While the University of Arizona community awaits a final proposal to address budget mismanagement amid a financial crisis, the school’s president has moved to allay fears over furloughs and slashing financial scholarships and retiree benefits.
President Robert Robbins said the university will not reduce need-based financial aid and any potential changes to merit-based financial aid will not affect current or accepted students.
However, he stressed that: “No decisions about any budget cuts or related issues have been made at this point,” according to a Nov. 22 email to university stakeholders.
Responding to widespread calls for accountability, including his resignation or firing, Robbins promised greater oversight.
“We continue to review the specifics that led to this point and to evaluate what changes need to be made to our processes throughout our organization to ensure financial responsibility,” he said.
The university has until Dec. 15 to present a plan to the Arizona Board of Regents on how the UA administration plans to fix the budget to curb overspending and replenish the school’s cash reserves.
Robbins emphasized that the path forward must include policies to prevent future financial shortages such as “enhanced reporting and monitoring tools that ensure timely awareness as well as accountability when overspending occurs.”
The immediate focus is to address a pattern of excessive spending from cash reserves to keep the deficit from growing, and then to replenish the university’s reserves within a “reasonable timeframe,” he said.
Robbins told faculty, staff and students that he had spoken with Board of Regents members, as well as with Gov. Katie Hobbs, following her concerns over possible financial aid cuts due to the university’s budget problems.
Hobbs had criticized the board and called for more information about how UA leadership allowed a financial crisis with little notice for state workers and students. As Arizona’s governor, Hobbs is an ex-officio regents member, serving while she holds elected office.
“I’m certainly concerned about this coming to light now and the potential lack of oversight by ABOR,” Hobbs said at an event on Nov. 13, according to reports by Howard Fischer of Capitol Media Services. “It’s something that we’re looking into. This is a problem, and it certainly should have come to light sooner.”
However, Hobbs did not respond to questions about whether Robbins should be fired.
In the Nov. 22 email, Robbins said that he “assured her (Hobbs) that our solutions will be thoughtful and sensible and will allow us to continue our investments in need-based financial aid.”
“I will continue working with shared governance partners and senior university leadership to create plans that positively impact the University’s financial situation while advancing our important education, research, and outreach mission,” he said.
Robbins said the university plans to implement more “budget controls” amid mounting concerns over the university’s spending.
Multiple faculty and student government sources have told Arizona Luminaria that they have met with Robbins and UA administrators in recent weeks to provide feedback on modifying the school’s budget.
In a Nov. 15 Strategic Planning and Budget Advisory Committee meeting, university officials, including Lisa Rulney, the UA’s chief financial officer, and Robbins, proposed possible strategies to restore cash reserves. Ideas for a fix included selling land, restructuring debt, pausing Fiscal Year 2025 salary increases, revising merit-based aid and ending tuition guarantees, according to the meeting agenda provided to Arizona Luminaria.
In early November, UA officials told the Board of Regents that they had significantly less in their reserves than the regent-mandated minimum of 140 days worth of cash on hand. The shortage equated to $240 million — more than three times the UA’s profits last fiscal year.
In the email, Robbins walked back the severity of statements he’d recently made to UA faculty about the need for “draconian” cuts. “The University is not in financial jeopardy, but new budget controls must be implemented to prevent deficit spending in the future,” he said.
Outraged faculty members who have analyzed, and spoken publicly about, UA misspending previously told Arizona Luminaria that they are weighing whether an outside auditor should investigate financial mismanagement.
Robbins said in the email that the deficit is due in part to spending on strategic initiatives that left the university with $704.5 million in reserves as of June 30, the UA’s fiscal-year end. That’s $140 million less than the prior year — and has resulted in the UA being 30 days short of the minimum that the Board of Regents’ policy requires for cash-on-hand reserves.
“The bottom line is that the Days Cash on Hand shortage is due to the fact that the University’s expenditures continue to outpace its revenue, and we’ve been making up the difference with reserves,” Robbins said.
Faculty members have criticized financial misspending that includes university administration diverting money from the school’s reserves to pay for expenses that were destined to fail — like loaning an estimated $54 million to the UA’s athletics department at the height of the pandemic.
Critics also have raised questions about UA leaders purchasing Ashford University — a for-profit online college that has come under fire from the U.S. Department of Education — against the advice of the UA’s own business college.
Arizona Luminaria has asked the Board of Regents about its auditing process and about its Audit and Risk Management Committee’s responsibilities.
Officials responded only that the Arizona Auditor General does an annual audit of the university. However, according to the board’s website, the regents’ Audit and Risk Management Committee is empowered to focus on “oversight of financial reporting, internal controls and compliance, risk assessments, and internal and external audits.”
Republish our articles for free, online or in print.
