Here’s how one Ohio university got out of fiscal watch

Photo by WHIO

 

The threat of fiscal watch has been looming over Wright State University for over a year now. Since then, administrators have introduced multiple strategies to remediate the university’s budget.

Fiscal watch refers to the act of the Ohio Department of Education declaring a state of fiscal emergency on a school district. When a school enters fiscal watch, university leaders will be under close watch of the state, having to consult with the state auditor to rebalance the budget.

A school enters fiscal watch once it has had a Senate Bill 6 score of 1.75 or lower for two consecutive years. It is, however, possible for a university to exit fiscal watch once it reaches a score of 2.4 and maintains it for one year. One neighboring university was able to do just that.

Central State University, a public college in Wilberforce, Ohio, has encountered problems similar to Wright State due to financial mismanagement. Central State’s Senate Bill 6 score dropped as low as 1.0. As a result, the university entered fiscal watch in FY 2015.

Curtis Pettis, vice president for administration at Central State, said that the school’s financial troubles were largely attributed to a drop-in enrollment, challenges in the default rate, and student debt. “It was like a perfect storm,” Pettis said.

After one and a half years of remediation efforts, Central State exited fiscal watch in FY 2017. The university started the budget remediation process by implementing new methods of communication. It held town hall meetings to inform and involve the campus community and stepped up targeted marketing in the way of enrollment with the consultation of an enrollment firm.

The university was able to save $1 million in utility expenses with a $16 million energy efficiency bond which updated all energy systems, according to Pettis. That meant spending far less money on repairing outdated equipment.

Central State also introduced voluntary and involuntary furloughs and layoffs, salary reductions, universal reductions across all discretionary and operational budgets and renegotiations of every major contract, according to Pettis.

Pettis said that faculty received no increases during fiscal watch, but that no contract negotiations, salary reductions or layoffs affected them; those saving measures primarily impacted staff. Central State faculty agreed not to request salary increases while the university was on fiscal watch, Pettis said.

“We did everything we could not to impact the [university’s] academic mission,” Pettis said. “At all costs, we felt we could cut in other areas, but we did not want fiscal watch to impact the delivery of the academic enterprise to students.”

Wright State has also engaged in a number of savings measures similar to Central State’s. The university has held multiple public forums to define a new mission statement for the university moving forward. It has also stepped up its marketing in certain regions and for particular demographics.

In terms of resource expense savings, Wright State eliminated their contracted custodial services and now only use WSU custodial personnel. They have followed the same practice with their HVAC services.

Chief Business Officer Walt Branson said in an email that these measures would save over $500,000 annually. “We are doing everything we can to prevent students from being affected or noticing these changes.”

Wright State budget remediation efforts have also included renegotiating and terminating some contracts, updating policies, engaging in a strategic planning initiative, and more regularly monitoring the budget.

“There has been a lot more emphasis on monitoring and reporting; the financial governance policy allows the board of trustees to check on how the budget is doing in more regular intervals,” said WSU spokesman Seth Bauguess.

Wright State has most recently projected that its Senate Bill 6 score for FY 2018 will be 2.2. Wright State administrators and faculty have been engaged in contract negotiations and the latter is threatening to strike if the administration does not make concessions on their proposal.

Leadership of both parties in the negotiations have said that talk of a strike is still premature at this time. Wright State administration has affirmed its commitment to protecting the academic mission of its students, should the faculty go on strike.

“The university is committed to maintaining the quality of its academic programs and preserving the opportunity it provides to students to achieve their goals,” Wright State President Cheryl Schrader wrote in a public announcement.

At this time, the administration has not publicly offered a concrete plan on how it will ensure classes will continue if union faculty go on strike.