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The Daily Wildcat

 

UA lays out financial crisis steps; Layoffs and budget cuts to come

University+of+Arizona+Interim+Chief+Financial+Officer+John+Arnold+talks+to+a+crowd+of+faculty+and+press+at+HSIB+on+the+UA+campus+Monday%2C+Jan.+29.+Arnold+laid+out+what+went+wrong+with+the+UA+budget+and+what+the+university+will+do+to+rectify+the+situation.+%0A
Nathanial Stenchever
University of Arizona Interim Chief Financial Officer John Arnold talks to a crowd of faculty and press at HSIB on the UA campus Monday, Jan. 29. Arnold laid out what went wrong with the UA budget and what the university will do to rectify the situation.

University of Arizona President Dr. Robert C. Robbins held a press conference Monday, Jan. 29, to discuss the school’s financial crisis and updates on the plan to fix it, including possible budget cuts and layoffs.

John Arnold, the Arizona Board of Regents executive director and the UA’s interim chief financial officer, said the financial deficit is fixable. He expects to see a net positive out of the university in anywhere from 18-36 months. 

Current plans

Arnold said the UA has begun slowing down spending with a hiring freeze, a compensation freeze, a procurement freeze and by putting travel restrictions in place. 

All freezes are expected to be “lifted in June after we get a handle on things,” Arnold said. 

Other steps the UA will be taking to fix the deficit are modernizing “athletics operations,” improving the UA Global Campus, reducing administration at the university and correcting college and division budgets

Every department was told to prepare 5%, 10% and 15% downsizing plans so the UA can better understand how individual colleges could run and whether or not they would be more efficient with less staff. 

Arnold also said Robbins asked him personally to figure out which vice president roles across the university are actually needed.

The school will also look into other ways to bring in money, including figuring out how to optimize summer and winter breaks.

Arnold also reiterated several actions the UA will avoid taking during this period of fixing the deficit. According to him, the UA will not:

  • Reduce need-based aid for Arizona resident students
  • Reduce need and merit-based aid for any current or accepted students throughout their time at the university
  • Eliminate tuition guarantees for any current or accepted students 
  • Institute furloughs 
  • Reduce or eliminate retirement benefits for faculty and staff

Arnold said the Arizona Board of Regents plans to pay for two consulting agencies to come in and take a look at university finances as well as athletic finances to help with the modernization of the department. This comes after Arizona Gov. Katie Hobbs criticized the UA and the Board of Regents for their handling of the financial crisis. Along with calling for accountability, Hobbs said the university and the board needed to hire a third party to help with fixing the deficit.

Melanie Madden, the Chair, Staff Council asks a question of President Dr. Robert C. Robbins at a forum at HSIB on the University of Arizona campus Monday, Jan. 29. Madden was one of several UA staff members who attended the forum and had questions for Robbins after John Arnold gave a presentation on the UA financial deficit.
(Nathanial Stenchever)

Accountability

With faculty and press in attendance, Robbins started off the meeting by saying he takes full responsibility for the financial deficit.

Arnold said he believes the disconnect between the colleges and the university is also to blame for the budget neglect. 

In between Robbins and Arnold answering questions, Arnold gave a presentation which explained how the UA has used three different budget models in the last 10 years. According to his presentation, the latest model the university used gave the most power to the individual colleges. 

With much of the budget in the hands of college leaders, there needed to be more oversight and communication to the central UA administration to help keep everything under control, Arnold said. However, that did not happen, according to Arnold.

Arnold said the UA has found 75% of the UA’s 81 departments went over budget this past year, with a total of $61 million over budget. 

Arnold also laid out other additional factors to why the budget was so far over. These factors are shown in the table below.

Arnold said if the UA was to stay on this track, the projection for next year would have put the UA $195 million over budget with only 70 days of cash on hand left at the end of June 2024.

Both Robbins and Arnold said the UA administration hopes to regain the trust of the community by launching a transparent process, establishing metrics that will measure how well they are doing and holding people accountable when needed. 

Another point Hobbs mentioned in her letter was the need for the university to find a permanent replacement CFO, as Arnold is only holding the position temporarily. Arnold said the current priority is fixing the financial issues quickly.


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