they get less money and have fewer faculty to teach more students, and another definition of cuts for athletics where they promise to reduce the amount by which they overspend their budget every year?

“It appears that once again the administration and the Board have chosen to mislead the University community with talk of shared sacrifice when the reality is that it is our students and the faculty and staff, you know the ones who don’t hire consultants to tell them how to do their jobs, who will suffer.

“Here are the facts from your own budget.

“Personnel costs in intercollegiate athletics are going from $3,241,115 in FY16 to $3,746,649 in FY17. I am just an economist so perhaps you can explain to me how a 1% salary increase leads to a 15.6% increase in personnel spending? Benefit spending is going up 19.2%, so that overall compensation for intercollegiate athletics is going up by 16.5%. So I guess I don’t understand your statement, at the Board meeting, that the increases in spending in athletics were due to the 1% salary increase being received by staff. What am I missing?

“It is absolutely, an outrage that the administration is cutting positions that are going to directly affect the quality of the academic programs that we offer to students while continuing to shovel money in the bottomless pit known as intercollegiate athletics. There is absolutely no evidence that spending on intercollegiate athletics increases enrollment at institutions like Wright State. After all, as the President noted, every other institution in Ohio (with the exception of Ohio State) is also [subsidizing intercollegiate athletics with millions, if not tens of millions, of dollars per year diverted from academic programs]. Unfortunately, this is good example of the prisoner’s dilemma where competition leads to sub-optimal behavior. Unfortunately no amount of wasted spending on intercollegiate athletics is going to change the demographics, which as you noted in your presentation, suggest that the number of college age students in Ohio is declining. Apparently the President’s idea of being innovative is that we do not have football and we spend money we don’t have, since the absence of football and the mismanagement of our resources appear to be what distinguishes Wright State from other institutions in Ohio.

“If you were to ask students if they would prefer that we remain in Division 1 or have their tuition lowered by an average of $600 per year I think that I know how they would vote.”

WSU Athletics Graphic 1

WSU Athletics Graphic 2

 

 

List of Open-Records Requests Submitted by AAUP-WSU to the WSU Administration

Date:      20 May 2015

To:         Steven Berberich

From:     Marty Kich, President, AAUP-WSU

Subject:  Information Request

 

AAUP-WSU requests the following information:

Unless otherwise specified in this request, when a year is mentioned, we mean a fiscal year.

  1. Copy of any reports or documents explaining the reasons for the reduction in the University’s Carnegie ranking.
  1. List of all new hires (new to Wright State University) made in the years 2011, 2012, 2013, 2014, 2015, and 2016. For each, we request the name, job title, ORGDESC, base salary, and additional income (including deferred income).
  1. List of all university employees who have a base salary of $100,000 or more in the years 2011, 2012, 2013, 2014, 2015, and 2016. For each, we request the name, job title, ORGDESC, base salary, and additional income (including deferred income).
  1. In the years 2011, 2012, 2013, 2014, 2015, and 2016, a list of the 50 university employees who received the highest total reimbursements for expenses. For each, we request the name, job title, ORGDESC, and total reimbursement.
  1. List of all persons employed by the University, excluding Bargaining Unit Faculty, in 2015-2016 whose responsibilities include advising, marketing, recruitment, retention, student support, or technical support. For each, we request the name, job title, ORGDESC, base salary, and additional income (including deferred income).
  1. List of all firms or individuals hired as consultants or lobbyists who received payments or contracts from the University in the years 2011, 2012, 2013, 2014, 2015, and 2016. For each, we request the name of the individual or firm, a description of the work it was hired to do, and the amount paid by the University.
  1. List of all firms or individuals who received payments or contracts from the University related to conducting a search in the years 2011, 2012, 2013, 2014, 2015, and 2016, with the name of the individual or firm, the position for which the search was conducted, and the amount paid by the University.
  1. List of all other external contractors who received payments or contracts from the University in the years 2011, 2012, 2013, 2014, 2015, and 2016 for goods or services not routinely provided to the University, with the name of the firm, a description of the goods or services that it was hired to provide, and the amount paid by the University.
  1. A list of all semi-autonomous or affiliated units related to Wright State University such as Double Bowler and WSRI, with the grants and loans provided by the University to each unit from its creation to the present, the revenue generated by the unit (if any) and transferred back to the University in each year, and the annual number of employees and total payroll in each year for each unit.
  1. For the years 2011, 2012, 2013, 2014, 2015, and 2016, a list of the employees transferred from the semi-autonomous or affiliated units such as Double Bowler and WSRI to administrative or other departments within the University. For each, we request the name, the date on which the transfer occurred (or was effective), job title (here and subsequently, of the position into which the individual was transferred), ORGDESC, base salary, and additional income (including deferred income).
  1. For the years 2011, 2012, 2013, 2014, 2015, and 2016, a list of all university employees who did not go through the standard search process before being hired (either as a new WSU employee or a WSU employee moving into a different position) — that is, whose positions were not advertised, whose hiring was not recommended by a search committee, or whose credentials were not reviewed along with those of competing applicants. For each, we request the name, date hired, job title, ORGDESC, base salary, and additional income (including deferred income).
  1. List of the properties purchased through, purchased by, or donated to Double Bowler (or any of the other semi-autonomous or affiliated units). For each, we request the purchase price or stated value of donation, date of purchase or donation, entity that made the purchase or received that donation, its current valuation, and any mortgage liability that the University (or any of the other semi-autonomous or affiliated units) has for the property in question.
  1. List, by college, of the expenses incurred in recruiting international students, along with the revenues generated by the enrollment of such students, in 2011, 2012, 2013, 2014, 2015, and 2016.
  1. For the years 2011, 2012, 2013, 2014, 2015, and 2016, a list of employees in intercollegiate athletics. For each, we request the name, job title, ORGDESC, base salary, and additional income (including deferred income). This information request also includes severance pay.
  1. Expenses of, revenue generated by, and actual transfer of funds from the University to the Nutter Center and the Student Union for the years 2011, 2012, 2013, 2014, 2015, and 2016.
  1. Net revenue or loss generated by each of the University’s “monetized assets,” including the bookstore, dining services, and residential services, for each of the years 2011, 2012, 2013, 2014, 2015, and 2016.
  1. Copy of the accreditation team’s final report, when it is available.
  1. Copies of the reports from the federal and state agencies investigating the University, when those reports are available.
  1. Itemized list of the direct and indirect costs associated with the ongoing federal and state investigations, including legal costs, salaries and benefits of suspended employees, severance packages for former employees, consulting costs, anticipated fines and other penalties.
  1. Itemized list of the costs, whether already incurred or anticipated, associated with the University’s hosting the presidential debate. We also request an itemized list of the monies already disbursed by the University to meet those costs and the contributions actually received from entities outside of the University.

Please provide information that is available as soon as it is practicable to do so; AAUP-WSU will accept a partial response to this request without prejudice to its position that it is entitled to all documents and information requested.

Finally, AAUP-WSU reserves the right to ask for additional information, pertaining to this matter or any other matters germane to the enforcement of the CBA or negotiations of future agreements.

This request is made pursuant to Section 8.8.4 of the CBA, ORC 4117 (Public employees’ collective bargaining), ORC 149.43 (Availability of public records for inspection and copying) and ORC 9.01 (Official records – preserving and maintaining).

 

 

Statement to the Board of Trustees on April 29

Thank you for the opportunity to speak to you this morning. My name is Marty Kich, and for the past five years, I have served as the president of the Wright State chapter of the American Association of University Professors, or AAUP. The chapter represents all full-time instructional faculty within the university. I and the other members of our executive committee have a fiduciary responsibility to maintain, if not to improve, the working conditions and the opportunities for professional development of our members. In this instance, as in many others, our reason for being is completely aligned with the core mission of the university—namely, to provide high-quality educations to our students.

In the two open letters that we have sent to you on the current budgetary issues, we have, I think, very clearly defined our concerns. In particular, we are concerned about the opaque way in which the budgetary issues have been presented, starting with the fact that no one has been at all clear on exactly how large the needed budget cuts actually are. Likewise, we are concerned about the decision to address these issues at the very end of the academic year. In combination, these two circumstances have very much limited any opportunity for truly meaningful shared governance.

In the two open letters, we have also recommended a fairly large number of alternatives to making substantial reductions to the instructional budgets of the colleges. This past week, the faculty senate’s budget priority committee met to review suggestions received from about 60 faculty. The committee reduced that list to several pages of more coherently organized and succinctly expressed recommendations. Those recommendations largely reinforce the recommendations that the AAUP has made.

In essence, we believe that it is a self-defeating strategy to make reductions to the instructional budgets because doing so will certainly impact the delivery of existing academic programs and the development of new academic programs. It is a contradiction to claim to be asking for targeted cuts and to be aiming for targeted investments when the deans are essentially being given cleavers with which to do the cutting and are being told to decide what cuts to make right now.

If the increased allocations to public services, student services, and institutional support, all cost centers within the university, had been equivalent to the increases in instructional spending, the savings over the last 14 years would have amounted to $9.2 million. Moreover, beyond the $86.4 million in budget subsidy that has gone to intercollegiate athletics, over the same time period, intercollegiate athletics has had expenses in excess of revenues totaling $6.3 million with $4.3 million occurring since 2009.  It is, of course, much more difficult to make cuts after the fact than to prevent such increases to begin with. But the idea that making cuts to the instructional budgets of the colleges will somehow be less painful than reducing the allocations to the other cost centers seems a very skewed perspective. It is certainly not a faculty perspective. And it certainly will not be a student perspective when students are faced with fewer courses, fewer sections of high-demand courses, larger head counts in the courses that are offered, and less personal access to the faculty teaching those courses.

We hope that the administration and the board will take the faculty recommendations seriously enough to significantly mitigate if not eliminate the impact of any cuts on instructional budgets. But if those recommendations are largely ignored in this year’s budget, we will direct our resources over this summer and over the next academic year toward making the case for better choices to be made in next year’s budget. We simply don’t know enough to be sure whether the budgetary problems are more short-term or long-term, but we are convinced that much more attention needs to be paid to the potential long-term damage that might be caused by how the problems seem to be being addressed.”

AAUP Recommendations for Addressing the Budget Shortfalls

To the Wright State University Board of Trustees:
Although the president and provost made the case that a budget deficit needs to be addressed, they have not been very clear on the size of the deficit nor have they acknowledged any internal causes of the deficit. Instead, they have simply pointed to the reductions in state support and the constraints on adding revenue through tuition increases that have occurred under the Kasich administration.
We believe that that Wright State is indeed in the midst of a financial crisis, because we know that for the first time since the University was required to produce cash flow statements starting in 2002, it has experienced negative operating cash flows for the past three years. This means that more cash has been flowing out of the University than has been flowing into the University from the University’s operations. One year of negative operating cash flows should have set off alarms. 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.
The explanation of reductions in state support and constraints on adding tuition revenue as proximate causes of the crisis do not ring true. All of the other state universities are facing the same constraints, and yet not even Central State and the University of Akron, the only other schools in the state with SB-6 scores lower than 3.0, have had three consecutive years of negative operating cash flows. The University of Akron, which has experienced a substantial decline in enrollment, has still maintained positive operating cash flows every year. Central State had two consecutive years of negative operating cash flows in 2013 and 2014, but managed to have positive operating cash flows in 2015. It’s time for the administration and the Board to stop making excuses and come clean with the faculty, staff, students and community.
The administration speaks about a budget deficit. We know that budgets are just plans. Every year when the University presents its budget it always presents a balanced budget, despite the fact that historically the University’s revenues have exceeded its expenses. It should be obvious to everyone now that plans, especially at WSU, are probably not worth the paper they are written on. What we need is data on actual revenues and expenses, actual cash flows to date, and projections going forward.
Assuming that there is deficit that needs to be addressed and that it is in the $10 to $30 million range, we believe that its impact on the college budgets must be minimized because instruction and research sustain the core mission of the university and are the primary source of its operating revenue.
We believe that the administration should commit itself to finding savings of $25 million in the following areas:
1. The reduction, rather than the continuing multiplication, of administrative positions on all levels: A reduction in the number of associate and assistant vice presidents and provosts, associate and assistant deans, and associate and assistant chairs.
2. The reduction in the number of administrative “silos”: Administrative units with complementary functions should be consolidated if not eliminated (e.g., one recurring suggestion has been that the graduate programs can be administered by the colleges in which they are offered).
3. The elimination of stipends to administrators (other than for department chairs) who are already among the most highly paid employees of the university: Even a glance at the list of those receiving stipends reveals that there is a dramatic disparity between the stipends being paid to faculty and those being paid to administrators for additional service.
4. The reduction in the duplication of service units: Such services as marketing, recruitment, retention, advising, student support, and technical support now exist at the university level, at the college level, and increasingly at the departmental level. Worse, these service areas seem to account for many of the major expenditures on outside consultants. This duplication seems largely the result of the multiple efforts to develop a workable RCM/MDA budgeting model. To be very clear, we are not suggesting that staff should be furloughed, but we are suggesting that further duplication should be immediately halted and that the support units should be gradually and thoughtfully realigned to operate without the organizational redundancies — and, moreover, that developing the expertise that we already have in house will be much more cost-effective and advantageous to the university than hiring further consultants. (Any effort to address administrative bloat should, in our view, absolutely not start with the furloughing of support staff. But if we are going to use attrition to reduce personnel costs, then some concurrent restructuring of how support services are delivered seems very important.)
5. A moratorium on the hiring of outside consultants, search firms, and other comparable external contractors: Last year, we spent almost twice as much on just two consultants as we spent on all consultants in 2011, and the spending on consultants in 2011 represented a historic high to that point.
6. The moth-balling of some if not most of the semi-autonomous entities: Any of these entities that require university subsidies to operate–that are not producing a net profit for the university–are luxuries that we apparently cannot afford. Worse, they clearly involve significant public-relations and financial liabilities. Moreover, “moth-balling” these units should not involve absorbing salaried positions directly into the university budget.
7. Greater control of the costs associated with recruiting international students: Some of these recruitment efforts have been very successful, but others have not. Given that these efforts necessarily involve great expense, stricter protocols should be put into place to insure that the results more consistently warrant the expense.
8. The reduction of the cost of intercollegiate athletics: In 2002 the budgeted subsidy for intercollegiate athletics was $4.5 million per year. It has now grown to $8.3 million per year. In addition, there are many years in which intercollegiate athletics has overrun its budgeted subsidy. For example, in 2015, expenses exceeded revenues by almost $1 million even after the $8.3 million subsidy. The University should eliminate the $8.3 million a year subsidy for intercollegiate athletics over a period of 5 years. We can no longer afford to take money from academic programs or to continue raising tuition and fees on students to support intercollegiate athletics. However, the University should honor scholarship commitments to the athletes it has recruited so that they can finish their degrees.
9. Elimination of the deficit at the Nutter Center and the Student Union: The deficit at the Nutter Center has grown from $0.5 million in 2002 to $1.4 million. The deficit at the Student Union has grown from $1.4 million in 2002 and is now $3.3 million. The University needs to develop and implement a plan to eliminate these deficits over a three-year period.
Finally, we request that the administration and Board begin acting in a transparent manner.
Specifically, we want:
1. Clear accounting of the direct and indirect costs of the ongoing investigations: Since these issues do not involve instruction, these costs should not be covered with any reductions to any instructional budgets.
2. Clarity regarding the liabilities that we are assuming in hosting the presidential debate: If the promised outside contributions do not materialize, we should have a very clear idea of where the revenue to cover any shortfalls will be found, and they should not be from the academic programs.
3. Clarity regarding the liabilities that we have assumed with the real-estate purchased through Double Bowler: Although the creation of this entity has undoubtedly expedited the university’s acquisition of properties, it has also eliminated much of the institutional oversight that would otherwise have been given to such purchases. Since our track record with these semi-autonomous entities is dubious at best, it seems prudent to ask for some clarity of what liabilities the university may ultimately be responsible for.
4. A full and open discussion with real data before the university considers “monetizing” of university assets: The effort to plug short-term budget shortfalls should not be to the longer-term disadvantage of the institution. If the firms to which we can potentially outsource housing and parking services can make money managing those services, while paying both us and their investors, surely we can make money managing them directly.
Lastly, there should be a commitment to resolving the budget issues without making things worse for those whom we, arguably, already exploit: At the budget-remediation meeting, just about the only specific budget numbers that were shared involved overruns in the amounts budgeted university-wide for student workers, graduate-tuition remission (presumably for graduate assistants), adjunct faculty, and faculty overloads.
We are submitting open-records requests to gather supporting data, as well as gathering available data from other sources. Over the next several months, we will regularly share that data.
Marty Kich
President, AAUP-WSU
On Behalf of the Executive Committee

April 11 Open Letter to President Hopkins and the Board of Trustees

To President David Hopkins and the Wright State University Board of Trustees:

In light of what has been happening at our University, the weekly e-mails we receive from President Hopkins paint a picture that bears little resemblance to reality. The former Provost has been on paid leave for nearly a year. Now we are told there is a major budget crisis. Yet, thus far and in typical fashion, the administration has directed the deans to plan for an 8% budget cut but otherwise has not shared any substantive information.

If the administration had bothered to share financial information in a meaningful way, perhaps the alleged crisis could have been averted. Instead, the administration spent years talking about budgetary transparency and MDA (and our magnificent salt barn!) All the while, apparently none of the extraordinarily well-paid administrators was minding the store and the Board was paying no attention. Year after year, now-departed Vice President Polatajko delivered a dog and pony show in his annual budgetary presentation to the Board, reported that we were spending money on new initiatives, and gave no hint that a budgetary storm was coming. What has been the return, monetary or otherwise, on our new initiatives? Apparently, not enough to offset the supposed financial crisis that has prompted the administration to ask the Deans to submit plans for 8% cuts in their colleges.

Several million dollars have been budgeted on a branding campaign. The administration disseminated a new logo, realized it looked like the logo for a local recycling company, and withdrew it. Of course, branding is supposed to be about more than just a logo. But have there been any tangible returns on our investment? We are confident that Wright State’s reputation is at a long-time low, branding campaign notwithstanding.

Millions have been spent on a consultant, and that in turn prompted the Ohio Speaker of the House — one of our alumni no less — to announce publicly that House members should use caution when dealing with Wright State. Clearly there were negative returns for that expenditure.

Millions are spent subsidizing intercollegiate athletics, when there is no evidence that students come to Wright State for athletics. In fact, in a recent survey, playing sports was the least significant reported factor in recruitment of students. Of course, the real test would be to ask our students whether they would rather have their tuition decreased by $500 a year or keep intercollegiate athletics. Meanwhile, the administration routinely allows intercollegiate athletics to overrun its already swollen budget. If that is not bad enough, a million dollars was spent building a football field so that a few male students would have a fancy venue for their games when 58% of our students are female. To top it off, the Athletic Director was allowed to fire the men’s basketball coach, who had two years left on his contract. So now we will be paying someone else for two years for doing absolutely nothing!

Millions have been spent on stipends, which is not surprising since WSU has over thirty individuals whose title includes president or provost (e.g., vice president, associate provost) and over forty whose title includes dean, many receiving stipends in addition to their base salaries. Why do we need so many administrators, and why do many of these individuals receive stipends when they are already among the highest paid employees at the University?

The administration and the Board have taken on a multimillion dollar liability to hold a Presidential debate at Wright State. If the massive funding needed does not materialize, how many employees will have to be furloughed? How many students won’t be able to take the classes they need to graduate?

Meanwhile, faculty and students — the heart of the University — suffer the consequences for these gross failures of leadership. Even more troubling than the firing of the basketball coach, the former Provost sits at home collecting a very substantial salary, and we still don’t know whether the reasons for his suspension are only apparent misdeeds, or will actually be subject to prosecution as federal felonies, or something in between. All the while we raise tuition, and our students go deeper and deeper into debt. We admit students who we know have virtually no chance of academic success but take their money anyway, while offering almost no need-based scholarships. Our most distinguished faculty are awarded modest raises and ordered to stop printing handouts that might help those students.

It is time to come clean with the University community before we are forced to redesign our logo again to show the Wright Flyer crashing into the ground.

Very soon, you will receive recommendations from us regarding cuts in expenditures that can be made without imperiling the academic core of the University.

But in the meantime, we have questions.

Who is responsible for the alleged financial crisis, and will anyone be held accountable? What is its real magnitude? What are its causes? Is the alleged shortfall due to overly optimistic estimates of revenue, or is it simply the result of out of control expenses?

Specifically:

Even if the reported financial problems are due in part to continuing reductions in state support, why have the problems been allowed to accumulate to the point where planning for an 8% reduction in the college budgets is suddenly necessary?

How much has Wright State spent investigating the H-1B visa scandal? The investigation by the administration has dragged on for more than a year while the University’s reputation has been dragged through the mud.

Why is Wright State one of only two state universities whose audits for 2015 have yet to be posted on the Ohio Auditor’s website?

Where are the Trustees? Has the Board exercised its fiduciary responsibility at all? How many Board members have benefited from the issuance of H1-B visas or nepotism?

What is going on at WSRI? We keep seeing statements about the millions in research dollars that WSRI and our consultants are bringing into the University, and yet our Carnegie ranking has dropped and each year the University continues to provide millions of dollars to subsidize WSRI.

And to repeat questions we raised above: What returns have we realized from our new initiatives? From the branding campaign? From our expenditures on consultants? From millions poured into intercollegiate athletics? And why does WSU have so many administrators, and of them why do so many receive stipends in addition to their salaries?

The faculty demand transparency and accountability, now.

Martin Kich

President, AAUP-WSU

On Behalf of the AAUP-WSU Executive Committee