Financial Exigency Policy

G1.14 Financial Exigency Policy

The University’s primary mission is to develop educated persons by transmitting and producing knowledge.  The core function of the University is defined by its mission and, therefore, resides in programs of study and the courses of which they are composed which lead to certification that graduating students have attained an acceptable level of general knowledge and discipline-specific competence.  Because the University receives public support and student fees for performing this primary activity, the overarching principle which guides the University in times of financial stringency and exigency through the application of this policy is that the University will first significantly reduce expenditures that subsidize university programs and activities which do not directly contribute to the development of educated persons.

Because of the centrality of University faculty to its primary mission, a financial exigency should be declared only when there is a financial crisis of such magnitude that all other reasonable measures have been taken and there is no reasonable alternative to termination of University employees.  No faculty member’s employment may be terminated or academic program eliminated for reason of financial exigency absent the declaration of financial exigency by the Board of Governors.

The University engages in continuing reallocation of resources which is unconnected to financial exigency.  Sometimes such reallocation may include the relocation or dismissal of personnel or the restructuring of units to serve better the mission of the University.  It is expected that these actions will continue during periods of financial stringency and exigency.  Such reallocation shall occur with all applicable shared governance procedures as detailed in Section 14 of the Faculty Handbook.

Pre-Exigency Deficit-Reduction Measures:

When the Administration declares that it has compelling reason to believe that the University may soon enter a period of financial exigency, or immediately after the President is advised by the Chief Financial Officer that the University will shortly enter a state of financial exigency, whichever comes first, the President shall within two calendar days convene a forum made up of delegations from the Executive Committees of the Faculty, Student, and Staff Senates and representatives of the Administration, with each of the four delegations to consist of  five persons.  Each delegation shall be afforded immediate access to all relevant financial and budgetary information of the University which relates to the possible exigency.  Each delegation would have a single vote.  The President of the University will preside at the forum and may participate openly in its discussions and deliberations, but he/she will not be considered to be a voting member of any of the four delegations.  The forum will be open to the public, though the public will not participate in the discussion.

The forum meeting must determine what measures have been taken, what reasonable further measures short of faculty employment termination ought to be taken, and the amount of the remaining projected deficit, if any.  Such expenditure reduction and revenue enhancement measures to be considered should include, but not be limited to, the following (no priority implied): increases in student fees, tuition, and surcharges; increases in charges of rentals, tickets, and retail items; consolidation of administrative functions; salary holdbacks (temporary salary reductions to be repaid); freezing of open administrative, staff and faculty positions; incentives to early retirement; curtailment or elimination of selected non-academic programs, including selected athletic programs; curtailment or elimination of selected student services, including selected scholarships; increased economy in operations and support services and prudent reductions in physical plant expenditures; a moratorium on plant construction.  In addition, the forum must advise the President as to whether the Board of Governors should be asked to declare a state of financial exigency.

Declaration of Exigency:

If the President determines, after having given full weight to the findings of the forum, that all reasonable measures to improve the financial situation have been taken and that the situation cannot be alleviated by less drastic means than a declaration of a state of financial exigency, then he or she shall submit a recommendation to the Board of Governors for such a declaration.  Accompanying this recommendation shall be a report detailing the rationale for this declaration.  This report shall list each recommendation of the forum which has been implemented or endorsed and should explain why any remaining recommendations have not been implemented or endorsed.  The Board shall receive, orally and in writing, alternative recommendations from each delegation if offered.  Taking into account the findings of the forum, the Administration's recommendations, and alternative recommendations if any are received, the Board must either declare a state of financial exigency or direct the President to take further steps to increase revenues or decrease expenditures short of terminating the employment of faculty members.

Exigency Deficit-Reduction Measures: 

If the Board declares a state of financial exigency, the Administration must expeditiously (within two days of Board action) convene another forum of the same composition described above to consider means of eliminating the remaining deficit which will, to the greatest extent possible, maintain the credit hour production in courses which meet the four criteria listed below.  At this time, in addition to further application of the deficit-reduction and revenue-enhancement measures considered previously, reductions in instructional expenditures will be considered, including the possible elimination of positions within the academic administration, faculty, and staff, consistent with the goal of developing educated persons.

Academic Personnel Reduction During Exigency:

If the second forum determines that a reduction in the personnel budget of the Provost must be made, positions within the faculty and academic administration may be identified for elimination in a manner which is distributed across the various colleges without the elimination of programs, or it may be necessary to terminate programs.  The distributed cutting of positions is preferable to the elimination of programs because such cutting would least affect the capacity of the University to fulfill its mission.  Therefore, the distributed elimination of positions will be given first consideration.  Such a distributed elimination of positions would be accomplished through the advice of the Department Heads and Deans.  Any distributed elimination of faculty positions would follow the order of consideration in Section 14 of the Faculty Handbook.  All faculty whose positions are so terminated would have the rights described in Section 14.

When it becomes apparent to the academic administration that additional distributed cuts will result in an unacceptable reduction in the quality of academic programs, it may become necessary to terminate one or more academic programs as specified below.

Academic Program Elimination During Exigency:

Academic programs (as defined in Section 14 of the Faculty Handbook) shall be evaluated for elimination according to four criteria: academic quality; centrality to the University’s mission (as described in the current five- or six-year plan); demand for and student enrollment in the program; and cost and cost-effectiveness.  The Deans and Provost will create a list of programs that least meet the criteria.  The departments containing the listed programs will be immediately notified, and the list will be forwarded to the Executive Committee of the Faculty Senate.

The listed programs will be brought before a special meeting of the Faculty Senate, called in accordance with the Bylaws of the Faculty.  The Provost must provide the Faculty Senate with the following: financial information necessary to demonstrate that program terminations are necessary, the total deficit which must be covered by such eliminations, and the projected savings to be realized from the termination of each of the programs presented as candidates for elimination.  The Provost must also report the information detailing why the proposed programs least meet the four criteria listed in the preceding paragraph.

During the special meeting, the Senate will hear arguments for and against the elimination of each program presented as a candidate.  Those arguments should address the four criteria listed above but are not limited to the four.  There will be a Senate vote on each of the programs with a majority vote of the Senators present being sufficient to accept termination of a program.  The Senate may also present alternatives to the programs listed by the Provost; however, the departments containing these programs must be given adequate notice before these programs may be brought before the Senate for debate for possible termination.

If the Senate does not vote to accept termination of enough programs to cover the deficit, the Senate will be called into a second special meeting, within four to seven calendar days, and additional programs which appear least to meet the criteria will be brought forward.  Programs which were presented for a vote in the prior meeting but which were not accepted for termination at that time may be revisited.

If again the Senate does not vote to accept termination of enough programs to cover the deficit, the Senate will be called into a third special meeting, within four to seven calendar days.  If the Senate still has not agreed to the elimination of sufficient programs by the end of the third special meeting, the administration may recommend termination of the additional programs necessary to meet the deficit.

Approval and Implementation of Exigency Plan:

The President will report his/her plan to meet the exigency at the next meeting of the Board of Governors. This report will include the specific recommendations for the elimination of personnel and programs as determined by the above procedures.  The constituent elements of the forum shall also have the right to address the Board through their executive committees, both in writing and in person. The Board of Governors must approve the plan before it may be implemented by the President.

Termination of Exigency:

Throughout the period of exigency, the President shall periodically report to the Board on progress made toward alleviating shortfalls and improving financial status.  The Board will, at its discretion, declare the end of the exigency.  Any of the delegations constituting the forum can petition the Board to declare an end to the exigency.

Post Exigency:

After the exigency has been declared over and as financial resources become available, restoration of funds to Academic Affairs will be given priority.

Programs which were eliminated due to exigency may be considered for reintroduction as new programs only through the normal curricular review process as defined in Article VI of the Bylaws of the Faculty.

Amendment of the Missouri State University Financial Exigency Policy:

This policy will be changed by the University only through the procedures specified for the amendment of the Faculty Handbook (Section 15.2).  (Bd. Min. 12-15-06; Res. Faculty Policies No. 114-06.)