University of Arizona President Robert Robbins announced the school’s plan to fix its financial crisis and the resignation of Vice President of Business Affairs and Chief Financial Officer, Lisa Rulney, at an Arizona Board of Regents special meeting Wednesday.
Robbins said John Arnold, the board of regents’ executive director, will fill Rulney’s position in the interim. Arnold had just finished presenting new board oversight policies when the UA president announced his new role with the university.
“This work will take some time but it will begin immediately. In fact it already has begun with a change in financial leadership at the university,” Robbins said. “Earlier today I accepted the resignation of Senior Vice President for Business Affairs and Chief Financial Officer Lisa Rulney.”
University stakeholders have been calling for Rulney’s resignation since the Nov. 2 board of regents meeting where she presented a shocking financial update, revealing that the school’s administration, which included her and Robbins, had been overspending heavily with minimal oversight.
The board of regents had set the UA’s minimum required monthly days cash on hand – a metric for the university’s reserves – to 140 days.
Rulney explained that while she had told the regents in June that the university projected having 156 days of cash on hand by the end of 2023, they only had 110. And as of that Nov. 2 meeting, they projected only 97 for 2024.
The shortage amounts to $240 million – over three times more than the $79 million the school made in 2023.
At a Dec. 5 faculty senate meeting, Rulney admitted blame but didn’t seem ready to resign.
“I take responsibility for overestimating our days cash-on-hand ratio, and the board learning about that in November. But I will continue to work on this challenge until the president asks me not to,” she said
At 5:58 p.m. Wednesday almost a thousand people had tuned into the public meeting livestream to hear the board of regents and Robbins’ response to the ongoing financial crisis.
During the presentation, Robbins announced immediate actions including hiring and compensation freezes, freezing international travel for senior administrators, purchase restrictions, halting nonessential capital projects and ending funding for strategic initiatives.
But, he said, the university will also be taking long-term steps over the next 18 months to rectify its precarious financial position.
“Cash on hand only reflects the overall health of the university’s financial situation – it’s a symptom, not the core problem,” Robbins said. “As we work to address the university’s finances we will focus on the disease and not the symptoms. The action steps I’m presenting today attack the disease.”
This includes budget reductions, delaying 2025 salary increases, reviewing all budgets, eliminating tuition guarantees for new students, implementing an entirely new budget model and “reorganizing administrative services in: IT, HR, Communications & Marketing, Business & Finance, and University Advancement.”
The public portion of the meeting started with a presentation from the board of regents on its own oversight policies.
“Today, we intend to take the first steps to turn the ship around with the University of Arizona, and to assure our campuses, and the public that this will not happen again in Tucson, or any of our state’s universities,” Board of Regents Chair Fred Duval, said.
Following words from Duval, executive director — and Rulney’s replacement — John Arnold, presented a four-step plan to improve the board’s oversight policies. Among them were more surveillance measures such as the introduction of a peer review process to evaluate all three universities’ “financial planning and analysis processes,” and more spending controls like requiring regents’ approval to spend reserve funds that would put the public university below required thresholds.
The board then voted to implement those changes.
Arnold has been the executive director of the Arizona Board of Regents since 2018. He also served as Gov. Jan Brewer’s state budget director.
Prior to Rulney’s resignation announcement, Regent Bob Herbold spoke about the need for accountability.
“I think one of the things that’s key as we go through these various initiatives is to make sure we’re focusing on individuals and holding them responsible. If things fall short, there should be implications,” he said.
Bitterness and distrust accumulated among university stakeholders in the lead up to Robbin’s final report as investigations into the mechanisms behind the shortage uncovered troubling information.
In a Dec. 5 Faculty Senate meeting, Robbins said the school was currently overspending by approximately $45 million a year and $20 million of that was due to the athletics department.
The regents gave university administrators until Dec. 15 to present a plan on how they would address the school’s financial shortfalls including cutting the annual budget and replenishing its monthly cash-on-hand reserves to meet required amounts set by the board of regents.
In the past weeks, faculty senate leaders have pleaded with Robbins to see the plan before it was presented to the board as cuts to the school’s finances will come at the expense of faculty, students and school units, including colleges and departments.
As he was presenting, an email went out to UA faculty and staff with a link to a web page called University Financial Updates and a video message from Robbins about the plan.
“It has become apparent that the president does not intend to engage shared governance in the formulation or review of the [final] report,” said Leila Hudson, a chairperson on the Faculty Senate and associate professor of Middle Eastern & North African Studies, during a Dec. 4 faculty senate meeting with administrators.
The Faculty Senate is a group of leaders that includes representatives from each college and others, such as students, who help govern the university.
At the faculty meeting, Robbins seemed open to input. “We invite you to come and join us and anybody else who wants to come in and help us because we’re gonna need everybody to help us try and go forward with a plan.”
But, according to multiple faculty senate members, they didn’t see the report until its presentation.
“We’ve not seen a draft although I’ve asked many, many times,” Hudson told Arizona Luminaria on Dec. 12, the day before Robbin’s presentation.
While she said the president has been receptive to their input, they have no way of knowing if he’ll actually include it.
“He has been, to his credit, very open to letting my general faculty committee, as of the last five days, share ideas that we hope will go into the draft,” she said.
Clarification: The University of Arizona had 110 days of cash on hand at the end of 2023. It projected it would have 97 days of cash on hand at the end of June, 2024.
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