Mississippi College Board Seeks More Financial OversightMarch 19, 2017 |
JACKSON, Miss. — Mississippi’s College Board moved last week to increase oversight of the finances of the state’s eight public universities, voting for annual financial reviews after Jackson State University spent its way into trouble.
The board will have to vote again on the policy before it’s official, but such second votes are typically formalities, especially because Thursday’s vote was unanimous.
“It establishes, more than anything, a process to review the financial affairs of each university every year, with the commissioner, the university’s CFO and president sitting down,” Higher Education Commissioner Glenn Boyce said.
Those conversations already occurred, particularly when a university sought to borrow money. But they didn’t happen on a set schedule. In Jackson State’s case, there were two years of behind-closed-doors talks, but mounting concern by trustees and central office staff over dwindling cash reserves led to a public dressing down of leadership under President Carolyn Meyers in October. She resigned days later.
Boyce said he would look at typical measurements such as how many times a university’s cash flow could pay for its yearly debt payments or how many days it could operate using cash in reserve. But he said that because the system’s institutions vary in size and complexity, he doesn’t intend to impose a uniform set of standards, instead trying to tailor standards for each school.
If Boyce feels that a university is off track, he will be able to order a school to come up with a plan to improve its financial health. Any specific goals would be reported to trustees when they set budgets for each university, typically in June.
“The commissioner has the power to say this is what we need to do,” Boyce said.
The policy would also make managing for financial stability part of each university president’s job evaluation and allow trustees to refuse to consider expensive projects sought by a university in financial trouble.
Jackson State is still trying to recover from its problems under interim President Rod Paige, and Boyce said he expected the university would make “significant changes” to save money in the budget year beginning July 1. Those changes could include layoffs.
“Yes, I think it will reach into personnel,” Boyce said.
Though JSU’s case has been very public, it’s not the first university to raise financial alarms at the board. Delta State University encountered financial troubles that caught board attention, although Boyce said that was before he became commissioner in 2015.
With tottering state finances, other universities could also come under pressure. The University of Mississippi Medical Center announced layoffs and pay cuts Thursday to close a $33 million deficit.
“Right now, across the system, everybody is working very, very hard to squeeze out any efficiencies we can,” Boyce said.