TUCSON, Ariz. (KGUN) — In a special session of the Arizona Board of Regents Thursday, Jan. 25, ABOR Executive Director and John Arnold delivered an overview of the University of Arizona's current financial situation.
WATCH SESSION IN VIDEO PLAYER ABOVE
Thanking UA President Robert Robbins for his leadership and cooperation, Arnold and Regent Fred DuVal said plans to centralize the university's budget, as well as action taken to reduce spending late in the fall, were potentially successful steps to reverse course on 2023's overspending — and said that widespread decentralized spending was the root cause of the UA's budget deficit and lack of cash on hand, rather than the acquisition of Univeristy of Arizona Global Campus, or spending within the athletics department.
"That plan included a hiring freeze, procurement restrictions, travel restrictions, and some other steps that we've put in place that we believe will slow spending over the next six months," said Arnold. "That's going to give us a little time to really dig in and define the scope and nature of the problem that the university is facing."
According to DuVal, at this point following the university's remediation plan in December, UA has "had $700 million cash on hand on January first, has about $900 million cash on hand today," and that the initial reported loss of its cash on hand was due to "a decentralized and unaccountable budget unit process."
Both DuVal and Arnold reiterated Thursday, the earlier reported budget shortfall of $240 million was the result of overspending on investments rather than dollars missing.
"So it was widely reported that the university lost $240 million in fiscal 2023," Arnold reported out to ABOR. "That, and I understand where some of that came from, but it that was not correct. In some ways it was reported almost as a mystical event that a fairy came in and pushed away $240 million. The University started fiscal 23 with $844 million in the bank they ended with $704 million. So a reduction of $140 million. That was the overspend in fiscal 23."
According to Arnold, the bulk of those overspend investments can be tracked with the university's acquisition of the University of Arizona Global Campus in June.
Arnold also addressed the overspend reported from the Athletics Department, which he said is operating at about a $30 million loss.
Arnold says another financial update is coming in the near future.
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