Editorial: UWRF financial report leaves more questions than answers

The University of Wisconsin-River Falls finally released its anticipated University Financial Assessment on April 12, 2024, from a “third-party reviewer,” as the UW website states, which is Deloitte. Deloitte conducted its assessment from October to December 2023, and the results were expected in January 2023, but, for unknown reasons, were delayed for over four months, until this April.

When the Student Voice viewed the results, we discovered that the “UW-River Falls Review,” as it is called, consists mostly of incomplete and insufficient statistics, and unsupported predictions. There is very little in the way of new information or answers to the many questions that the campus community has been asking since Deloitte arrived at UWRF last year.

In fact, the “report” seems more like another PR publication than the detailed analysis that the UW System paid Deloitte over 2 million dollars to create for all 13 of its universities. This may be one reason for the three-month delay: the university needed time to modify the results into a format that is more presentable, and more palatable. In addition, the public does not have access to this.

Instead, they have access to an amended version of the review, which contains even less information. The ‘real’ report is only accessible to UWRF staff and students, which raises the question: why does the university not want the public to be aware of its contents? 

The amended review can be accessed at www.wisconsin.edu/president/strategic-plan.

The report can be summarized by the following statement: “The current state review of financial health, enrollment trends, and operations suggest that UW-River Falls is on a trajectory of financial unsustainability and opportunities to improve financial performance should be explored in the near-term.” The report, however, is much more hesitant to list what these “opportunities” actually are.

This trajectory of financial unsustainability can be attributed to a variety of factors. The report lists a few of these. Full-time student enrollment has decreased 22.8% since fall 2018, a decrease of 5.2% per year. In 2011, UWRF had 5,808 full-time students, in 2018 it had 5,317, and, in 2023, it had only 4,061. Enrollment for fall 2024 shows another decrease as well.

In addition, retention is down as well. In 2019, retention rose to 77.3%, then, in 2020, decreased to 71.8%, likely due to COVID-19. In 2021 and 2022, it has remained low, however, at 72.9% and 72.8%, respectively. The university is concerned that Minnesota’s North Star Promise could further lower retention as well. The Promise will provide Minnesota students with free tuition at Minnesota’s 26 state colleges and seven state universities if their family makes less than $80,000 per year. 13% of UWRF students will be eligible for the Promise when it begins in fall 2024.

These declines in enrollment and retention, when combined with an increase in operating costs and salary expenses, have placed strain on UWRF’s budget. Operating costs “increased significantly post-pandemic to $106M in [2023], an increase of 9.7% from [2018],” and salary expenses per full-time student increased “35.2% from [2018] to [2023].” For faculty and staff, there has been a 43.3% increase from 2018 to 2023. This isn’t to say salaries have increased 43.3%, but that, as enrollment declines, the employee-to-student ratio has shifted. The report said that “this remains consistent with UW medians,” however. UWRF intends to increase enrollment over the next few years, so it would be unwise to remove faculty or staff who will be needed to meet the needs of an increased student body in the near future. 

This isn’t to say the number of full-time employees hasn’t decreased, however. 

The public report said that “total [full-time employees] have fallen in nearly every administrative unit and every college, placing added strain on existing employees.” The public report identified “low employee morale,” as well as “hiring uncertainty, salary competition, and limited opportunities for internal career progression” as among its list of concerns. 

The only areas where full-time employees have not decreased are “Student Affairs, Facilities Management, and the Chancellor’s office,” which have shown “small growth.” In addition, all UW chancellors received a 6% salary increase on April 4, 2024, a week before the Deloitte report was released. This is due to the salary increases that will take effect for all UW employees, but, in addition, the chancellors will receive another 2% increase by June 30, 2024. 

It seems an unusual business decision to increase pay for certain administrators when 10 of the 13 UW universities are struggling with budget deficits and proposing (or have already enacted, as in the case of UW-Oshkosh) mass layoffs. According to a report by the Milwaukee Journal Sentinel, this will raise UWRF Chancellor Maria Gallo’s salary to $301,921. 

The most significant reason for UWRF’s financial issues, however, is limited state funding, which the public report mentioned briefly, but seemed reluctant to emphasize. It said that “per the Wisconsin State Journal, WI ranks 43rd in state funding / student,” which is a disheartening statistic, to say the least.

The public report mentioned, on its list of “challenges,” that the UWRF base budget was reduced by $2.87 million from 2015 to 2017, and by $2.95 million from 2021 to 2022.

The review doesn’t mention what caused these reductions; they were, in fact, part of cuts by the Wisconsin state legislature to the entire UW System. The review calls this “Limited State Appropriations,” but it seems like more of an attempt from the state legislature to defund higher education in Wisconsin. Another question: why didn’t the report mention this?

In addition, UWRF is more reliant on state funding than ever: “In recent years, tuition and fees as a proportion of total revenues have decreased while reliance on state appropriations has increased.”

These and other factors have resulted in UWRF’s current budget deficit, which was believed, in Sept. 2023, to be $3.2 million or $4 million. In Dec. 2024, the Student Voice reported that it may have been as high as $5 million, as estimated by Dr. Neil Kraus, a Professor of Political Science at UWRF.

  The deficit isn’t $5 million, however. It’s $7.1 million, over $2 million higher than Neil Kraus’ estimate. In December, Kraus said, “There’s a total lack of transparency on the budget,” and, now, in April, that lack of transparency is even more evident. 

Lack of transparency may be too weak a term, however; intentionally or not, UWRF administration misled the campus community for months with inaccurate numbers, and we believe that this is unacceptable. The report even mentions this: “A long existing disconnect between admin and academics has led to varying narratives on campus regarding UWRF’s current financial position, leading to an inability to rally behind a common strategy.”

UWRF’s financial situation affects everyone, from the education of the students to the livelihoods of faculty and staff. Shouldn’t we be informed on what’s going on, rather than being kept in the dark?

The review says that “deficits are expected to continue” and even “worsen over the coming years,” and that “River Falls should consider a combination of revenue-generating and cost-savings opportunities totaling $7-9 million in the near-term.” This “near-term” most likely means by 2028.

“Even as expenses are expected to stabilize,” the report said, “continuing declines in enrollment and compounding external pressures to UWRF’s traditional student population are forecasted to cause the structural deficit at River Falls to worsen over the coming year.” 

If the university “does not make any changes to existing operations,” it is expected to reach a $7.5 million deficit in 2026, a $8.7 million deficit in 2027, and a $9.9 million deficit in 2028. It is unclear what consequences UW-River Falls will face if it does not address the deficit, however.

The private report also contains a section on Academic Production and Workforce Alignment, a brief “Next Steps” section, and appendices on financial data, “UWRF Workforce Analysis,” “Academic Production Analysis,” and “Workforce Alignment.” A few takeaways from these sections:

1. The “Next Steps” are as follows: “Build Initial Opportunity Catalog,” “Conduct a Prioritization Workshop with River Falls campus leadership,” “Compile Current State Assessment (CSA) and Opportunities into Final Report,” “Review Final Report with River Falls campus leadership,” and “Solicit feedback from both River Falls and Universities of Wisconsin System Office and refine approach as appropriate.” No additional details were provided on any of these steps, however. 
2. The decline in enrollment follows state trends: “While the participation rate in the Universities of Wisconsin has declined, the number of high school graduates in Wisconsin is also expected to fall faster than the nationwide trend, creating increased pressure and competition for the traditional student population.”
3. The university held $31 million in total debt in 2023, and “if structural deficits continue at River Falls, cash and investments will erode and significantly impact the institution’s capital position.”

This is where the statistics end, and the predictions and “solutions” start, and the lack of answers becomes more evident. The public report contains a list of initiatives for the university to address its financial issues. Initiative 1 is “Strategic Enrollment Planning.” According to this, the Strategic Enrollment Plan “will include enrollment strategies to address both recruitment of new students and opportunities to increase retention rates. Currently, 15 strategies are being developed.” 

These 15 strategies are not listed in either the public or private reports, which is concerning. The report said that the “planning process” for these strategies will be completed by the “end of spring 2024, with implementation of prioritized strategies in fall 2024.” Spring 2024 is almost over, and we still have little to no information on what these strategies are, which makes it difficult to place any sort of faith in the university’s efforts. According to the private report, “Student Affairs and Strategic Enrollment has shown the greatest salary increase in absolute terms with a total increase of approximately $850K.” What do they have to show for this investment? ‘Wait until fall 2024 to find out,’ the university seems to be suggesting.

Initiative 4 centers on plans for a hiring pause and hiring freeze at UWRF, and Initiative 5 addresses faculty workloads. Little is said (a common theme of this review) on the hiring pause and freeze, other than that the university will “identify opportunities to reduce [full-time employees] when positions become vacant.” This will save, the report says, “$400K in [2024] and $700K in [2025].”

As for faculty workloads, UWRF plans to “identify opportunities to enroll additional students in existing class sections, merge sections and offer more courses on a rotational basis,” in an effort to “create efficiencies and reduce costs.” The report estimates that this will save “$250K per year.” This directly contradicts the report’s concerns about low employee morale, and seems to suggest that the university cares more about cutting costs than about the wellness of its employees.

The public review includes enrollment and retention projections for fall 2024, fall 2025, fall 2026, and fall 2027. In fall 2024, the university expects 4,998 total students; in fall 2025, 5,176 students; in fall 2026, 5,451 students; and in fall 2027, 5,634 students. Of course, because the review doesn’t list the 15 strategic enrollment strategies, it is impossible to tell how the university will reach these numbers, and impossible to tell if these numbers are research-based or made-up. 

The Deloitte report has done little to answer employee questions, or address or alleviate employee concerns. In fact, with a deficit of over $7 million, UWRF’s financial situation seems even more dire than before, and also concerning is the university’s seeming lack of an adequate response. The Student Voice will continue to report on these developments, and, in addition, will report on the university’s strategic enrollment strategies when (or if) they are implemented in fall 2024.