Financial risk assessments were compiled by the chancellor’s office annually from 2015-19 to track universities’ financial performance. They comprised a range of market demand, operating efficiency, and financial performance measures. With them, staff at the chancellor’s office tracked year-to-year changes in a university’s financial health and universities’ financial health relative to one another.
Reviews were shared with university leadership and the Board. At-risk universities were required to complete action plans, implementation of which the system did not at that stage have the processes or credibility to enforce.
The 2019 risk assessment for Bloomsburg University (at that stage considered one of the PASSHE’s strongest universities financially), is available for review. University assessments were:
The risk assessment process continues in a significantly revised form based on four measures of a university’s financial performance – enrollment, annual operating margin, primary reserves ratio, and cash on hand – the last three have minimum thresholds recommended for the industry by the National Association of College and University Administrators (NACUBO). The measures also have predictive value in identifying universities at risk of heading toward serious financial decline.
The current process will be featured in a forthcoming blog, along with tools and resources that enable its adoption.
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