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Seymour Case Study: University Action

Pablo Avila, Megan Brown, Stephanie Gauthier, Jacquada Gray, Yijia Liu

What were the most significant decisions and events in the case and what made them significant?

Seymour University: Background

Background & About Seymour

  • Founded in the mid-nineteenth by an organized religion

  • One of the oldest universities in the state

  • Mostly a traditional population, but has a College for Adult Learning

  • In 2007 started hosting a magnet school for gifted high school students.

  • Historically has had financial challenges

  • In 2007 President Frank Anthony was appointed President of the University

Under President Miller

  • Seven Attempts in ten years to develop a strategic plan which all were unsuccessful.

  • Debt climbed because of science building, nine million dollar expansion & renovation of library, construction of student apartments, and other capital projects

  • CFO Paterson tried to sell 12 acres of campus land that served as a corridor around the "university woods"

  •  Announced  in  2002  with  a   $60  million  goal,  a  capital  campaign  was  raising  millions  for  financial  aid,  faculty  positions,  and   endowment  but  did  not  offer  immediate  budget  relief.    

Before President Anthony

Why this matters

Significance of the Past

  • Campus community no longer believed the budget process was inclusive or effective

  • Attitude of CFO and Budget Manager

  • 1.2 million dollar debt and 11% endowment spending when President Anthony started

Changes in the Budget Process

Budget Planning Changes

Inclusion of faculty in the discussion and decision-making process

Inclusion of Faculty

Change of action: For the FY 08-09 budget process, the President asked Professor James Ward to serve as the Chair of the Budget Committee (he was the Chair of the Economics department).

Impact: This led to diversifying the conversation and the decision-making process of the budget for the institution giving an opportunity for those not in the administration to bring balance to the conversation.

Implementation of narrative to budget proposal

Change of action: The President asked the CFO to write narrative that would explain, contextualize, and layout the budget numbers so that this can be easily accessible to those without knowledge of budget terms.

Impact: Before, the budget proposals were comprised of mostly tables and graphs that were difficult to decipher or understood "in plain English." These narratives enabled everyone to fully understand the context and what the numbers actually meant.

Narrative Budget Proposal

Usage of budget checklist

Change of action: President Anthony suggested to the trustee Finance Committee Chair that he use a checklist of budgeting best practices when presenting the budget to the full Board.

Impact: This approach allowed the Board to evaluate the budget independently, which no longer had to rely on CFO or administration to give out suggestion

Budget Checklist

Budget Choices

Implementation of temporary hiring freeze

Temporary hiring freeze

Change of action: Achievement of financial equilibrium by FY 10-11 would require a temporary hiring freeze in FY 09-10 for positions not related to enrollment growth.

Impact: Implementing temporary hiring freeze is going to reduce cost, especially in this case, Seymour University is under financial stress and has a huge debt.

Student Financial Impact

Change of Action: Raise student fees by no more than 5% for 09-10 budget.

Impact: The committee took into account the ability of students to pay and the possible impact on enrollment as a key strategy when building the budget.

5% max raise in student fees

Facility Maintenance as a Priority

Change of action: Spread out cost of major renovations by 1 or more each fall to keep up "excitement".

Impact: Renovations and facility maintenance will increase enrollment and ultimately tuition revenue

Cost of Renovation Allocation

Developing a strategic priorities committee

Change of Action: Developing a specific committee to work on developing and writing a five-year institution plan for the university

Impact: This signaled an end to closed-­door meetings and financial decision-­making dominated by administrators as well as helping develop a direction the institution wants to go in

Strategic Planning

Resignation of the CFO and the firing of the Budget Director

Change of Action: New leadership for the budget committee and having people in charge made it become more excited for the changes being made instead of being hesitant, negative, and aggressive.

Impact: Change in attitude of the committee

Staff Changes

Final Thoughts

  • Making these tough decisions in other circumstances

  • Balancing the the decision-making process on budget with multiple stakeholders

  • Establishing processes to make budget information readily understandable to the college community

Conclusion

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