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Layoffs, closure highlight gross executive failures

Earlier this week, the Ann Arbor Board of Education voted to authorize layoffs of AAPS employees to eliminate a $25M budget deficit for the 2024-2025 school year. But AAPS isn’t alone in its budget woes. Last December, the Wayne-Westland School District also announced that it would lay off staff to close a $28M deficit. Both districts blamed COVID-era accounting errors in part for their shocking financial shortfalls.

In about six weeks, the Board of Trustees at Eastern Gateway Community College are likely to commit to dissolving the district in response to a financial catastrophe that left the school in need of a cash infusion from the State of Ohio to ensure that it would be able to make its payroll for the remainder of the current semester. In EGCC’s case, the rationale for the closure is the school’s inability to resolve outstanding complaints by the US Department of Education regarding the school’s distribution of Title IV funds as well as related and unrelated accreditation concerns raised by the Higher Learning Commission.

Other community colleges in the State University of New York (SUNY) system are facing significant financial pressures that may result in reorganizations, consolidations, and closures if the problems – which have accumulated over time -cannot be addressed quickly.

The recurring theme here is that all of these institutions must react rapidly to gross administrative errors that have plunged them into financial chaos. I feel it necessary to point out that all of these errors could have – and should have – been caught and corrected by the myriad financial safety measures that these institutions must have in place.

Lack of effective oversight leads to layoffs

Each of these institutions has a Board that signs off on annual budgets and expenditures. These institutions must undergo financial audits every single year. They also must undergo accreditation processes that – when applied correctly – should reveal weaknesses in spending policies, hiring practices, enrollment, financial aid processes, etc.

And apparently, none of it means anything.

Board members don’t ask questions before they sign off on budgets and expenditures. Required audits appear to be performative rather than substantive, so glaring financial errors get missed until checks start bouncing. Chronic declines in enrollment and shrinking fund balances don’t register as red flags among the elected officials whose job it is to watch the money. On one level, that’s understandable because these events don’t seem to register as problems for the executives who are supposed to be running these institutions either.

Yet, these elected (and in some cases appointed) board members make it a high priority to re-negotiate the executive’s contract year after year with generous raises, bonuses, and perks to ensure the institution’s unfettered access to incompetence.

The voters should make no mistake about it: the most institutionally damaging incompetence doesn’t flow from the institution’s administrative offices. Rather, it flows from the board members who fail to ask questions, seek additional information, and demand accountability from the executives they hire and retain.

So be it. The public needs to hold elected officials accountable for their failures to perform the oversight that could have – and should have – identified these gross executive failures before they gutted these institutions.

Photo Credit: rosefirerising, via Flickr