POSTED BY MARTIN KICH
This post is an edited synthesis of two communications sent to the bargaining unit faculty members (BUFMs) at Wright State University about what we know about the reductions to the budgets of the administrative and the academic units at the university. The details will probably be of little interest to faculty and staff at other universities. But the analysis may be of broader interest as an illustration of how budget figures can be presented in a statistically accurate and yet hardly transparent manner.
We have still received only a very limited response on our 19 open-records requests. But the information that follows comes from our analysis of a spreadsheet summarizing the budget cuts, which has come to us through several sources. We have posted a link on the AAUP-WSU webpage for anyone who wants to download a copy of this spreadsheet.
If the administration wishes to challenge any of the data that we are presenting or any of the conclusions that we are reaching in this series of communications, we will welcome a full sharing of the data that supports those challenges.
SOME BASIC POINTS ABOUT THE REDUCTIONS
- All of the budget cuts are being made from Fiscal Year (FY)2015 actual spending, in spite of the fact that we just finished FY 2016. Thus, the data for FY 2016 is what was budgeted, not actual spending.
- The actual spending in FY 2015 was greater than the budget for FY 2016 by 7%.
- The actual spending in FY 2015 on the spreadsheet is $290.9 million (administrative plus academic) but the actual expenses from the audited financial statements (not counting depreciation, which is a non-cash expense) were $361.3 million.
Another measure of actual expenses on a cash basis comes from the cash flow statement taking payments to employees, payments for benefits, payments to suppliers and payments to scholarships and fellowships, all of which came to $362 million.
So, excluding interest payments from the calculation of expenses because the administration cannot cut interest payments, it appears that only 80% of expenses are included in the budget—that is, on the chopping block.
We cannot help but wonder what constitutes the other 20% of expenses.
THE BASELINES FOR THE REDUCTIONS TO ADMINISTRATIVE UNITS
Comparing the actual spending in FY 2015 to the budget for FY 2016, just about every administrative unit was well “over budget.”
–The President was 10% over budget.
–The sub category for the Non-Academic units in the Provost’s office was 25% over budget.
–Moreover, the sum of all the provost categories (non-academic, libraries and CATS) was 6% over budget.
–The VP for Enrollment Management was 35% over budget.
–The VP for Multicultural Affairs and Community Engagement was 10% over budget
–The VP for Research and Graduate School was 4% over budget.
–The VP for Student Affairs was 4% over budget: this administrative unit would have been on budget except that Athletics was 6% over budget.
–And the VP for advancement was 8% over budget.
HOW THE REDUCTIONS TO EACH ADMINISTRATIVE UNIT HAVE BEEN CALCULATED
The administrative cuts start with a column showing a 3.5% reduction across the board in each VP area.
Next there is a column called Personnel reduction. If the FTE change from December 30, 2012, to March 28 2016 is positive–i.e., the unit added personnel–the reduction is $86,701 times the number of FTE.
The administration claims that it added a total of 35 FTE positions between the two indicated dates. Since there are no adjunct administrators, it is likely that most of these were full-time positions. This suggests that the administration believes that, on average, each one of these administrative FTE positions costs $86,701.
This number seems low. Using the benefits rate for unclassified staff (36.4%) from the benefit rates reported on the Controller’s webpage, one can calculate that benefits cost an average of $31,559 and that implies the average salary of these hires was $55,142.
Next is a column for the “total reduction,” which in general is the sum of the 3.5% plus the personnel reduction.
But interestingly, there are some exceptions. Using the 3.5% plus personnel reduction method the reduction for the President’s budget would have been $1,872,530 a 5.5% reduction. But apparently the President’s budget took an additional reduction of $1,193,605 for a total of 9.1%.
The Provost non-academic also took an additional cut of $24,600, leading to an 8% cut. All other administrative cuts followed the formula of 3.5% plus the personnel reduction.
In percentage terms, the two biggest cuts in the administrative area is 19% for the VP for Curriculum and Instruction, which was actually under budget and 11.4% the VP for Multicultural Affairs and Community Engagement.
So, there would appear to be no correlation between being over budget and the percentage cut in the administrative areas.
In fact, by starting with a 3.5% cut from FY 2015 actual spending the administration is rewarding people who went over budget.
Also, by using an average level of compensation to make personnel cuts, they are rewarding the people who hired individuals with above average salaries.
So if an administrative unit overspent its budget and hired high paid staff, it is being rewarded.
IN TOTAL, ACTUAL 2015 SPENDING WAS 7% OVER WHAT WAS BUDGETED IN 2016 AND THE TOTAL REDUCTIONS ARE 7.6%, OR ABOUT $8.7 MILLION.
BUDGET REDUCTIONS TO THE ACADEMIC UNITS
For the colleges, as far as we can tell, the increase in FTEs play no actual role in determining budget cuts, nor does the percent by which a college’s FY 2015 actual spending exceeded its budgeted FY 2016 spending.
Overall, the colleges with BUFMs had FY 2015 spending that was 13% in excess of FY 2016 budget. The colleges with the highest percent spending over budget were the College of Engineering and Computer Science (CECS) at 28% and the College of Nursing and Health Sciences (CoNH) at 19%. The colleges with the biggest percentage cuts were CoNH at 20% followed by the College of Liberal Arts (CoLA) at 15% and the College of Science and Math (CoSM) at 13%. CECS is not being cut at all; in fact, its budget is being increased by $110,819.
If one removes CECS from the calculation, since its budget is not being cut, the remaining colleges with BUFMs are being cut by 12% compared to 7.6% for the administrative units. Including CECS in the calculation, the colleges with BUFMs are being cut 10% compared to 7.6% for the administrative units. Keep in mind also that college is not synonymous with faculty. Much of the overspending in colleges may be in administrative areas. Indeed, personnel costs may account for about two-thirds of the university budget, but they account for a much higher percentage of the budgets of the individual colleges. We have already pointed out to the administration that one of the consequences of the ever-ongoing discussions related to the adoption of an RCM budgeting model has been the replication of university service units within the individual colleges and even within some larger departments.
Interestingly, it has been reported to us (but not by the central administration) that if a college chooses not to fill a position vacated by attrition, it will be credited with the entire cost of the position in calculating its reduction. But if it fills the position, the amount in excess of the new cost of the position—the amount saved—is credited to the university administration instead. So, although the administration has signed an MOU with us promising to replace in the coming year 20% of the BUFM positions lost through the severance package, it seems to be incentivizing deans to not make such hires.
Between FY 13 and FY 15 (actual data), the Boonshoft School of Medicine (BSoM) took a 3% cut. But its actual FY 15 spending was still 10% over its 2016 budget. It is getting a 1% increase in 2016, and the School of Professional Psychology (SoPP) is getting a 16% increase.
The administration will probably try and spin things this way:
It cut administrative spending 8.1% from budgeted 2016 spending and 7.6% from actual FY 2015 spending.
On the other hand, in the colleges, it cut 8.3% from budgeted 2016 spending and 7.4% from actual FY 2015 spending.
But as our analysis shows, because those administrative calculations include BSoM and SoPP, the budgets of the colleges with BUFMs—-i.e., the colleges that serve the largest numbers of our students—are actually being cut 10%, or by 12% if CECS is not included.
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