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The Composite Financial Index—Where’s FY14?
by Silence Dogood

On the MnSCU system website, you can find a table showing the Composite Financial Index for all of the MnSCU institutions. A portion of the document showing the MnSCU universities is shown here:

From the MnSCU website you can also find the definition of the Composite Financial Index (CFI) and the four component measures that make it up:

To know about as much as you probably need to know—higher is better.

The first figure above lists FY13 as the last entry in the table. FY14 ended June 30, 2014 so more than five and one-half months into FY15, the results for the CFI for FY14 are not available. If this information was ever meant to be used to help make decisions, clearly timeliness is important! Nearly half a year into the next fiscal year is not timely! About the only use for information, which comes so late, is for historical purposes! Perhaps MnSCU is taking lessons on openness and transparency from SCSU.

A wise person once told me:

“Bad news can wait.”

So, we are left to wonder just how bad is the bad news! At the Budget Town Hall Meeting on November 13th, 2014, we got a hint when Vice President for Finance and Administration Tammy McGee stated that SCSU’s CFI was 0.07.

Inserting the value for FY14, a plot of the CFI for SCSU is shown in the figure below:

In looking at the plot, one might wonder what contributed to making the CFI value for FY12 so large? When we dig into the data a bit further, it is easy to see that FY12 is anomalously large because SCSU was building ISELF (the Integrated Science and Engineering Laboratory Facility), which was the largest bonded project in MnSCU’s history. As a result, the CFI for FY12 was grossly inflated because of the infusion of nearly $45,000,000. In other words, in FY12, SCSU’s financial health was really not as good as it appeared. Especially, when it came as enrollment was declining significantly, it hid the magnitude of the effect of the enrollment decline.

A closer look at the table for the CFI for the various MnSCU universities shows that only Southwest has a CFI less than 1.00—that is until SCSU posts its 0.07 for FY14. At that time, SCSU may have the lowest CFI at a university in MnSCU by a wide margin!

It is also interesting to note that Minnesota State University, Moorhead, which has significantly higher CFI numbers than SCSU (except for FY12, when the ISELF funding inflated the value), suffered a 9.5% enrollment decline from FY11 to FY13, which led to budget reduction amounting to 10% of faculty and staff including retrenchments. It also led to the “early retirement” of MSUM’s President. So maybe the CFI is not as useful predictor of the economic health of a university as previously thought. One can only hope because from FY10 through FY14, SCSU has had an 18.0% FYE enrollment decline. Adding another 5% drop for FY15, SCSU’s enrollment will have dropped an unprecedented 22.1% in five years.

Coupled with a $9,542,000 budget shortfall for FY15, it is clear that the university is in store for some serious changes. Coming only four years after the university was ‘reorganized’ can only mean that the reorganization was not as successful as President Potter continues to say that it was.

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