Search
Archives
Categories

Do The MnSCU Trustees “Walk the Talk?”
by Silence Dogood

Over semester break, things quiet down on campus. This allows time for things that you just might not have time for ordinarily. Just for fun, I was poking around on the website for the Office of Finance and Administration.

If you click on the second link on the left side for “Budget” it takes you to the following page:

On the right side of the page if you click on the first link “MnSCU Information”, you are taken to the following page:

Clicking on the link for the “Minnesota State Colleges and University System Financial Overview,” the following document is opened:

While this might make for interesting historical reading, a document that is nearly four years out of date might not be too useful. Hopefully, there IS a document, which is a bit more current. However, having nothing better to do, I decided to read on anyway.

Slide 3 in the presentation lists the following bullet points under “Financial health and compliance.”

The four bullet points listed in the slide say what the Board of Trustees intends to do regarding “Financial health and compliance.” Essentially, this is “The Talk.”

Not having been present for this presentation to the House Higher Education Policy and Finance Committee on February 21, 2011 and without further explanation, one can only guess that the first bullet point means that each college/university will sink or swim on its own.

The second bullet point says that there will be a framework for “on-going monitoring of financial condition at each college and university.” The third bullet point “defines required remediation if performance levels are not achieved.” Unfortunately, the presentation gives no details of the “framework” for monitoring, the specific “performance levels” expected, or what is meant by “required remediation.” Essentially, this is what is known in the education community as “administrativespeak.” ‘Administrativespeak’ is defined as words which have no meaning so they can be defined as the situation requires and frequently redefined with changed definitions.

The last bullet point is the only one that is specified in the presentation. The Composite Financial Index (CFI) offers insights regarding financial strengths and weaknesses. The CFI is calculated from four component measures: return on net assets, operating margin, primary reserve, and viability.

The following figure shows the CFI for SCSU and the average for the MnSCU universities from FY 2008 through FY 2013. Additionally, SCSU’s CFI is shown for FY 2014.

In FY11, a 0.8% enrollment decline helped drop SCSU’s CFI. The $44,800,000 revenue from building the Integrated Science and Engineering Laboratory Facility (ISELF) greatly inflated the CFI in FY12 and overwhelmed a 6.9% decline in enrollment. The continuing enrollment decline of 6.4% in FY13 began the CFI nosedive. In FY14, the CFI dropped again to a value of 0.07 corresponding to another 5.1% enrollment decline. Since enrollment for FY15 will be down over 5% once again, it is not hard to imagine that the CFI will go even lower. However, it’s hard to imagine that a CFI can get much lower than 0.07. Is it even possible to have a negative CFI?

The question is, will the MnSCU Board of Trustees “Walk their Talk” or was it just more ‘administrativespeak’ on a PowerPoint slide that is meaningless. SCSU’s $9,542,000 budget deficit for FY15, reflected in a CFI of 0.07 for FY14, has simply grown too large to continue to ignore.

Leave a Reply