This past Tuesday, I joined a handful of Kutztown University faculty and students on a trip to Harrisburg for the NAACP’s “Children’s March to Save PA Public Education.” [to hear my take on the rally, check out my postmortem discussion on The Rick Smith Show]. The nice thing about going to Harrisburg is that you tend to run into folks from APSCUF (our state headquarters is just a short walk from the Capitol building) and lots of other activists from around the state. Not only do you get to network with other activists, but you tend to learn things that you might not if you weren’t there to hear it for yourself.
Shortly before I was scheduled to speak at the rally, I found out a bit of information about a recent PASSHE Board of Governors’ meeting that sent all sorts of veins popping out on my forehead. First, let me give you a little background before I drop the bomb.
Over the past couple of years our local APSCUF-KU leadership–particularly our Meet and Discuss team–has been probing Kutztown University’s books and accounting practices. When President Cevallos decided that he was going to retrench faculty this past year, we were given even greater access to the university’s financial data as required under Article 29 of our contract.
For at least two years we have been chipping away at a simple problem: how is it that Kutztown University has been in a perpetual budget crisis when it has seen a nearly 20% increase in enrollments since 2002, has seen class size explode, and has the lowest faculty cost in the State System? Every time we ask the Provost or the Administration and Finance people this question, we’re treated to rather vague explanations about “increasing costs.” But we have never been satisfied with that explanation.
Recently, former APSCUF-KU vice president and Meet and Discuss member, Ken Ehrensal, spearheaded a team that did a long-term analysis of Kutztown’s budget and expenses using publicly available PASSHE data. The key part of their analysis was that they adjusted for inflation. All of the numbers that the university has been using in their “budget presentations” have neglected to adjust for inflation, resulting in flawed data that presented a skewed picture of the university’s finances. The most striking finding of Ehrensal’s team was that the faculty salaries and instructional costs have declined by about 10% and 20% respectively since academic year 1994-1995. Put another way, the academic division of Kutztown has already taken significant cuts and is operating at a high level of efficiency already. I would encourage everyone to check out Ehrensal’s team’s full presentation here:
The analysis in “Show Us the Money!” only furthered our questions about what the administration has done with all the money. Every time we’re shown budget data including KU’s reserves — or “rainy day fund” — they appear to show that the university is, indeed, struggling financially despite HUGE cost savings over the past decade. But, I’ve had a nagging feeling that the money is somewhere and that we’ve been presented with a ruse.
Fast forward to Tuesday’s NAACP rally. We may have just opened the first major crack in that ruse. Let me cut to the chase.
At an April 6th Board of Governors’ budget meeting an Assistant Vice President for Finance presented a slide containing new budget projections based upon a 30% cut in PASSHE funding and a 10% increase in tuition. As part of that presentation the Assistant Vice President for Finance presented a slide listing all 14 PASSHE universities’ “Unrestricted Net Assets Available” and the funds needed to cover a budget gap caused by a 30% budget cut over the next two academic years.
The interesting number here is the “Unrestricted Net Assets Available” column since it represents the actual funds each university has at its disposal to spend. These funds are defined by a Board of Governors policy on “University Financial Health”. According to the policy, “Unrestricted Net Assets” are defined as follows:
Unrestricted Net Assets - This category of net assets includes funds that the Board or University trustees have designated for specific purposes, auxiliary funds, and all other funds not appropriately classified as restricted or invested in capital assets. It represents all funds over which the University can exercise discretion and may be used to meet the general financial requirements of the institutions. For the purposes of this policy, the following unencumbered unrestricted net asset designations will be included: Educational and General Activities, Life Cycle Maintenance, Retirement of Debt, and Plant. The following unrestricted net asset designations will be excluded: Educational and General Encumbrances, Plant Encumbrances, contractually required Health Care Reserves, Auxiliary net assets, and the unfunded net asset balances attributed to postretirement and compensated absence liabilities (Board of Governors Policy 2011-01).
Got that? Unrestricted Net Assets refer to “all funds over which the University can exercise discretion and may be used to meet the general financial requirements of the institutions.” In other words, these are funds that the Kutztown University administration can use to cover its costs. So, given that KU just went through retrenchment and has declared a budget crisis just about every year I’ve been here (2002), you would assume that KU would have very limited Unrestricted Net Assets, right?
Dead fracking wrong.
As it turns out (and this is where my head exploded), Kutztown University has THE [SECOND] MOST UNRESTRICTED NET ASSETS IN THE ENTIRE STATE SYSTEM. Do you want to take a stab at how much money the Kutztown University administration has at its disposal to meet its general financial requirements?
Not even close.
West Chester tops the list with $36.1 in Unrestricted Net Assets. Kutztown University has $29.1 million in Unrestricted Net Assets.
Bloomsburg University is a distant second with $20.8 million. Don’t believe me? Fine. Here’s the slide [sorry for the errors in my initial post. Thanks to Bilbo (see comments) for the assist]:
So, there you have it folks. It’s OK. Screaming out loud is a rational action at this point. I am looking forward to our next Meet and Discuss. We must never forget that this administration proceeded consciously and deliberately to close programs, retrench faculty–temporary, tenure-track, and tenured, and force all of us to question the future of our institution. And they did so crying poverty from the top of their $29 million pot of gold.
Excuse me now, I need to go throw up.