I received an email the other day from EMU-AAUP President Susan Moeller in response to this post from late October, “Three of the many reasons why money confuses me.” Susan wrote:
I have heard from some faculty that on EMUTalk some people are saying my information is incorrect on the 5.8 million dollar surplus or that the surplus is due to accounting changes or that I am spinning the numbers – so I thought I would send you the document that the members of the Budget Council received from John Lumm at our last meeting.
You will see that it is a very simple schedule that shows exactly what I told the faculty. Just thought you might like to see it. It is too bad that people always assume the AAUP is spinning instead of reporting the facts. The academic administrators at the meeting – mostly department heads argued for the funds to be returned to the departments as they are still suffering from the 4 million cuts from a few years ago. Hope this clarifies the situation for you at least.
And she does include an Excel spread sheet that spells out the budget for the institution. I was going to include a copy of it here, but it’s kind of a pain to format that and really, it seems to me that it comes down to one very simple thing: enrollment is up, so instead of bringing in $159.8 million (as budgeted), the full year forecast in tuition is $166.5 million, or $6.7 million more than expected. A bit of that gets eaten up by other over-runs, but this leaves EMU $5.8 million in the black, and that is based not on EMU-AAUP numbers but on the EMU administrator’s numbers.
Now, I suspect that the administration will still argue that the sky is falling, especially once we get into EMU-AAUP contract negotiations, and they may have a point. It would be prudent to assume that the state is going to cut its appropriation next year, and it might be a significant cut, depending on which doomsday scenario you listen to.
As to what to do with the surplus, I guess it kind of depends on what is possible. If the budgeting/accounting rules are such that we can’t carry it over to the next fiscal year, then it makes more than good sense to distribute much of this money back to departments in an effort to backfill some of the previous cuts. That would seem to me to be the best way to help students. On the other hand, if this is a surplus that can be carried over, then it might make some good sense to use this surplus to brace for next year’s anticipated cuts.
Regardless of what happens with the surplus though, I think Susan’s point is a good one: the surplus isn’t a union spin.
Dear Sitedad:
In your “Three of the many reasons why money confuses me” piece from October 30, 2009, you stated the following:
“Earlier today, I was talking with a suit-type who I trust who basically said that what Moeller was saying wasn’t completely true…”
Since you now see that the EMU-AAUP numbers are correct, have you reassessed your assumption that this “suit-type” can be trusted?
The real issue is when the state budget cuts come through and they will. Everything is a mirage right now. Hiring a lot of high priced administrators and football coaches before the shoe drops.
One can simultaneously “spin” and report facts. Indeed, if spin means simply being persuasive, that’s what nearly every effective communicator does: we present information with the aim of shaping opinion or behavior or both.
There’s no doubt EMU has a surplus this year. That’s good news, isn’t it? ENrollment is up for the first time in about 5 years, and that’s terrific news.
There’s also almost no doubt that the state of Michigan will inflict huge budget cuts on EMU and other universities in the next year or two. This should be plain to anyone who really watches state government, and who realizes how much of this year’s state budget is based on Obama stimulus money.
It’s also pretty plain that, to date, EMU lacks any mechanism for making strategic budget decisions. So panic driven decisions may well be back before too long.
And if you’re in touch with what high school juniors are being told by the college advisors, the newest and biggest influence on college choice decisions is CollegeResults.org. Look it up, and weep. For two decades, status quo mismanagement has domianted this campus, and the piper is coming to collect his dues.
Lamont, I’m not entirely sure who to believe and/or I’m not sure that both Moeller and my “suited friend” aren’t both correct. It is true that John Lumm passed out a description of the budget that indicates there is a $5.8 million surplus. But it might also be true that this surplus might be misleading in terms of EMU’s financial health. And the definition of EMU being in “good shape” financially is, I assume, a matter of some debate.
So I don’t know.
I will say this: in the previous administration and during the last faculty strike/”fact finding” exercise, the EMU-AAUP clearly had more accurate data regarding finances at the institution. However, I also think it’s fair to say that the current EMU administration has a better handle on our books. At least it looks that way….