“The latest projections, presented to the board in October, show that more than $290 million would need to be drawn from reserves”
The school was already struggling with enrollment issues and then the pandemic hit.
WOUB Public Media reports:
Ohio University Leaders Struggled To Forecast Depth Of Budget Crisis
In June 2019, Ohio University’s board of trustees was presented with a long-term budget projection that had a gloomy start but a happy ending.
It showed that the university would burn through nearly $66 million in reserves over the next four years to cover deficits largely caused by declining enrollment. But this would be followed by a modest recovery.
Four months later, the board was presented with a revised forecast: There would be no recovery in the next six years and the university would need to draw more than $129 million from reserves to cover the deficits.
This was just the latest in a long line of revisions to what turned out to be overly optimistic budget projections as university leaders struggled to adjust after years of record-breaking enrollment came to an abrupt end.
Ohio University’s financial situation is even more desperate now as the coronavirus pandemic takes a heavy economic toll. But the pandemic has simply laid bare and accelerated trends that were already well underway.
Even without the pandemic, the university was heading for a serious financial reckoning. And its leaders were still struggling to develop realistic projections when the virus came along and added a huge dose of uncertainty and extra costs.
The university has already eliminated more than 400 positions, mostly through layoffs, and imposed mandatory furloughs on remaining employees to cut costs. But it doesn’t even come close to closing the budget gap.
The latest projections, presented to the board in October, show that more than $290 million would need to be drawn from reserves to cover the deficits between now and fiscal year 2025.
But that’s not going to happen. The board of trustees and university leaders have made it clear that significant cuts will need to be made instead.
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