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Financial Exigency Policy

 

FINANCIAL EXIGENCY POLICY

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Document Number:  BUSF--100
Revision #: 1.0
Document Owner: Vice President for Finance
Date Last Updated: 04/28/2020

Date Originally Created:  04/28/2020
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General Description

The purpose of this policy is to outline the criteria and emergency procedures deemed necessary should Cumberland University experience a condition of financial exigency.

 

Definition 

Financial exigency is a formal declaration by the Cumberland University Board of Trust of an imminent financial crisis of such magnitude, whereby current or projected funds are insufficient for the University to maintain programs and activities at the level required to fulfill its educational goals and priorities. Under these circumstances, the determination may be made that the budget can only be balanced by extraordinary means which may include the termination of existing and continuing academic appointments, elimination or reduction of academic programs, non-academic programs, and administrative and support services.

 

Initiating a Declaration

The President of the University is responsible for initiating the proposal to declare a state of financial exigency to the Board of Trust. Since recommending the declaration of financial exigency is an extreme measure, the President will provide adequate documentation indicating that all available and reasonable procedures to reduce the expenditure levels of the University are exhausted and that no efforts have been spared to enhance revenues. The President will consult with all members of the executive management team, the academic Deans, and the President of the Faculty Senate before sending the proposal to the Board of Trust.

 

The proposal from the President to the Board of Trust shall include the following:

  1. A description of the current fiscal condition of the University, including the projected amount of deficit what would result from failing to declare financial exigency.
  2. A projection of the fiscal condition that would result from actions to be taken subsequent to a declaration of financial exigency.
  3. An analysis of the reason or reasons for the current imminent fiscal crisis for the University.
  4. Supporting evidence that all available and reasonable procedures to reduce expenditure levels of the University are exhausted and that further retrenchment within existing policies is not compatible with the objective of assuring maximum protection for the academic programs of the University and the educational needs of its students.
  5. Supporting evidence that all efforts to enhance revenues have been carried out in a responsible manner.

 

Approval of a Declaration of Financial Exigency

If, after careful consideration, the Board of Trust declares a financial exigency exists, the President will notify all members of the faculty and staff of the University of the declaration within 48 hours of the Board action.

 

Actions Subsequent to a Declaration of Financial Exigency

After receiving input and recommendations from the senior management team and academic deans, the President shall, within a reasonable time frame and with appropriate documentation, initiate a proposed plan to allocate necessary funding reductions within the University. Decisions regarding reductions and/or elimination of personnel, programs, or existing services will take into consideration the integrity and quality of the academic programs, student demand for the program, cost and cost-effectiveness, and the centrality of the program or service to the University’s mission. The safety and well-being of Cumberland’s students shall also be carefully considered.

 

Termination of Declaration of Financial Exigency

During a financial exigency, the President shall periodically report to the Board of Trust on progress made toward improving the University’s financial status. If, and when, the financial health of the University improves sufficiently, the President shall initiate a proposal to the Board of Trust for the termination of the declared state of financial exigency.