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State not doing job overseeing university budgets, faculty union laments

| Wednesday, Dec. 4, 2013, 12:01 a.m.

A state agency that oversees Pennsylvania's 14 state-owned universities is not providing adequate oversight over university budgets, a faculty union charged on Tuesday.

Steven Hicks, president of the Association of Pennsylvania State College and University Faculties, said a 165-page analysis by a Harrisburg-area CPA firm that reviewed the finances of seven of the 14 universities in the Pennsylvania State System of Higher Education suggests the State System permits the schools to mismanage their budgets and hide debt in affiliated corporations and foundations.

State System spokesman Kenn Marshall said State System officials have yet to analyze the entire 165-page report, but took issue with many of Hicks' assertions.

The union report did not “recognize the major pressures on our universities from rising health care and pension costs, all of which are funded primarily through a combination of student tuition and PASSHE's state appropriation,” he said.

The union commissioned Boyer & Ritter, LLC to conduct the analysis after seven of the schools said they needed to lay off faculty to balance their budgets in the face of declining enrollment and stagnant state subsidies. The report analyzed financial documents from Cheyney, Clarion, East Stroudsburg, Edinboro, Kutztown, Mansfield, and Slippery Rock universities.

It found significant variances between what the universities budgeted and what they actually collected and spent between June 30, 2009 to 2013.

Hicks was disturbed that the seven schools created affiliated entities or used foundations to take on debt for new construction.

“Tuition, fees, and state support monies are regularly being transferred to these entities, both directly and indirectly,” Hicks stated.

Marshall acknowledged that State System universities have tapped various public-private partnerships to help finance and construct student residence facilities over the last decade.

But he said neither tuition nor state appropriations underwrite auxiliary operations, such as student unions or student health centers, or student housing.

“Auxiliary operations are funded solely through user fees, including room and board,” he said.

Hicks said the schools need additional state support, but questioned whether their financial statements support calls for layoffs.

Debra Erdley is a staff writer for Trib Total Media.

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