Financial Reserves

Dear Members:

Over the life of the current UPI Collective Bargaining Agreement the administration has put approximately 60 million dollars into reserves.

There seems to be a concern that the UPI would ask to fund general operating expenses out of these reserves.

No. We question the management of the university that has allowed for this rate of savings while cutting classes and driving away our students.

As the reserves have increased from 2010 to 2014, there has been a 12.5% drop in enrollment. The situation is a bit worse, we were told in the last State of the University address, if we look at total credit hours: a drop of 14.85% from 2010 to the present.

Faculty at NEIU remain the lowest paid in the State of Illinois, even though we live in the city (rather than a cornfield as many of our better compensated peers do).

We needed to increase the reserves over the life of the current contract. They were irresponsibly too low in 2010.

But now all of the goals of the strategic plan are being subordinated to the goal of financial health. And with dropping enrollments realization of that goal is also floundering. We are spending money on the wrong things. Good marketing and yet another “Ask Me” campaign can’t counter the fundamental mismanagement of the university’s teaching mission.

This administration has been working to tell a good story to investors, as Vice President Pierick’s memo demonstrates, not to taxpayers or students in our own state.

sjm

To: University Community

From: Michael Pierick, Vice President for Finance and Administration

Date: December 11, 2014

Re: Financial reserves

I am writing to provide an update on NEIU’s financial reserves, and that update is attached.

Mark Wilcockson, then Vice President for Finance and Administration, provided a similar update to the Board of Trustees in June, 2013, and of course that was available to anyone for review.

This update is intended to summarize what are financial reserves, why we maintain financial reserves, what are appropriate and inappropriate uses of reserves, what are the current, historical, and appropriate levels of reserves, and what are the planned uses of existing reserves.

Please let me know if you have comments or questions.

All the best for a great winter break and a great holiday season.