TUCSON, ARIZONA: University of Arizona President Dr Robert Robbins has come under fire after it was alleged that the university is 'hemorrhaging' money under his watch.
According to the Arizona Board of Regents (ABOR), the University of Arizona is currently facing financial difficulties, with the least amount of cash on hand since 2013.
The university claims that this is due to major investments that have drained its reserves, as well as some accounting mistakes.
Dr Robbins has stated that these investments, which include research funding and scholarships designed to attract students, may soon come to an end.
As part of its immediate course of action, the university may implement salary cuts and a hiring freeze.
The Regents have discussed both short-term and long-term actions that the university should consider in order to address this situation.
What were the signs coming out of the Regents’ meeting?
During the ABOR meeting held on November 2, Arizona Regent Larry Penley suggested implementing a hiring freeze and reducing salaries as the first step to address the shortfall.
Penley suggested strategies to recover from the shortage. "You're going to have to cut salaries, withhold salaries, or whatever you have to do to reclaim money," he said.
ABOR also suggested re-evaluating financial aid programs and recovering funds from individual college budgets as a long-term solution.
Penley emphasized the need to reclaim budgets from units and colleges, which may require termination of employees, suspension of purchases, or other measures.
"You're going to have to, I believe, force a reclaim of budgets on your units, on your colleges. I'm afraid you all are going to have to turn to each of your colleges and say 'We're going to have to take some percentage of your budget back,' and you're going to have to either terminate people, stop purchasing, or (do) something else."
What does University of Arizona President make of this?
The University's expenditure on strategic initiatives, as planned, is now reaching its conclusion, according to University of Arizona President Dr Robert Robbins.
He informed the regents that the university has achieved success with initiatives that offered scholarships and research funding, attracting new students.
The objective was to spend money initially to establish financially independent programs.
However, the university now faces tough decisions, particularly with the University of Arizona's tuition guarantee program. The program guarantees students' current tuition rate for four years, regardless of any potential increases.
"This 4-year-guarantee on tuition. That's a great differentiator for us, but if it's going to cost us money—which it does—then I think we've got to look," Robbins stated. "That's another hard decision."
In the media releases issued in March, the university reaffirmed that "more than 99% of current University of Arizona students will see no increase because their tuition and fees previously were frozen under the Guaranteed Tuition Program."
However, the announcement also noted a 3-4% increase in tuition for both Arizona residents and non-residents for this academic year.
Robbins stated that the school is losing money by spending on athletics.
"We had assumed when we used 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 before the Board in the November 2 meeting.
"I don't know of an athletic department in this country that's not losing money...We're always optimistic that the Big 12 is going to be the big solution. It's not. So we have to figure out the athletics side out as well," Robbins argued.
In the meeting with ABOR, Robbins expressed his confidence in the university's ability to overcome its current financial difficulties.
He cited the $83 million in revenue that the school generated this year.
The university plans to present a revised budget plan to the board of regents by Friday, December 15, which will include measures to ensure proper controls to prevent future cash shortfalls.
