Jackson State University’s cash reserves — that is money available for ongoing, discretionary operations — declined from $37 million to $4 million over just the last four years, according to a report presented at Thursday’s Mississippi Institutions of Higher Learning board meeting.
As a consequence, the board has hired Matthews, Cutrer and Lindsay, an accounting analytics firm, to assess the university’s finances between fiscal year 2012 and fiscal year 2016.
The university’s adjusted cash flow surplus decreased from $17 million to a deficit of $25 million — almost 150 percent. This cash flow is key to servicing institutional debt, but with the university hemorrhaging money, the deficit is on trajectory to only deepen.
“This information is deeply concerning,” said Doug Rouse, president of the IHL board, “and we’ve been talking about housing and some other things at Jackson State (University). I don’t really have anything left to say. It’s very concerning. We will have some decisions that will be made.”
On Tuesday, President Carolyn Meyers of Jackson State University sent an email to students, faculty and staff that touts the achievements of the university under her five-year tenure including a growing student population and expansions in programs. JSU currently enrolls 9,508 students.
“The issue with us of course is that we want to make sure that JSU’s students are taken care of,” said Glenn Boyce, commissioner of Higher Education. “We want to make sure that the quality education that (Jackson State University) has been providing for many years continues to be provided. The thing that we absolutely want to find out is, how did this happen? Are there structural problems that need to be changed?”
The board requested an expense management plan in June 2015, but did not receive a feasible plan.
Jackson State University sent out a press release four hours after the meeting stating that the institution is aware of its financial issues.
“It is important to emphasize that the news release from IHL applies to the university’s cash reserves – its savings account,” the release stated. “This in no way affects the daily operating budget of the university. At no time, past or present, has the university been under any threat of insolvency.”
To generate savings, the release indicates, JSU is keeping unfilled education and general-funded positions vacant, limiting travel, holding revenue and retrofitting residence halls with energy conservation lighting. According to the press release, they are projecting that these actions will add $10 million to cash reserves by the end of the fiscal year, on June 30, 2017.
“This is not uncommon,” said Olivia Goodheart, spokesperson for JSU. “This has happened at other state universities in the past, and they recovered so this is not an unusual circumstance.”
The accounting firm Matthews, Cutrer and Lindsay’s work will be completed in two phases, said Caron Blanton, IHL spokesperson. The duration of the project is unknown.
The first phase will be a review of JSU’s current financial condition. The firm will set weekly meetings and objectives with IHL staff, develop a month-to-month budget to determine consumption rates, review current cost saving measures, estimate yearly tuition cash collections, determine the liquidity of receivables and develop a target budget to preserve working capital.
The second phase will be developing a new cost saving proposal. The firm will review data from federal grant closeouts, administrative overhead, support staff overhead, auxiliary operations, sustainability of academic program offerings and branch locations, utility costs and contractual obligations.