School officials give update on budget cuts, financial plan for next year
Although Azusa Pacific found itself in a massive financial deficit last July, the school’s administration is working hard to get the school back on the right path.
Last semester, APU reduced the budget for the 2018-19 school year by $20 million dollars overall — $17 million of spending and $3 million in reduced capital investments. The university did this by freezing annual wage increases and retirement contributions, reducing travel and meal costs, decreasing capital and expenditures and taking department allocation actions.
APU also emphasized area-by-area transformational processes, evaluation of outcomes and creating financial projections for the future. Next year’s budget will be adjusted to ensure they can reinstitute the larger cuts made this year. In addition, APU will now project a financial plan, not a budget, because, as provost Mark Stanton explained in an email to faculty and staff in October, “the term budget implies that the money (resources) Are not guaranteed. A financial plan is subject to modification throughout the year based on actual income.”
How does the restructuring process work?
Back in October, Stanton visited a Student Government Association (SGA) meeting where he explained the adjustments process.
“All of the decisions are made through a sequence of events that include the operations committee, the office of the president and the president’s council, which is essentially made up of the top leaders of the institution,” Stanton said in October 2018. “We have external financial partners, a bank and bond holders that have certain expectations of us. So [regarding phase one this year] we had to act very quickly to make certain adjustments to satisfy their expectations.”
So where are we at now in the restructuring process?
In a recent statement to ZU News, Chief Financial Officer Ross Allen said he is pleased to announce APU has reached agreement with the fiscal partners on the terms of financial arrangements for this year. According to Allen, the agreement aligns with the revised fiscal plan that the leadership team created and the Board of Trustees approved in October 2018.
Stanton said that this is a positive step that provides additional time for APU to meet the debt covenants for this fiscal year.
“To be clear, this agreement requires that we must meet the terms specified by June 30, 2019, but we have a set course toward that goal based on the adjustments we have enacted,” Stanton said. “We must continue to exercise fiscal stewardship now and careful planning for next year as part of our plan for continued progress toward overall fiscal strength as a university.”
What key areas of APU are affected by the restructuring?
Academic departments
In a statement to ZU News, university spokesperson Rachel White said that to safeguard the confidentiality of the faculty impacted by these cuts who will carry out their contracts through the end of the school year, the university is not announcing which academic departments will be affected at this time.
However, the university has already closed their global studies major and study away programs like the High Sierra semester.
According to Stanton, APU is currently considering various options to reduce administration costs and focus academic areas on their academic purposes.
“Actual restructuring will involve input from the areas involved and attention to best meeting the educational needs of students in those departments,” Stanton said.
Faculty
The university eliminated about 6 percent of full-time and part-time positions for teaching faculty, according to Stanton. These eliminations included voluntary retirement, vacant positions not filled and contracts not renewed. Position eliminations were based on the fiscal viability of programs.
Stanton said in early January, each dean was tasked with completing a mid-year fiscal viability analysis of the programs in their college or school. The worksheet includes a number of data points that assess the fiscal functioning of a program. They used an analysis conducted by the Austen Group of Ruffalo Noel Levitz to provide information on the demand, cost and yield of each program in a matrix presentation. They also used comparative data from the Delaware study, as well as internal program analytics related to average class size and number of students, among other factors. Then the academic cabinet used this data to inform their decisions.
Student programs and services
The university did not provide information on the rumors about cuts to student programs or services. White said many areas, including athletics and dining services, are still under review.
“There are a number of surveys and evaluations going on as we speak regarding different areas,” White said. “We encourage students to provide feedback regarding these services through the surveys and other means that are offered to gather information. We are looking at how we provide services for our students and carefully evaluating the quality and effectiveness of our services and functions.”
Stanton reaffirmed the university’s commitment to safeguard students’ college experience during the budget reductions.
“It is our goal to minimize impact to students and their experience,” Stanton said. “The university must be good stewards of our resources. We will continually evaluate programs and departments and make changes where necessary to ensure we are making wise choices that strengthen our financial future.”
Next year
Moving forward, Stanton said that APU is currently creating a strategic plan for the upcoming 2019-20 school year.
“The university is committed to making this a collaborative process,” Stanton said. “I have invited the faculty senate, chairs council and staff council to each put forth three members who will be invited to confidential meetings to review data, including cost reductions and fiscal projections, and to provide a representative perspective on choices to be made. I will also solicit input from all faculty and staff through a survey in [the upcoming months]. The fiscal year 2020 plan goes for board review in May.”