Monday, January 25, 2016

Financial Exigency?

So loyal readers, one of the terms you are likely to hear in upcoming days is financial exigency. I thought it prudent to prepare you for what financial exigency means in practical terms for the university.

The American Association of University Professors, (AAUP) defines financial exigency in its Recommended Institutional Regulations on Academic Freedom and Tenure (RIR) as an “imminent financial crisis which threatens the survival of the institution as a whole.” In the court case  Lumpert v.University of Dubuque, the court defined financial exigency as “an urgent need to reorder the nature and magnitude of financial obligations in such a way as to restore or preserve the financial ability of the institution... “ In his 1976 Indiana Law Journal article, James Petersen states “However, it must be made clear that an exigency is more than a temporary or minor shortage.”  In practice, it’s the Board of Trustees, upon the recommendation of the President, who declare financial exigency. With this context in mind, several questions must be asked. 

First, what is the role of faculty, especially tenured faculty, in this institutional reordering? It might be assumed that there will be a need to terminate the employment of faculty and staff at an affected institution. The RIR discusses the faculty role in terminations of tenured faculty in cases of financial exigency. If an institution adheres to decades old principles and practices of shared governance then the RIR is the place to start in how to integrate faculty into the decision making process.

Second, are faculty the only group subject to termination? Clearly not. Other non-faculty positions should be considered before faculty terminations. As the faculty constitute the core of the institution they must be preserved to protect the academic enterprise. However, faculty in a unionized environment might be subject to their collective bargaining agreements being voided. That essentially leaves them with no contractual protections, save the beneficence of the administration. CSU has not had an administration in recent memory that could be considered beneficent when it came to faculty. Most recently, nickeling and diming faculty for tenths of a CUE on their year longs when it saved the university no money is but one example of their malevolent intent. Faculty and administrators must beware of what could be lost or damaged and how it would impact the long term viability of the institution. 

Third, faculty should be conscious of the impact of financial exigency on other constituencies. How will the areas that support the academic enterprise be impacted? Will payroll be adequately staffed or will there be interruptions or delays in employees being paid? Will the Registrar’s Office be adequately staffed? For those faculty who have done advising, you might recall the need to contact the Evaluations Office to ensure your students have all of the requirements completed and documented for graduation. In an office already understaffed due to the previous administration’s incompetence, any further cuts would virtually shut down that office.

Because financial exigency must be more than temporary, how would the enrollment management function be reordered? The institution should have some expectation of enrolling new students in the fall semester, yet how would prospective students be processed in an environment of financial exigency. It seems to me that non-essential personnel would need to be let go first. I’m sure loyal readers you can identify who should top that list. But be assured that just because 8-10 overpaid administration holdovers are removed, the savings netted would not be enough to close the budget gap that caused the exigent circumstances. Cuts would need to come from all areas. The unfortunate thing is that those cuts are unlikely to provide long term financial stability and the university would face closure not on March 1st, but May 15th or June 30th. 

Simply put, a declaration of financial exigency could solve a few structural and personnel problems but wouldn’t be a long term fix. Therefore, I would suggest the university forgo such a declaration and its inherent costs, monetary and human, and prepare itself for closure on March 1st, baring financial intervention from the private sector. The governor is prepared to drive the car off the cliff to spite the House Speaker. The sooner we realize that loyal readers, the easier it will be to accept it and plan for the new reality.




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