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Where Did They Get the Data?
by Silence Dogood

On Tuesday, February 11, 2014, Provost Devinder Malhotra presented financial information about SCSU and other MnSCU universities to the Faculty Senate that was supposed to allay fears of the impending financial doom of SCSU as a result of the declining enrollments. SCSU’s FYE enrollment has dropped 17.9% over the past four years (FY10-FY14). Almost anyone involved with higher education knows that enrollment (i.e., tuition) is what drives the university because tuition accounts for as much as 2/3rds or more of the revenue.

Provost Malhotra’s presentation focused on the “Composite Financial Index,” which “offers insights regarding finaNCIAL (sic) STRENGTHS AND WEAKNESSES. The composite is calculated from 4 component measures: return on net assets, operating margin, primary reserve, and viability. The calculation of CFI from these compoents (sic) involves certain “strength factors” and “weighting factors” applied to the 4 components.”

Without a lecture on accounting, just remember that bigger is better! The image shows Provost Malhotra in front of his slide of the FY13 Composite Index for the MnSCU universities.

During his presentation, Provost Malhotra was happy to point out that SCSU was above the MnSCU average and that we were higher than our biggest rival MSU—Mankato. The data from the background of the slide is reproduced in the table below:

Several in the Faculty Senate pointed out that there was at least one serious problem with this analysis: the university on the list with the highest Composite Financial Index was Moorhead at 3.48, which should indicate a strong financial position. However, for those living under a rock and who are not aware, last fall Moorhead announced plans for a 10% reduction in workforce to alleviate their budget crisis as a result of recent drops in enrollment. How can anyone believe that this Composite Financial Index has anything to do with reality in terms of the financial health if the university with the largest number for the CFI is facing a major financial crisis and retrenching 10% of its faculty and staff???

The answer is quite simple. The data shown by Provost Malhotra is possibly just made up. The CFI data for all of MnSCU is shown in the following table (data from the MnSCU website):

This data is current as of August 23, 2014. Also, please note that this is data for FY13, which ended on June 30, 2013. The books on the audits were closed in the fall of 2013 so these are the ‘real numbers’ and not estimates.

Since the numbers may be hard to read, the bottom portion of the chart is enlarged and reproduced in the table below.

Where the numbers presented by the Provost actually came from is anyone’s guess. The following table shows just look at how far they are off from MnSCU’s numbers.

Some of the numbers are only slightly smaller than MnSCU’s numbers but others differ by as much as 40%! How can there be such a difference between MnSCU’s numbers and the numbers presented by Provost Malhotra in February of this year (at least two months after the audits for FY13 had been accepted by the Board of Trustees)?

Another important concern is when will the data for the CFI for FY’14 be available? I think I’d just about bet the house that the CFI for SCSU will be substantially lower for FY’14—enough so that it might be said to reside in the toilet.

If the enrollment is down 6.0% for FY15, the drop in enrollment from FY10 will be 22.8% in five years. Coborn’s Plaza has lost $6,400,000 in the first four years of operations and is slated to lose nearly another $1,000,000 this year. Dorm occupancy is running around 70% on campus and two entire dorms have been mothballed. Budget cuts rumored to be over $8,000,000 are being talked about. Confidence in the administration, as independently measured by the Great Place to Work Survey taken last November, is so low, it is embarrassing. Clearly, there are serious problems at SCSU!

Additionally, with the nearly complete turnover of senior administrators during President Potter’s seven-year tenure (only Dean Burgeson [Dean Center of Continuing Studies] and Wanda Overland [VP Student Life and Development] predate President Potter), the collective “institutional memory” of SCSU beyond ten years is gone.

Will someone finally say “The sky is falling?” Or perhaps more importantly, is anyone listening?

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2 Responses to “Questioning SCSU’s financial health”

  • Not my Daughter, Not SCSU says:

    If I was a parent who is headed for SCSU to tour the campus with my daughter who is 18 and fresh out of high school and I drive just as directed by the signs, I exit I94 on to 75 to 22nd st, the north up Clearwater Rd . Proceeding north I notice an overabundance of Somalis walking along the road, laying in the yards talking on cell phones. I turn right towards the river as directed and BAM..now I think I am in Mogadishu with Somalis at every corner surrounding the low income apartments. It gets a little better when we pass the new Hockey center. ..but I’m still concerned. But wait, here they are again, everywhere. I proceed north to the new Coborns apartment’s as the brochure looked nice, but wait, right next door is the Islamic Center and it’s Friday prayer time. HOLY COW, what happened? This is crazy. This place looks taken over. They are parked everywhere and acting rude

    It wasn’t like this when I attended here. I notice there aren’t many people living in this neighborhood either. Mostly For Rent Signs and zero pride of ownership. Abandoned cars and a couple old couches in the alleys

    We visit the apartments and they are nice, but expensive. We decide to go to lunch and head for McDonald’s On Division. I have passed 3 goat markets and the old converted Tom Thumb that now appears to actually IN Somalia with 50- 100 cars in the parking lot, street, curbs etc with 20+ men only some with Orange beards sitting on chairs or buckets congregating around a 55 gallon drum and broken down delivery vans
    OMG, WHAT HAPPENED?
    We see the McDonald’s finally on the left. ..BUT we have seen enough. Back to I94 as fast as we can

    IT’S NO WONDER WHY ENROLLMENT HAD CRASHED

  • Patrick-M says:

    Wow, if the area around SCSU is as you described then many must be pining for the good ole days of the “riots of 1988”. Yup that place has certainly gone downhill thanks the liberals and SCSU administration. That’s some mighty fine “leadership” you got going there Earl.

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