President Dan DiBiasio and Bill Ballard, ONU vice president of finance, hosted two forums a week ago Tuesday for faculty and staff to address a $2.9 million budget shortfall for the current fiscal year. In a morning and afternoon session the pair offered an explanation as to why the University is in debt, its causes and plans for solving the existing and future budget gaps.

According to DiBiasio, the University this year exceeded its allocated budget of $59.1 million by $2.9 million. The tuition income generated during the 2013-2014 fiscal year was approximately $56.7 million, which resulted in the shortfall. It is the revenue generated from student tuition that fuels the University’s operating budget.

What does this mean for the students? “The impact is going to be the least adverse as possible,” DiBiasio stated in an interview with the Northern Review. “A total of a 3-4% reduction of expenses will take place.” These reductions will take place where students are unlikely to notice, such as moving towards a paperless university, said DiBiasio. 

During the Northern Review interview, Ballard said that financial aid seems to be the culprit for the deficit. In the past, there has been a financial model to determine the amount of aid needed to satisfy all students while also maintaining the University’s budget. This year, however, the model did not meet its normal standard of keeping the budget on track. The method that was used is a “historic model,” one that was used in previousl years. 

According to Ballard and the President, financial aid information that was used in the past worked well with this model and often correctly predicted the budget. Consultants to the University also worked with the admissions and financial aid offices to predict the amount of financial aid that had been required in the past.

However, Ballard said during his portion of the faculty and staff forum that the FASFA rules this fiscal year changed, and, as a result, confused some students about their financial aid. There was also a total of “250 students were on financial aid [by October 1]”, Ballard told those attending the forum. These 250 students involve just the incoming freshmen, not the upperclassmen who already had their financial aid in order.

This year, more incoming students needed aid, and that number did not balance with the amount of financial aid the students who left the university had collected. 

Thus, the amount of financial aid required in the second semester was greater than in the first semester because of these differences. As a result the amount of debt being assumed by the University became unpredictable.

What happened this year? “36 students slipped by without being noticed,” DiBiasio said in the forum. Those 36 students had $600,000 in financial aid that was unaccounted for; it only contributed to the debt that accumulated for financial aid. 

“Reaction grants” also played a role in the financial aid debt, said the President. “A reaction grant is when a parent of a prospective student comes to you and shows you a financial aid package from a different university,” DiBiasio said. In order to combat these figures, the University will usually offer a higher amount of financial aid in order to attract that student. 

DiBiasio and Ballard offered some guidelines on how they will be working to close the gap. The first step is to “maintain openness and transparency” by communicating the budget decisions to the campus community in a timely manner. 

As soon as information about the budget shortfall’s impact was discovered, there were e-mails informing the faculty and staff about the situation. This alert led the President to host the two budget forums on April 22, immediately after the campus returned from Easter recess.

A potential step important to all of the faculty and staff of the University is the possibility of a personnel reduction. According to both DiBiasio and Ballard, the amount of staff and/or faculty reduction will be as little as possible and only after careful evaluation by a committee the President has commissioned to analyze the situation and offer solutions. This means that professors and staff members will be evaluated based on who “realize[s] the core mission” and any reductions will “protect faculty who demonstrate this,” stated DiBiasio.

Faculty members in charge of the budgets for their respective departments have been given the responsibility to make decisions on what is necessary and what is unnecessary for the remainder of the fiscal year. 

Any financial decisions that need to be made for the departments must be approved by the respective deans, and then coordinated through the vice president of finance. 

DiBiasio and Ballard remain optimistic about the University’s future budget health.  According to DiBiasio, the campus community is sympathetic about the budget situation and the efforts underway to fix it. 

When asked about how to the Board of Trustees responded to the budget information, DiBiasio said that “they were disappointed, but supportive.”

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