The start of Hannah Gage’s term as chairperson of the University of North Carolina (UNC) Board of Governors may signify a major shift in direction from the tenure of her predecessor. Former chairman Jim Phillips was the driving force behind the creation of a grand, expansionary blueprint for the future embodied by the UNC Tomorrow Commission, while Gage called for a new focus on operations and “getting our fiscal house in order” at the first board meeting of the new school year on September 12.
Gage said that rapid growth over the last few years has been accompanied by growing operational problems. “What started as a few isolated accounting errors has become an all too familiar pattern,” she said. “Audit findings, accounting errors, financial aid problems, grant problems—the list goes on.”
The chairman of the board’s audit committee, Frank Daniels, Jr., said that state auditors uncovered 55 infractions at UNC campuses last year, an amount he termed “absolutely unacceptable.” In the last two years, there has been a major financial scandal at N.C. A&T, improperly-awarded IT contracts at UNC-Greensboro, and a myriad of other problems.
“We need to fix things,” Gage added. “We can’t continue to go to Raleigh to ask for funding when it appears we can’t manage what we have.”
The audit violations, while serious, were overshadowed at the meeting by two highly-publicized controversies resulting from management failures.
One management fiasco is an unauthorized satellite campus of N.C. Central University (NCCU) located at a suburban Atlanta megachurch. The campus received none of the proper approvals by administration or trustees, and operated without the knowledge of the overall system. The campus was not accredited by the regional agency that certifies NCCU programs, and the campus’ students were therefore ineligible for federal financial aid. NCCU must reimburse the federal government for any aid they received (the amount is yet to be determined).
In his address at the board meeting, Bowles did not spare the administrators responsible (without mentioning them by name). He even alluded to possible cooperation with law officials should the any criminal behavior surface. He also added that the university system would “do the right thing by the 125 affected students.” He said that the 25 students who graduated would receive degrees from NCCU, while the campus would “teach out” the 38 students who registered for the fall semester. (This means classes will be provided for those 38 students only until they either graduate or pursue other options.)
The unauthorized campus predated Bowles and the current NCCU chancellor, Charlie Nelms. A controversy over the employment of Governor Easley’s wife at N.C. State is of more recent vintage, however, and is more highly politicized. Mary Easley was hired by provost Larry Nielsen in 2005 on a part-time basis at a salary of $80,000 per year. Her duties consisted of running the school’s Millenium Seminars lecture series featuring high-profile speakers and teaching several courses per year. She has a law degree from Wake Forest University and had previously university teaching experience.
Easley’s pay rose to $90,300 before July 1, 2008. On that day, she received an 88 percent raise to $170,000. However, university system rules require that all pay raises greater than 15 percent or $10,000 be approved by the Board of Governors beforehand, and N.C. State had failed to seek approval. It was discovered that the school had been neglecting the rule since 2002, and a subsequent review of over 1,000 raises revealed another 34 violations.
N.C. State officials said they misinterpreted the rule (it was the only school of 17 in the UNC system to do so). Bowles suggested the school’s failure to comply was “an honest mistake,” adding that “there is not a shred of evidence to suggest there was any attempt on N.C. State’s part to circumvent the Board of Governors’ rules.”
However, other concerns have been raised about Easley’s position. Her job is a potpourri of duties–along with teaching and supervising the lecture series, she will now be in charge of newly-created public safety center and co-ordinate some pre-law programs. At the time of her raise, the job specifications had never undergone review by a human resources official, according to Provost Nielsen. Also, the origins of the public safety center are unclear at this point. It does not appear to be a budgeted item, since Easley is to raise the money for the center herself, including the $55,000 for the portion of her salary related to the center. The fact that she was to raise part of her salary through fundraising efforts was not made public until last week’s meeting.
Critics suggest these duties were created to justify her employment and high salary. And the amount of the raise has rankled observers from other members of the faculty to the general public (as indicated by the strong public commentary on several media Web sites). And the founding of such a center with ambitious goals for expansion (Bowles said it would eventually have an annual budget of $4.5 million) usually undergoes considerable scrutiny.
Despite this opposition, Mary Easley’s new position and salary were unanimously approved by the board.
These two incidents, while serious, are likely to run their course without resulting in major changes. Gage’s suggested change of directions, however, could have long-term implications.
The university system has rapidly expanded in recent years. It has not only grown to accommodate North Carolina’s population growth, it has increased its involvement with the state’s community colleges and K-12 education systems as well. In accordance with UNC Tomorrow, it has redoubled efforts to serve as an engine of growth, largely by increasing its research capacity. And it is also greatly expanding its health care facilities.
Gage, who will head the Board of Governors for the next two years, said that “now might be the perfect time to put on the brakes.”
Bowles (and Gage) indicated continued expansion of “brick and mortar” facilities to accommodate future enrollment growth was not, in Bowles’ words, “sustainable fiscally.” They mentioned increasing online academic programs and greater cooperation with the community college system as alternatives to building new facilities.
Bowles gave a more mixed message. He has adopted the UNC Tomorrow Commission’s report as his own, and called for its continued implementation as his highest priority. But he also acknowledged that his administration must become more “campus-focused” to resolve operational issues. He said that many problems were caused by BANNER, an integrated software system which handles everything from financial information to academic and personnel records for the entire university system.