In addition to its other problems involving Lu Hardin, who resigned as president under fire last month, the University of Central Arkansas has been forced to cut operating expenditures, particularly on scholarships, under pressure from the state Department of Higher Education.
DHE Director Jim Purcell and Deputy Director Steve Floyd met with UCA administrators earlier this year, concerned about UCA operating deficits, and urged the University to make corrections.
UCA Interim President Tom Courtway said Friday that UCA had responded by reducing scholarship expenditures by about $3.5 million from the roughly $20 million it had been spending, and by making other adjustments to operating expenditures. He said that Paul McLendon, UCA vice president for financial services, had assured him that that UCA would not have a deficit for the fiscal year that ended June 30. The audit for that year is underway now. McLendon and Barbara Anderson, executive vice president, were the UCA administrators who met with DHE officials.
Courtway said that UCA had shown an operating deficit of about $1 million for the fiscal year that ended June 30, 2006, and about $5 million for the year that ended June 30, 2007. He said much of the deficits resulted from the fact that the state funding formula for colleges and universities lagged behind expenses when an institution was growing rapidly, as UCA has been in recent years. A $1.5 million award made against UCA by the state Claims Commission because of an automobile accident also contributed to the $5 million deficit, Courtway said. He said he’d meet next week with DHE officials for further discussions.
Stephens Media’s Arkansas News Bureau reported earlier this week about pressure on some Arkansas colleges, including UCA, to reduce the percentage of unrestricted funds spent on scholarships. That story didn’t delve into the operating deficits of recent years and further cuts this year.
UCA will have to spend about $1 million to buy out Hardin’s contract, but officials have said that money will come from auxiliary funds generated by bookstore and restaurant sales, perhaps in installment payments.
— Doug Smith