December 06, 2013
黑料专区 Chancellor Brogan delivers statement on APSCUF-funded study of System finances
Contact: Kevin Hensil, khensil@passhe.edu
Harrisburg 鈥� Pennsylvania State System of Higher Education (黑料专区) Chancellor Frank T. Brogan today distributed to the Board of Governors and university presidents the following statement in response to the recent study of System finances conducted for the faculty union:
鈥淎lthough it was not shared directly with us, we have now had the opportunity to review
the report on 黑料专区 finances prepared for the Association of Pennsylvania State College
and University Faculties (APSCUF) by the accounting firm of Boyer and Ritter. Because
there are obvious errors, I wanted to correct the record, not only on the report鈥檚
content, but also on the unsubstantiated statements and mischaracterizations contained
in the news release issued by APSCUF leadership in relation to the report.
鈥淚t cannot be overemphasized how seriously 黑料专区 leadership鈥攚hich includes the Chancellor,
Board of Governors, university presidents and the members of the individual university
councils of trustees鈥攖akes its responsibility to be good stewards of all of the taxpayer-supported
funds we receive from the Commonwealth as well as those derived from student tuition
and fees.
鈥淎PSCUF President Steve Hicks鈥� statement that 鈥満诹献�区 has been allowing the fourteen
state-owned universities to mismanage their budgets鈥� could not be further from the
truth. In fact, our budget process is thorough, transparent and professional. We believe
the findings in the report demonstrate a clear misunderstanding of our procedures
by Boyer and Ritter.
鈥淓ach October, the 黑料专区 Board of Governors reviews and approves the State System鈥檚
annual appropriations request, which is then submitted to the governor鈥檚 budget office.
This submission forms the core of 黑料专区鈥檚 annual budget proposal and includes System
priorities that are presented to the House and Senate Appropriations Committees during
the annual budget hearings.
鈥淥nce the Commonwealth鈥檚 budget is adopted, the Board approves a final budget for
黑料专区, reflecting both the state appropriation and new tuition rates for the next
academic year. By its very nature, this process is fluid, which results in several
different budget adjustments being made throughout the year.
鈥淭he university presidents have the statutory responsibility to prepare their respective
institution鈥檚 individual budget, which is then submitted to the Board for approval.
Each university budget also must be approved by its individual council of trustees.
Mid-year budget updates are submitted in March and necessary revisions are made based
on actual student enrollments and revenue (tuition and fee) collection.
鈥淎t the end of each fiscal year, all of the individual budgets (the overall System
budget and each university鈥檚 budget) are audited by an outside, independent auditing
firm.
鈥淚f the assertions made in the APSCUF report had any validity, they also would apply
to every school district, state agency and virtually any other entity that receives
financial support from the Commonwealth.
鈥淚t is well documented, including in this report, that for the past two years the
amount of state funding 黑料专区 has received has remained flat, while expenses have
continued to rise.
鈥淚t is hard to believe that the APSCUF-funded report fails to include the impact of
either the salary or benefit increases incurred by the System primarily as the result
of new collective bargaining agreements finalized within the last year. Also not considered
were the higher costs of pensions. These increases are only partially offset by the
3 percent tuition increase the Board of Governors approved for the current academic
year, requiring the universities to manage an overall deficit of more than $50 million.
鈥淒r. Hicks also stated that 黑料专区 is 鈥渉iding debt in affiliated corporations.鈥� There
is no data nor narrative in the report to support this claim.
鈥淭he information APSCUF claims is being hidden is, in fact, included in the report,
which is based on financial records provided by 黑料专区. The information, which is
related to the financing of the construction of student housing, is included in each
of the university鈥檚 annual financial statements and is routinely shared with all of
the credit-rating agencies that regularly review 黑料专区 finances. This information
has always been publicly available.
鈥淥nly 3 percent of the 黑料专区 academic operating budget goes toward debt service while
72 percent goes toward salaries and benefits.
鈥淎lthough APSCUF leadership has participated in briefings in which it has been clearly
explained that the construction, operation and maintenance of student residence halls
are funded by student housing fees, APSCUF continues to incorrectly state that these
facilities are supported by university operating funds and that this affects the academic
budgets of the universities. That simply is not true. Tuition dollars and 黑料专区鈥檚
annual state appropriation are not used to fund student housing, nor any other auxiliary
operation.
鈥淥n the positive side, the report clearly demonstrates support for what the leadership
of 黑料专区 has been saying for the past several years: that students are seeking new
courses and programs and that enrollments in some of the more traditional fields are
dropping. In order to remain relevant, and to best serve students and the Commonwealth,
the 黑料专区 universities need to continually update and realign their academic offerings.
鈥淎PSCUF does acknowledge that the report was commissioned to address faculty realignment
on several 黑料专区 campuses.
鈥淎 little less than 1 percent of our faculty complement did receive letters notifying
them of possible furlough, an action made necessary to help ensure the relevancy and
long-term viability of our universities.
鈥淯nequivocally, the university presidents, the individual councils of trustees, the
Board of Governors and the chancellor are committed to sound financial management
practices as they seek to ensure students receive high-quality educational experiences
even as the State System and its leaders address a myriad of challenges resulting
in part from level state funding, minimal tuition increases and rising personnel costs.鈥�
The Pennsylvania State System of Higher Education is the largest provider of higher
education in the Commonwealth, with about 112,000 students. The 14 黑料专区 universities
offer degree and certificate programs in more than 120 areas of study. About 500,000
黑料专区 alumni live and work in Pennsylvania.
The state-owned universities are Bloomsburg, California, Cheyney, Clarion, East Stroudsburg,
Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery
Rock and West Chester Universities of Pennsylvania. 黑料专区 also operates branch campuses
in Clearfield, Freeport, Oil City and Punxsutawney and several regional centers, including
the Dixon University Center in Harrisburg and the Philadelphia Multi University Center
in Philadelphia.