As you know, my first few months here were full of unexpected developments starting with the discovery that the institution\u2019s financial position was not as healthy as previously thought. We needed to act quickly and formulate an action plan for long-term financial stability.\u00a0When the new administration started in July 2019, we discovered that:<\/p>\n
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- the University would end the month with only $6.6 million in its bank accounts.<\/li>\n
- many expenditures on our campus had been under-budgeted or not budgeted.<\/li>\n
- the class recruited and retained in during fall 2018 and spring 2019 would result in an impactful enrollment drop in August (10% smaller freshman class and 5% drop in overall enrollment)<\/li>\n<\/ul>\n
The ensuing conversations and difficult financial-related decisions were unanticipated, yet wholly necessary. We have moved forward with a viable strategy approved by the Board of Governors. This strategy has started working and will continue. Any assertion that the University\u2019s financial distress is a false narrative is simply incorrect. In an effort to move forward, we will again pause our efforts to extract 大象传媒 Western from a difficult situation to provide the following\u00a0information.<\/p>\n
TRUTH #1<\/u><\/strong>.\u00a0 大象传媒 Western has taken critical steps to sustain the institution going forward.\u00a0<\/strong><\/p>\n
The progress in addressing our challenges has been impressive this year.\u00a0We appreciate everyone\u2019s efforts in this regard.\u00a0 Thank you! \u00a0Among other things, 大象传媒 Western has\u00a0been able to:<\/p>\n
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- Reverse downward trends in cash-on-hand through various actions.<\/li>\n
- Develop a long-term financial plan that focuses our limited resources on areas of strength, aligns with our core mission, supports a sustainable growth mindset and adjusts to our financial means.<\/li>\n
- Revamp our organizational structure in an effort to streamline costs and maximize efficiencies.<\/li>\n
- Engage in conservative spending across the board including hiring only essential faculty and staff and\/or combining multiple positions to achieve cost savings.<\/li>\n
- Implement innovative approaches and revenue generating ideas to increase enrollment and improve retention through new initiatives.<\/li>\n<\/ul>\n
Absent state withholdings caused by the COVID-related economic downturn, 大象传媒 Western would be approaching next year with a positive budget. The MWSU Foundation will be assisting us this coming academic year with an obtainable target of realizing surpluses in the 2021-22 academic year.<\/p>\n
TRUTH\u00a0 #2.<\/u><\/strong>\u00a0大象传媒 Western does not have hidden pots of cash.<\/strong><\/p>\n
Cash flow is the blood that keeps the heart of a university pumping. Cash is one of the most critical components to keep any institution viable.\u00a0Extracted directly from the Statement of Cash declarations in the\u00a0Board Books<\/a>\u00a0provided to the Board of Governors during public sessions, our cash-on-hand has declined considerably since 2015.<\/p>\n
![\"bar](\"https:\/\/www.missouriwestern.edu\/wilson\/wp-content\/uploads\/sites\/138\/2020\/07\/image001.gif\")
<\/p>\nAs shown by the bar graph above, 大象传媒 Western had over $28,059,064 in cash on September 30, 2015. Exactly four years later on September 30, 2019, the cash had dropped to $11,763,486. The drop in cash has created problems that 大象传媒 Western has had to address. Fortunately, our strategic approaches have started to work.<\/p>\n
TRUTH #3.<\/u><\/strong>\u00a0大象传媒 Western has a viable plan in place for the future; its financial distress is not a \u201cfalse narrative\u201d.<\/strong><\/p>\n
The current administration gains nothing personally or professionally by talking negatively about the University\u2019s financial condition. Senior leadership deemed our financial condition to be critical based on cash balances, enrollments, ongoing expenses, and other factors. Our Financial Advisory Council consisting of faculty leadership, staff leadership, student leadership, and administrators reviewed and confirmed the same based on objective data. The Board of Governors unanimously declared a state of financial distress. Our retrenchment policy required openness and discussion. Immediate adjustments were necessary to help sustain the University and enable it to survive.<\/p>\n
Even before this point, however, several other entities independently flagged the problems.<\/p>\n
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- Concerns expressed by the Higher Learning Commission in 2018.\u00a0<\/em><\/strong>On August 8, 2018, 大象传媒 Western received a warning letter from its national accreditor stating that the University\u2019s FY2017 finances had been flagged. The University\u2019s financial composite score would put the institution \u201cIn the Zone<\/em>\u201d meaning that the HLC would officially refer the institution to a Financial Panel if there were similar or declining composite scores the following year. Unfortunately, neither the new administration nor the Board of Governors was made aware of this; neither was provided with a copy of the warning letter nor fully briefed about its existence.<\/li>\n
- Staff and faculty.\u00a0<\/em><\/strong>Within the MWSU community, staff and faculty noticed significant spending before 2019. In fact, there was talk about initiating a \u201cno confidence\u201d vote in 2016. Concerns were raised about spending.<\/li>\n
- Griffon News in 2019.\u00a0<\/em><\/strong>In April 2019, the student newspaper sounded alarm bells. It reported that\u00a0MWSU had not balanced its budget since FY2013<\/a>. Drawing from official university documentation, the paper detailed overspends and deficit spending totaling over $2 million per year on average.<\/li>\n<\/ul>\n
TRUTH #4.\u00a0<\/u><\/strong>\u00a0\u00a0\u201cBalanced Budgets\u201d submitted to the board don\u2019t necessarily indicate results, they relate to plans made before the start of a fiscal year\u00a0<\/strong><\/p>\n
A balanced budget passed by the Board of Governors does not guarantee successful execution. It also does not indicate the existence of sufficient budgetary controls, accountability for overspends, or the inclusion of all planned or unplanned expenditures.<\/p>\n
Over the past decade, each year a balanced budget would be presented to the Board of Governors before the start of an academic year. However, based on publicly available information, the budgets sometimes failed to prevent overspending by the end of each year. In analyzing past budgets, it appears that the annual drops in cash on-hand were caused (at least in part) by under-budgeting, overspending, and not planning for unexpected expenditures. Realizing the need for improved budgetary processes, a revised budget had to be presented to the Board of Governors in October 2019.<\/p>\n
TRUTH #5.<\/u><\/strong>\u00a0 Total enrollment numbers\/student headcount do not equate to equal revenues\u00a0<\/strong><\/p>\n
Enrollment can be measured in a variety of ways, but it is important to remember that every student brings a different level of revenue into the university. Revenue depends on enrollment status (full-time, part-time, high school, graduate student), level of scholarships received, state of residency, background (employee\/dependent), and other factors. Here are some examples of who is\u00a0included<\/strong>\u00a0in the head count and the corresponding revenue for MWSU:<\/p>\n
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- Full-time international student living on campus: $12,500 per semester in tuition and fees<\/li>\n
- Full-time undergraduate student living at home: $4,500 per semester in tuition and fees<\/li>\n
- High school student taking a 3-credit-hour class through area high schools: $279 per semester<\/li>\n
- Golden Griffon scholar: $0 in tuition and fees<\/li>\n
- Lifelong learning student aged 65 taking an art class: $0 in tuition<\/li>\n<\/ul>\n
As you can see, full-time undergraduate students typically bring in more revenue than any other student, yet students of all types are included in our headcount. Dropping approximately 1,000 full-time undergraduate students (over 22% over the past decade) hurts our bottom line especially when tuition and fee increases cannot entirely cover the loss.<\/p>\n
It is our unwavering goal to attract and retain students. Student success and assistance on the path to graduation are key. To fully understand the financial state of any university, one should not simply rely on head count. Rather, it is critical to look at enrollment in terms of actual tuition paid, scholarship discounts awarded, and credit hours taken. Between 2008-18, the number of student credit hours (SCH) declined more than 20% from 142,768 SCH to 114,003 SCH. This represents significant loss in revenue.Many universities are experiencing these same pressures, and it is why recruitment, retention and successful completion of degrees is so important.<\/p>\n
TRUTH #6.<\/u><\/strong>\u00a0The growth of graduate programs has\u00a0not<\/u>\u00a0compensated for declines in the undergraduate programs<\/strong><\/p>\n
Graduate programs are a very small percentage of the total enrollment at MWSU (less than 3% of all credit hours). And while graduate enrollments have increased somewhat since fall 2010, this growth has been primarily fueled by part-time students, which doesn\u2019t bring in as much revenue.\u00a0 Full-time enrollment has fallen by nearly 30% in the past three years to only 67 full-time students in fall 2019. Even more significantly, because of the established tradition of awarding graduate assistant positions and other graduate scholarships, a large number of our full-time graduate students pay little in tuition.<\/p>\n
TRUTH #7.<\/u><\/strong>\u00a0 Drumming up negative local and national press has never been our goal or desire<\/strong><\/p>\n
Openness, honesty, and transparency have been hallmarks of the past year at 大象传媒 Western. These approaches can enhance trust while helping identify serious problems and formulating the measures needed to address such problems. Out of necessity, the current administration has been an open book from the start. We needed to include the campus community in important discussions about our present condition, ongoing challenges, and future direction.<\/p>\n
To date, the administration has done its best to turn its attention to the future while answering questions and proposing solutions to our current circumstances. Many (including the press) have continued to ask questions about the past. We have worked to focus on the future. Unfortunately, at least one member of our campus community has unnecessarily drawn negative attention to our campus through letters to the editor, contacts with the local media, and direct outreach to the national press with incomplete and even incorrect information. Valuable time has been wasted in this regard. In contrast, however, the administration has done its best to avoid pointing fingers or placing blame. We have done our best to keep campus in the loop through emails and town hall meetings. When asked, we have responded to questions from the press in a forward-looking manner. Based on feedback, most of our university community have expressed appreciation about this approach.<\/p>\n
TRUTH #8.<\/u><\/strong>\u00a0 Personnel spending at MWSU is trending downward<\/strong><\/p>\n
The University has engaged in conservative spending across the board, including filling only essential positions and\/or combining multiple positions to achieve cost savings. Over\u00a070 staff and administrative positions have been eliminated\/vacated over the course of the past year, while only six new positions have been added. These staffing adjustments will yield\u00a0over $5<\/strong>\u00a0million<\/strong>\u00a0in savings.<\/p>\n
- Staff and faculty.\u00a0<\/em><\/strong>Within the MWSU community, staff and faculty noticed significant spending before 2019. In fact, there was talk about initiating a \u201cno confidence\u201d vote in 2016. Concerns were raised about spending.<\/li>\n
- Concerns expressed by the Higher Learning Commission in 2018.\u00a0<\/em><\/strong>On August 8, 2018, 大象传媒 Western received a warning letter from its national accreditor stating that the University\u2019s FY2017 finances had been flagged. The University\u2019s financial composite score would put the institution \u201cIn the Zone<\/em>\u201d meaning that the HLC would officially refer the institution to a Financial Panel if there were similar or declining composite scores the following year. Unfortunately, neither the new administration nor the Board of Governors was made aware of this; neither was provided with a copy of the warning letter nor fully briefed about its existence.<\/li>\n