Three new bills circulating in the New Jersey state legislature aim to increase the transparency of university finances. They also aim to increase the accountability of the higher ed trustees who oversee them. The bills are reactions to the near collapse of New Jersey City University due to an unprecedented financial crisis there.
For its part, the State of New Jersey is still trying to figure out exactly what happened at NJCU. The university’s financials appear to show a stunning financial reversal. In 2021, NJCU reported a $100M financial surplus to the state. By 2022, NJCU showed a $67M deficit.
NJCU has spent a tumultuous seven months trying to recover from the fiscal crisis that threatened to close the university’s doors. To date, the crisis has included a vote of no-confidence by the faculty; the resignation of the president; a declaration of financial emergency; two interim presidents; a request for $10M in emergency cash from the state legislature; the elimination of 63 programs at all academic levels; and the layoffs of 49 faculty members.
New Jersey state legislators are considering three bills designed to address the fiscal crisis at NJCU. They want to make sure the same situation doesn’t arise at any of the state’s other publicly funded colleges or universities. New Jersey is one of 14 states that has no centralized oversight of its public higher education institutions. (Michigan is one of these 14 states.)
Higher ed trustees need to remain focused on financial oversight
While the approach provides a lot of institutional freedom, it shields the institutions from legislatures who bear the ultimate financial responsibility. One bill would require higher ed trustees to undergo training to improve their understanding of a publicly funded institution’s finances. The bill would pull higher ed trustees more closely into their financial oversight role.
Nothing replaces authentic financial oversight. With real oversight, WCC would not have a maintenance budget of $300,000. With engaged trustees, that dangerously low amount never would have passed muster. WCC would not have lost millions of dollars on the Health and Fitness Center. Nor would the Master Plan contain the ridiculous “suggestion” that the College build a hotel on campus.
On its face, the New Jersey legislation calls for more oversight and more financial transparency at the state’s publicly funded institutions. On the backside, it brings the state closer to holding higher ed trustees responsible for failing to exercise oversight.
Higher ed trustees like those on the board at WCC owe a duty of care to the people who elected them. While it may be convenient for our elected trustees to claim (or hope) that their primary responsibility is to “advise the President,” it is not. The primary responsibility of higher ed trustees is to provide detached oversight of the tens of millions of public dollars that funnel through the institution annually.
Higher ed trustees who refuse to provide effective and unbiased financial oversight of an institution and its administration are ultimately the problem for institutions like WCC. Making them fully accountable for their decisions is the solution.
Photo Credit: Open Knowledge Foundation , via Flickr