Last fall, the University of Arizona made a stunning announcement: Officials had miscalculated their cash flow by millions of dollars due to a faulty revenue projection model and other missteps.

Initially, they believed that Arizona had made a A $240 million mistake due to accounting errors and inaccurate financial projections. This figure was later revised downward to $177 million at the height of the deficit, which nevertheless led to strong cost-cutting measures.

Now, a year after the budget shortfall was announced, the deficit stands at just under $65 million, according to university officials.

Over the course of a year, Arizona reduced its deficit by more than $100 million, largely through restrictions on hiring, purchasing and capital projects, as well as across-the-board cuts which included hundreds of layoffs but managed to avoid severe cuts across all academic departments. . The university also reduced the amount of merit aid awarded to students. Additionally, it benefited from “better-than-expected revenue performance,” according to university financial documents which show how he solved the budget deficit.

The budget crisis precipitated personnel changes: Chief Financial Officer Lisa Rulney resigned (although she remains at the university in another finance role), President Robert C. Robbins resigned but plans to return to the faculty ranks and chair of the Arizona Board of Regents Fred DuVal relinquished his leadership position amid a fight with teachers that drew the ire of the state governor.

Tackle budget problems

Since late last year, John Arnold has been tasked with turning around the university’s finances. Arnold served as executive director of the Arizona Board of Regents before becoming the university’s interim chief financial officer, a move that drew criticism from Democratic Governor Katie Hobbs, who questioned this decision given how it blurs the lines between the institution and ABOR.

Arnold has since had his interim position lifted and assumed the role of senior vice president.

From the beginning, the university focused on improving its financial reporting, Arnold said. Inside higher education.

“Once we understood the nature of the problem, we systematically worked with our deans, department chairs and other senior leaders across the university to identify areas where they could make changes to their spending.” , he said.

Shortly after the budget problems were revealed, Robbins warned that “drastic cuts» were arriving. And even though hundreds of jobs were lost, academic departments remained intact.

One of the first measures announced in Arizona was a freeze on hiring, travel, procurement and investment projects. Additionally, the university has cut 328 jobs, including 13 vice presidents, since it began cutting budgets across the board.

Some of the largest cuts were imposed in the administrative ranks, including a 36 percent reduction for Alumni and Development, 27.1 percent for the Office of the Secretary, 10.3 percent for the Office of the President and 11.1 percent for the business affairs and CFO unit. Among academic units, the Faculty of Engineering suffered the largest budget reduction, at 7.6 percent; Agriculture, Life and Veterinary Sciences, and Cooperative Extension saw a 6.7 percent budget reduction. University libraries were the only unit to survive without cuts.

“We asked everyone to come up with a plan to cut spending between 5 and 10 percent, and the president’s office led the way,” Arnold said. “So we were able to work with these individual decision makers to come up with the right budget cuts for their programs. »

But the budget cuts — and the process, which some saw as an affront to shared governance — have left many professors furious. They are particularly saddened by the departure of talented colleagues following the pay freeze. Faculty members also expressed concerns about the centralization of information technology, which pushed IT employees away from each department, which would have hampered their efficiency.

The hiring of a new vice president to run computer science also angered some faculty members, including Lucy Ziurys, Regents Professor of Astronomy, who has worked at the university since 1997.

“There’s a lot of attrition. Many people have retired. Basically, you are exhausting an already small and overworked staff. They are laying off these people, but they are hiring more vice presidents with much higher salaries,” Ziurys said. “We have John Arnold telling the newspapers that he has cut 13 vice president positions, but is now hiring more people to replace them. Ultimately, how many net jobs in the administration are actually eliminated? Probably very little.

Another longtime Arizona professor, Johann Rafelski, a physics professor at the university since 1987, believes the nearly 100 remaining vice presidents listed in the budget documents are still too many. Arizona is financially burdened by “administrative overload,” he said. “We’re as heavy as we can be.”

Athletics, which contributed $32 million to the deficit, appeared to be a likely target for deep budget cuts. But the athletic department was largely spared the ax, with its budget reduced by only 2 percent. While university officials once considered dropping some sports, a new athletic director said no programs would be cut. Some critics say the AU’s stated desire to suppress the sport was disingenuous.

“There was no way athletics was going to be on the chopping block. Never. It was just talk,” Ziurys said.

Arnold noted, however, that the department, which has a new CFO in addition to a new director, is currently undergoing restructuring and incurring additional costs due to UA’s move from the Pac-12 to the Big 12. As a result of changes, he expects more savings in the future.

And despite faculty grievances about how the budget situation was handled, Arnold says it was a “collaborative and cooperative process,” guided by “robust shared governance” throughout.

“The (faculty) budget committee that I met several times; the leaders of this committee participated in some of our individual budget meetings. I thought we had a great process,” he said. “I always invite people to contact me directly and come and chat.”

In addition to making cuts, Arizona saw revenue increases, which helped ease its financial burden.

The university raised $20.5 million in unanticipated grants, $10 million in higher-than-expected investment income, another $10 million in additional revenue from its health sciences program and $17.4 million of auxiliary dollars that exceeded forecasts, according to financial documents.

Looking to the future

The University of Arizona plans to exit the budget deficit by fiscal year 2026, Arnold said. The path forward will require further belt-tightening, he noted, although it is too early to specify what those reductions might be. But the teachers’ patience is already running out.

At a Faculty Senate meeting Monday evening, President Leila Hudson called the budget deficit a “crisis of financial mismanagement,” placing the blame squarely on the administration. But she also emphasized the need for collaboration with new President Suresh Garimella, who took office last month after leading the University of Vermont from 2019 until earlier this year.

“I think we’re really at an inflection point where we need to synchronize and adapt to a faculty that is working with the new administration as far and as deep as possible to dig us out of the hole. As a group, I think we should be prepared with all the information, data, specific stories and analysis that will help the person in power, that is the president, right the ship.” , Hudson said in a speech. to fellow members of the Faculty Senate.

Garimella also spoke briefly at the meeting, answering questions from professors for about 10 minutes, including one from Rafelski about how many vice presidents the University of Arizona should have.

“I don’t think we should dwell on the numbers,” Garimella responded. “I think what we should be looking at is the proper functioning of the university. Are critical functions being handled responsibly and are we being as efficient as possible? And I will tell you that I will always focus on efficiency on the administrative side. Give me some time and you’ll see that.

Garimella, who began his career as an engineering professor before moving up the administrative ranks, appears to have been greeted with cautious optimism by Arizona professors.

Rafelski praised his academic credentials and said he appreciated the president’s remarks about administrative staff, but expressed concerns about Garimella’s leadership team. He specifically questioned Arnold’s credentials, pointing out that the new CFO is not an accountant. Rafelski also questions whether the new president will have the ability to push back against the Arizona Board of Regents.

Others, like Ziurys, said Garimella has made a “good impression” on her so far, which she hopes will translate into action.

“He has said it many times: he does not believe in administrative overload and he has had to deal with it where he was before. I hope he puts an end to this ridicule. It’s the faculty and students who make the university, not the administrators,” Ziurys said.