Sweeping calls for oversight of the University of Arizona’s financial crisis have reached the governor’s office as outraged faculty members are now weighing whether an outside auditor should investigate mismanagement.
Three university members told Arizona Luminaria on Tuesday that both the faculty senate and the United Campus Workers are separately seeking accountability of UA President Robert Robbins and other executives. They are now considering moving forward with external audits. Arizona Luminaria is not identifying the UA employees who spoke about the audits because they cited concerns over not being authorized to release the information.
The faculty senate may vote as soon as next week to put the call for an audit on the agenda for their next meeting.
The union — a coalition of students, faculty and staff — is meanwhile considering contracting Eastern Michigan University accounting professor Howard Bunsis to audit UA’s finances. He is the former chair of the American Association of University Professors’ Collective Bargaining Congress.
Bunsis has led similar financial audits at universities across the country. He did an audit of the UA’s finances in June 2020, finding that despite the university saying there was “an extreme financial crisis,” there was no such thing. He wrote then that “there is no need to lay off or furlough workers.”
One UA employee with knowledge of oversight efforts calling for external audits, emphasized the need for accountability.
“This is not actually a budgetary crisis. It’s a management crisis,” they said.
On Nov. 16 — amid the swell of criticism — the Arizona Board of Regents will hold their November board meeting in Tucson. Members of the public are able to attend the 1:30 p.m. meeting at the University of Arizona’s Student Union Memorial Center. Doors will open to the public thirty minutes before the meeting begins.
Update from the regents meeting
“Failure of leadership.” “Financial mismanagement.” “How dare you?” Anger and mistrust filled the room as furious faculty, students and staff addressed the Arizona Board of…Keep reading
The Arizona Board of Regents has requested a corrective action plan from the university by Dec. 15.
After UA leaders announced the current financial cliff in October, alarmed faculty members spoke out, saying they lack confidence in the university’s management.
The current fiscal year is nearly a quarter billion dollars short of projections. That deficit has left the UA with only 97 days of cash on hand, versus the 156 days that had been projected and far from the regents’ requirement of at least 140 days cash on hand.
Gary Rhoades is the director of the Educational Leadership and Policy Program at the University of Arizona, and a member of the United Campus Workers of Arizona. He is now part of a new seven-person committee called The General Faculty Financial Recalibration Committee whose purpose is to restructure the university’s spending.
Rhoades said the school’s dire financial strait is a result of the university’s administration dipping into their emergency fund for “an undisciplined pattern of spending.”
The administration took money from what is essentially the school’s reserves to pay for expenses that were destined to fail — like loaning an estimated $54 million to the school’s athletics department at the height of the pandemic, he said.
“There are maybe 5 to 10% of all athletic departments that generate any kind of net revenue,” Rhoades said. “Everywhere else is losing money. And we were one of those everyone else.”
UA professor: ‘Take responsibility’
Theodore Downing is a research professor of social development and a faculty senate member. He said the athletics department should take responsibility, especially because a chunk of their funding comes from students’ tuition.
“The athletic department has to explain why they’re immune to paying their debts,” Downing said. “Why should the students have their scholarships removed, take away their four-year promise, so they can keep playing sports?”
Another problem is the amount of merit-based aid the university offers, Rhoades said. While the increase in tuition assistance has brought more students with impressive academic standings, he said it’s not sustainable.
“Sure, who doesn’t want to have, quote, better students? But you don’t want to go broke doing it. And so we need to recalibrate,” he said.
Rhoades said the UA financial recalibration committee is working with the vice president for enrollment and has talked to the faculty senate and university president about cutting back on merit awards without touching need-based assistance.
Among the most egregious purchases, said Rhoades, was the 2020 acquisition of Ashford University, a for-profit online college, for $1.
Ashford University now operates under the name: University of Arizona Global Campus. The purchase was widely criticized publicly and heavily endorsed by the Board of Regents, which incentivized Robbins in 2022 with up to $75,000 to move the global campus forward, according to the Arizona Daily Star.
In 2020, Rhoades and other faculty members wrote a 19-page memo to the board of regents and university president in opposition of the purchase. They raised alarms about its low graduation rates, high levels of student debt, decreasing enrollment and targeting of vulnerable populations like low-income students and veterans.
Rhoades said the university’s business school, the Eller College of Management, said the deal wasn’t in the school’s financial interest.
“The Eller College faculty said this is an awful financial deal. It’s a lemon; it’s a very, very bad business deal,” Rhoades said.
Regardless of the faculty’s longstanding outcry, university executives continued spending more than it could afford with little supervision. Now, Rhoades said, the university’s administration is making staff, faculty and students pay for their financial missteps.
“Essentially, they’ve had a blank check. And they’ve overspent,” Rhoades said. Still, he believes the current dire straits are a wake-up call and there is a way forward.
“I think this kind of inflection point makes it possible that we can, like this committee is named, recalibrate,” he said.
Earlier this year, the Biden administration essentially forgave $72 million in student loans for 2,300 borrowers, many saying in lawsuits that they were cheated by Ashford University, the former for-profit college purchased by the UA.
“Ashford relied extensively on high-pressure and deceptive recruiting tactics to lure students,” said U.S. Under Secretary of Education James Kvaal in a 2023 news release. “Today we are protecting the students who were cheated by Ashford, and we will also hold the perpetrators accountable, protect taxpayers, and deter future wrongdoing.”
Many staff members and students believe the UA’s administration needs greater oversight and must rethink operations.
“We need to set up some mechanisms and guardrails so we don’t get ourselves in this situation again,” Rhoades said.
UA officials have not responded to Arizona Luminaria’s request for comment on the school’s current financial situation. The United Campus Workers of Arizona created a fact sheet on “The UArizona Mismanagement Crisis,” detailing additional figures and information
Business of higher education
Danny Clifford is a senior lecturer at the UA. He told Arizona Luminaria on Tuesday that he worries cuts will target people such as adjuncts, professors and students instead of those at the executive pay level.
Because of the “financial mismanagement,” the fallout is going to come heavily for us worker bees,” Clifford said.
Administrators in recent years have “started acting too much like a business and less like an institute of higher education,” he said.
“A poorly run business” at that, he added.
Gov. Katie Hobbs — questioning how UA leadership fell into a financial crisis with little notice for state workers and students — pointed to whether the Arizona Board of Regents has faltered in its fiduciary duties.
“I’m certainly concerned about this coming to light now and the potential lack of oversight by ABOR,” Hobbs said on Monday at an event, according to reports by Howard Fischer of Capitol Media Services.
“It’s something that we’re looking into,” she said. “This is a problem, and it certainly should have come to light sooner.”
The board of regents includes Hobbs and the superintendent of public instruction, as ex-officio members, each serving while they hold office, according to the regents’ website.
Hobbs did not respond to whether UA President Robbins should be fired. However, she warned against UA leadership placing the burden of financial problems on students.
“I think it’s important that we make college as accessible as possible for Arizonans,” she said. “I don’t think (cutting) financial aid should be the answer.”
Arizona Luminaria asked the board of regents about their auditing process, and the Audit and Risk Management Committee’s responsibilities. Officials responded only by saying that the Arizona Auditor General does an annual audit of the university.
However, the board of regents has a committee that focuses on “oversight of financial reporting, internal controls and compliance, risk assessments, and internal and external audits,” according to the board’s website.
Students face loss of aid
On Nov. 2, UA officials addressed state officials at the Arizona Board of Regents University Operations and Governance meeting. Lisa Rulney, the UA’s senior vice president for business affairs and chief financial officer, surprised the board with news of an alarming financial deficit amounting to $240 million – over three times the more than $79 million the school made in 2023.
Rulney said they’ve already cut 2% of the budget for this fiscal year, but that won’t be enough. Rulney and Regent Larry Penley suggested hiring freezes, salary cuts and a halt to salary increases.
The University of Arizona is one of Southern Arizona’s biggest employers and home to nearly 55,000 students. The University Campus Workers Union lambasted campus executives’ proposed cuts in an email on Nov. 13 to university staff.
“The Regents responded [to the budget miscalculation] with a casual disregard for our careers and livelihoods,” union officials wrote.
Rulney reported the millions lost were due to planned and unplanned “strategic investments,” among which was a hefty gamble on the school’s sports program.
“We had assumed when we use days cash on hand to support athletics that there would be an increase in revenue and it’s just not turned out to be the case,” Robbins, said at the Nov. 2 meeting.
Robbins also cited need-based aid and merit support for students as a reason for the overspending.
Gracie Kayko is a junior at the university and receives a merit tuition award. She came to the UA from Iowa and said her scholarship is the only reason she can afford to attend the Tucson college.
“Honestly, if it gets to the point where I don’t get aid I’ll have to transfer,” she said. “That’s a really scary thought that I won’t be able to continue my education if money isn’t there.”
Kayko said she receives $20,000 a year based on her high school GPA. She isn’t alone. In Fall 2023, out-of-state students made up 43.2% of the incoming class.
“Almost all my friends are from out of state and when you ask them how they got here it’s because of the financial aid,” she said.
An increase in aid was part of the school’s strategic investments and has attracted high-performing students – and their tuition money – from all over the country. But the university’s financial status could change that.
“I think that a lot of out-of-state students need to realize that before they start applying to school here,” Kayko said.
Robbins: cuts coming. Staff: UA president should sacrifice first
The Arizona Board of Regents, the governing body of the state’s three public universities, requires universities to have 140 days worth of cash on hand. Rulney’s presentation on Nov. 2 revealed that not only was the university far below that threshold the previous fiscal year – with only 110 days of cash on hand – now the school only had enough cash for 97 days.
Previously, UA officials had told regents they anticipated having 156 days of cash on hand. They have now acknowledged that was an overestimation.
Robbins told faculty on Nov. 6 that the “big miscalculation” would require “draconian cuts,” according to the Daily Star.
Faculty, staff, students, and many in the Southern Arizona community are worried about what may come.
Jeremy Bernick is a law student and the president of the Graduate and Professional Student Council, as well as a member of the faculty senate.
“I was dismayed to hear that our spending priorities were so off from our core operating mission: Educating the public and next generation,” Bernick told Arizona Luminaria Tuesday.
Asked what a potential solution may be, Clifford, the senior UA lecturer and humanities educator, said that rather than cut essential programs or scale back scholarships — which Robbins has said is a possibility — leadership needs to hold themselves accountable first for cuts.
“I’m ex-military,” Clifford said, “I believe I have a good understanding of leadership and what it means to be a leader. And often it takes sacrifice. If you’re in a position of leadership and you find you’re in distress, you step up to the plate and you should model the sacrifice that needs to happen. If there need to be financial cuts, all of those higher paid administrative positions should show some good faith and take a pay cut for a year.”
Noting the generous salaries of college sports coaches and some executive administrators, Clifford said Robbins should be first to step up and make a sacrifice.
“There are so many other places where you can trim fat other than the teachers on the front lines,” he said.
Editor’s note: Arizona Luminaria’s team includes University of Arizona student journalism interns and adjuncts. One Arizona Luminaria contributor is a UA employee.