Uni’s million-dollar debt: the struggle to understand & fix it

In September of 2014, the Uni community learned that Uni had a $1.05 million deficit. This debt is due to an accounting error in which defunct University of Illinois accounts were being charged for salaries.

Director Jeff Walkington’s 2014 email stated that Uni had “asked the Office of University Audits to conduct an exhaustive audit of our income/expenditures and business practices for the period in question.”

In addition, he stated his intention to form a budget taskforce that would “ensure we have wide participation and transparency as we move forward with understanding our current budget situation and identifying the steps needed to bring that budget back into a healthy balance.”

Five years later, several members of the Uni community are unaware of any updates to the situation.

Long story short, Uni has not begun paying off the debt yet, but parts of the Uni community doesn’t know even that.

“It isn’t something that is being talked about at faculty meetings. I don’t know if the debt has gone away, I don’t really know what’s happened,” says teacher Lisa Evans.

In addition, there is some confusion about an anonymous donation of 1.25 million dollars back in 2016, which cannot be used for anything other than the Innovations in Learning fund.

Senior Gloria Sunderland recalls wondering why the school was spending that donation money on new chairs and charging stations instead of paying off the debt. As for the debt itself, she says, “I have not heard any updates about it.”

After the donation, “Everyone was like, Oh, yes, we’re not in debt!” says senior Catalin Clougherty. “But apparently that cannot be used for anything but technological advances in the school.”

Members of the Uni community are now wondering what has happened with the debt so far, what will happen in the future, and about Uni’s financial situation in general.

Some students and teachers will remember the financial changes that took place immediately after the deficit was discovered. Food at events like faculty meetings came to a halt. In addition, a new member joined the Uni community: Mike Adams, the business manager.

The lockdown on fundraising happened because of an audit that Uni and the University conducted “almost immediately,” according to Walkington.

“What the audit found is that there’s a lot of business practices that we can do better,” says Walkington.

In addition to improving cash-handling, says Walkington, “A lot of it was double checking on things…so there’s two people…making sure the money is right. But the good thing is that there is no malfeasance…nobody stole the money.”

Still, Uni had a serious problem. According to Walkington’s 2014 email, Mike Adams predicted that Uni’s budget might be short of what it needed by as much as $190,000.

A budget task force was formed as promised in the email. According to Walkington, it recommended extremely “austere measures”.

As a part of those measures, says current Parent-Faculty Organization (PFO) President Matthias Grosse Perdekamp, Uni “cut its budget, so that immediately in the following year, it was no longer budget-deficit.”

As a consequence, some things had to go.

“For example,” says Perdekamp, “there was no money for professional development, so teachers couldn’t go to conferences or take trainings.” He also suspects that staff that would have been hired otherwise were not.

Uni has had positive balances at the end of every year since. In other words, it hasn’t gone further into debt.

Furthermore, the debt “is not something that slows down the operation of the school, or that somehow threatens its existence,” according to Perdekamp.

However, Uni has not begun paying off the debt to the University yet, nor is it known how or when it will happen.

The advisory board, which formed last year, was intended to help answer these questions.

“[The advisory board] will look at the financial situation at large. Eventually, they will come up with a recommendation to the provost,” says Perdekamp.

According to Walkington, the advisory board has discussed Uni’s financial situation a bit.

“We’ve presented different models to them, and maybe different ways we could run the school. And they’ve listened to that and given some advice,” said Walkington. “So you know, different ways that we could possibly raise more money, different ways that we could spend our money…. But it’s been kind of high-level discussions, we haven’t really gotten down to the nitty gritty.”

Until relatively recently, the board had been struggling to actually meet. At first, it was known as the “governing board”.  According to Perdekamp, that title surrendered the provost’s authority to govern Uni to an external board, which is not legally consistent with the university’s policies.

As a result, the board was not allowed to meet until around June, once it had been renamed the “advisory board.” In the fall of 2018, the board was still working on creating Uni’s mission and vision statements.

According to board member Janet Barrett, the advisory board is currently “discussing fiscal issues”, but she cannot share further information.

Another reason Uni has not begun paying off the debt yet is due to frequent provost changes.

“Uni High is practically overseen by the provost office. Since the debt occurred, we’re on our third [provost or] interim provost,” says Perdekamp.

According to Perdekamp, the frequent provost changes hindered progress in solving the debt. The provost would be caught up in solving other, larger problems at the University.

“By the time they came to discuss and think about [Uni’s] debt, the next person had already appeared,” he says.

Walkington believes that when Uni does begin to pay back the debt, it will have minimal effect on the budget.

“I think we would pay it back at a very small rate…over 15 years, 20 years,” he says. “So I don’t think it’s going to affect us greatly. The university is willing to work with us.”

On the other hand, some groups believe the University should forgive the debt altogether.

“I think one might argue that the school should have known this earlier, but I also believe that there is a failure on the University’s side to catch this,” says Perdekamp. “The University, I think, monitors all the spending, audits all the spending that’s ongoing.”

According to Perdekamp, the PFO believes that the debt should be forgiven “because it basically was acquired due to shortcomings of the accounting software, and also shortcomings of the [University] oversight.”

In addition, Perdekamp said, “The PFO has suggested to whoever the new provost or associate provost has been that it should be forgiven.”

This opinion reflects a general sentiment that the University does not support Uni sufficiently.

“Many of the Uni families are University families,” says Perdekamp. He observes that the presence of the school helps the University recruit and retain strong faculty.

“The financial value of that, I think, is far higher than the annual support that the University gives to Uni,” said Perdekamp.  “I think it would be important for the university to recognize…the true value of the school to the University.”

The money that the University gives Uni is highly valuable. Unlike other public schools, Uni does not get local tax dollars as part of its school budget. The weakness of Uni’s financial system are well-known by teachers and students alike: spend one day at Uni, and you’ll hear someone joke about how poor the school is.

Some believe that Uni’s current financial model is fundamentally problematic.

In late 2017, a Strategic Vision Task Force, which included Walkington, Uni faculty member Dr. Elizabeth Majerus, University staff, and others, created a report that addressed several issues at Uni.

The Task Force described Uni’s budget as unsustainable, and proposed alternatives such as becoming a charter school, charging tuition, staff reduction, or “a modest increase in Provost funding”.

But most of these are drastic solutions that would happen far in the future, if at all. Right now, people are just struggling to understand the debt, and how it’s been handled.

Walkington explains that Uni does talk about its finances with the community.

“We communicate. You know what we end up with at the end of the year. And I also give some talks to parents and to the alumni about what our budget looks like for the year and how we ended up for the year,” says Walkington.

However, he recognizes that when discussing the debt in the future, Uni has to work hard to be transparent.

“When we start to pay this debt back,” says Walkington, “…we’ll have to do a lot of really good communicating to say, ‘This is how much we’re making back per year. This is how it might affect the school.’”

Hopefully, future communication will be clearer.

As Perdekamp says, “It’s time we really learn the reasons why this still has not been looked at, or progress hasn’t been made.”

A previous version of this article contained incorrect information about the UFO and the provosts. It has now been amended.