ASU System Board Adopts Policy to Enhance Financial Oversight
MALVERN, Ark. – A new financial reserves policy adopted today by the Arkansas State University System Board of Trustees will help protect the long-term fiscal health of its member institutions.
One of the first of its kind in Arkansas or the country, the policy focuses on building and maintaining an adequate level of cash and unrestricted net assets to support daily operations in the event of unanticipated shortfalls, ASU System President Chuck Welch said. He noted that the policy had been in the works prior to the system’s work and affiliation with Henderson State University.
“The financial situation at Henderson and other institutions around the country is eye-opening for all of higher education,” Welch said. “This policy, in addition to our long-standing financial reporting and budgeting practices, will help provide assurance to our board, campus constituencies, legislators and taxpayers that we are being responsible stewards of campus financial resources. Our financial reserves are also critical to strong ratings for our bond debt, which results in lower interest rates and debt service expense.”
Any ASU System institution with a certain primary reserve ratio or less than 60 days cash on hand “will be considered in financial distress and will be subject to additional monitoring by the System Administration until the campus achieves the target level,” the policy states. No ASU System institution currently meets the financial distress criteria, Welch said.
“This is not a reactive measure because of a current problem,” Welch said. “All campuses are performing extremely well. We have always monitored cash reserves, but this policy formalizes our expectations and ensures that this is a priority issue for the financial health of our institutions.”
Welch said Henderson has formally submitted a change of control application with the Higher Learning Commission to become a member of the ASU System. A third-party review of the institution is expected to be complete this spring, and the search process for a new president – who will be a chancellor in the ASU System – is under way with a goal to finalize a hire by May 1.
Welch and Arkansas State University Chancellor Kelly Damphousse updated the board on preparations to handle potential disruptions resulting from coronavirus concerns. All campuses are putting plans into place, and A-State has a specific website with information and guidelines to keep constituencies informed. A-State has stopped all international business travel, and a group of study abroad students in Italy is returning to the U.S.
Damphousse noted developments with two public-private partnerships: the opening of the Embassy Suites Hotel and Red Wolf Convention Center in Jonesboro, and enrollment growth at A-State Campus Queretaro in Mexico. A six-month review process at A-State for what would be the first veterinary school in Arkansas is under way, Damphousse said.
ASU Three Rivers Chancellor Steve Rook informed trustees that the ground-breaking event for the 140,000-square-foot Saline County Career and Technical Campus would be held Monday morning at the Benton Event Center. ASU Three Rivers hosted the trustees meeting for the first time as a member of the system, and Welch said the overall transition has gone very smoothly.
In other business, the board:
- Agreed to re-establish University College for undergraduate studies at A-State.
- Approved ASU-Beebe to offer an Associate of Applied Science degree in Nursing.
- Approved A-State to award honorary doctoral degrees to Centennial Bank Chairman and CEO Johnny Allison of Conway and Grammy Award-winning musician Rosanne Cash for their contributions to the university.
- Agreed to establish a $5,000 program fee per semester for participation in the H.O.W.L. Transition Program, which provides positive learning environments for students with intellectual disabilities and/or autism and provide the college experience while preparing these students for adulthood and careers.
- Approved establishment of the Center for No-Boundary Thinking in the A-State College of Engineering and Computer Science. The mission of the program is “to develop human infrastructure at the frontier of bioinformatics, advanced data science and artificial intelligence.”