Paul Vallas's Work for Chicago State

Given Paul Vallas’s recent firing, it seems appropriate to examine the problems he identified and the initiatives he pushed in an attempt to put this university on the right track. In my estimation, he had to be terminated because many of these issues pointed directly at individual failures in the upper administration; failures that have created or exacerbated university dysfunction. He communicated his concerns to the president and to the Board at its December meeting. Of course, this is only my interpretation draw your own conclusions from the following information, which is not exhaustive.

Vallas presented this information as a series of challenges for the University. He then detailed what progress had been made toward overcoming these challenges and offered long-term solutions. Some of the most important include:

Budget Issues and Personnel Decisions.

Challenge: “The State two-year budget impasse combined with CSU budget priorities which essentially gutted the student enrollment and retention office, emptied student financial management services, eliminated the procurement office and decimated University maintenance.”

Current status: University finances have been stabilized and the University should end the year with a healthy cash balance and solid liquidity. . . We reprioritized the FY18 budget to begin restoring investments that were decimated in student recruitment and retention, student financial services, procurement and facilities maintenance.”

Long-term solution: “A long-term budget plan needs to be developed that prioritizes specific investments in specific program areas and initiatives, existing and new, that will increase student enrollment and retention. . . Also, a financial settlement with USDoE must be reached in order to secure their approval to open Satellite Campuses described in many initiatives in this document.”

Off Campus Instructional Sites

Vallas thought the recreation of satellite campuses one of the keys to Chicago State’s potential rebound: “CSU does not currently have US Department of Education (USDoE) authority to establish Satellite Campuses because of past transgressions in improperly opening and operating such entities. Unfortunately, this problem has been largely ignored for a number of years, and if the University is to have satellite locations like most major universities in America, we will need to address this immediately. Working with the USDoE, CSU will need to secure a settlement on an estimated $1.7 million in loans taken out by students enrolled in classes offered at unapproved sites.”

He went on to write: “CSU can increase its enrollment and enhance its prestige by the establishment of Satellite Campuses. We have received invitations to establish centers at no charge at a number of sites and to offer specific programs that would be in great demand.” However, when he was terminated, no substantive action toward resolving the DoE issue had occurred.

Classroom Resources and Infrastructure

He addressed the problem of non-functional or non-existent instructional resources.

Challenge: “There has been little investment technology infrastructure and online systems to enable the University to enhance instruction and to expand University course and program offerings.”

Current status/long-term solution: “The University's plan is to lease its technology infrastructure to quickly transform the University into a technologically modern educational institution. . . . Finalize the contracts and embrace a long-term strategy of maintaining modern technology infrastructure through leasing. Complete the campus modernization plan as it pertains to the deployment of the new [classroom] technology (computers and smart boards) and equipment (printers).”

Student Financial Services

As far as student financial services, Vallas advised the Board that “Student Financial Management Services have been totally dysfunctional due to devastating cuts, the lack of procedures and training and the failure to invest in modern systems. This has resulted in a 47% default rate for Perkins (State university average in Illinois is 6%) and $15 million in in receivables not including Perkins. The large default rate will also result in an audit finding for the past fiscal year.”

Current status: “After much resistance consultants were brought on, all but one pro bono, to assess the CSU system and to develop a comprehensive plan for quickly building a modern Student Financial Management System and implementing a collection strategy to recover unpaid bills. We estimate 20-30% is recoverable.”

Long-term solution: “While delays in approving the selection of a new Director has cost us one top candidate, a new candidate has emerged with exemplary credentials with extensive experience and Banner mastery. Her leadership equipped with the strategic plan that has been developed and the tools secured will ensue the building of a modern Student Financial Management System which will serve our students much better than the disastrous system we currently have.”

Procurement

Many of the University’s financial problems stem from a non-existent procurement operation. Vallas said this: “Previous financial decision(s) eliminated the Procurement Office and decimated Payables. There has been much resistance to adding restoring resources needed to restore a functioning procurement Office and to build a modern accounts payable system.”

Status: “We have been forced to operate with a part time Procurement Director and one contracts specialist. Our recommended candidate for the Procurement Director's job withdrew following a two-month delay in securing final hiring approval and there have been delays in filling other vacancies. A selection of the new director has now been made, three months late, and there is finally approval to add two additional staff including a second contracts person. The selection of a Chief Legal Counsel for the President will also improve and expedite the process.”

Long-term: “The selection of a highly qualified procurement director and the additional staffing as well as taking full advantage of the new higher State contract threshold and taking full advantage of existing emergency contracting powers will help expedite the contracting process.”

Payables

“There is no functioning payables system and basic processes and procedures have been abandoned. Understaffed, with little training and even less accountability, this area is fraught with controversy. There are over 10,000 unreconciled open invoices and vouchers totaling $38 Million dollars recorded on the Banner financial system, of which $27 million dollars show cancel codes indicating the check or invoices were cancel but not closed on the system. In many cases invoices are re-created in duplicate or triplicate and they all are open. This process and the lack of training has created more than $10 million dollars in void and stale dated checks, evidence of duplicative payments and duplicate invoices. These issues constitute a failure to maintain a financial system (Banner) that provides assurance that expenditures are properly recorded and accounted for to prevent inaccurate financial statements.”

Current Status: “There has been resistance to investigating this area with the consultant team selected to help Mary Long improve the system and to thoroughly investigate past practices consistently thwarted. The team has developed a comprehensive strategy to catch up on more recent payables and to have the proper system in place going forward to avoid repeating past practices. The Consultant is researching and reconciling open invoices with large amounts due to Vendors that are clearly duplicate, paid, and incorrect.”

Long-term: “A detailed plan to revamp the Comptroller's Office has been developed and is absolutely essential to creating a modern and effective payables management and accountability system. It must include at the very least the hiring of at least a deputy comptroller with extensive accounting experience. The selection of a new CFO will hopefully provide critical long-term leadership in this area.”

After extensive discussions with institutions and consultation with individual faculty and staff members at CSU, Vallas created a list of 13 “strategic partnerships” that would increase the University’s educational and community presence, and which would potentially increase enrollment and revenue. To the best of my knowledge, none of these partnerships have actually been created, at least 7 have either been blocked or face substantial resistance from various University administrative offices and administrators.

So this is part of Paul Vallas’s body of work over the 9 months he served Chicago State University. This is only an overview, if anyone wants a copy of the document, e-mail me.