Updates on University Finances and Operations to ABOR
June 20, 2024, 9:10 a.m.
Dear Colleagues,
This afternoon, the University of Arizona will present an update on its finances and operations at the Arizona Board of Regents (ABOR) June meeting hosted by Northern Arizona University in Flagstaff.
The ABOR meeting is open to the public and available via livestream. A recording of the meeting will also be posted on the board’s YouTube channel in the coming days.
In the interest of keeping our University community informed, I would like to provide a preview of today’s presentations, the first of which will be an update on the University’s budget for fiscal year 2025. The presentations will also include highlights from the independent assessments of Arizona Athletics and the University’s online education operations conducted by a global services firm as part of our financial action plan.
The University’s FY 2025 Budget
Beginning at approximately 2:30 p.m., incoming Senior Vice President, Chief Operating Officer and Chief Financial Officer John Arnold will present the University’s FY 2025 Annual Operating Budget for approval by the board. John will share our most recent budget planning assumptions for the new fiscal year that begins July 1.
The proposed budget indicates:
- A relatively stable expense rate and very moderate revenue growth in FY 2025 compared to FY 2024.
- A projected deficit of $52 million at the end of FY 2025, which reflects a $125 million reduction from the initial $177 million deficit anticipated in January. We are currently projecting a $162 million deficit for FY 2024.
The budget also addresses cuts to state funding for Main Campus and University of Arizona Health Sciences, the Promise Program and the Arizona Teachers Academy.
While the University will continue to operate in a structural deficit in FY 2025, we are making significant progress in improving our financial position and anticipate closing the deficit in FY 2026.
Strengthening Arizona Athletics
On behalf of the University, John Arnold will share an update on the third-party assessment of business practices in Arizona Athletics and their recommendations for improving the department’s financial position.
The independent assessment provides:
- A thorough analysis of athletics revenues, expenses and operations, benchmarked against peer institutions in the Big 12 Conference.
- An overview of the uncertainty associated with the national state of intercollegiate athletics.
- Details on financial and operational issues and opportunities for Arizona Athletics.
The report recommends reforms to the department’s operations while reinforcing the importance and value of Arizona Athletics to our University and the greater community.
Vice President and Director of Athletics Desireé Reed-Francois will then present a plan to strengthen operational and financial accountability and secure the future of Arizona Athletics. The plan will be available on the Arizona Athletics website following the presentation.
Enhancing the Online Educational Experience
During the meeting, John Arnold will provide an overview of the third-party assessment of the University’s online education operations across Arizona Online and University of Arizona Global Campus (UAGC).
The independent assessment supports:
- The University’s strategic rationale for establishing UAGC and beginning a multi-year transition to fully integrate online education.
- The potential for the integration process – already underway – to significantly expand access to higher education for a diverse community of learners across the country while providing substantial financial stability for the University.
- The importance of a sustained commitment to improving retention and graduation rates as we integrate our operations to enhance the online education experience and become more efficient.
The report offers several recommendations on how to consolidate the University’s distinct online operations. We will explore these options as part of our current planning process and as the regulatory approval process continues with the U.S. Department of Education, the WASC Senior College and University Commission (WSCUC) and ABOR.
Moving Forward
The leadership team and I will share updates on the University’s path forward as we continue to implement our financial action plan in the new fiscal year. I remain grateful for everyone’s commitment to work together as we improve the institution’s financial health. This work will set the foundation for the University’s continuing impact and strong future in support of our mission, shared values, and commitment to our students, faculty, staff and the broader community.
Thank you for your ongoing dedication to the University of Arizona.
Sincerely,
Robert C. Robbins, M.D.
President
The University of Arizona
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