Perfect Storm

By Pat Caldwell, for WesCom News Service April 11, 2014 10:19 am

Eastern Oregon University students study at Pierce Library. A policy change last summer, coupled with flat enrollment, dropped the school’s year-end funding balance below the state’s required 5 percent. (CHRIS BAXTER/The Observer)
Eastern Oregon University students study at Pierce Library. A policy change last summer, coupled with flat enrollment, dropped the school’s year-end funding balance below the state’s required 5 percent. (CHRIS BAXTER/The Observer)
 

Rising costs, stagnant enrollment and other issues translate into challenges for EOU

An unexpected policy change last summer regarding how Eastern Oregon University assesses bad debt collection jolted the institution and thrust its year-end funding balance far below the minimum required by the State Board of Higher Education and the Oregon University System.

The policy change was introduced by the Oregon University System’s comptroller and altered the way each university in the state “writes off” bad debt in accounts receivables. Before, each university in Oregon boasted separate procedures to the bad debt collection issue.

The new plan essentially was a one-time accounting correction of more than $20 million across the Oregon University System. EOU’s one-time adjustment was over $1 million and reduced the institution’s 2013 ending fund balance from 4.8 percent to 1.6 percent.

Under OUS rules, a state-funded university cannot fall below 5 percent on its education and general fund year-end balance. When, or if, a university does fall below the 5 percent benchmark it can often translate into the declaration of a financial emergency.

However, because EOU was directed by the Oregon University System’s finance and administrations committee — and therefore had no control over the matter — to adopt the debt write-off policy, the drop below the 5 percent year-end fund minimum did not produce a financial crisis.

(For the full story, see Friday's edition of The Observer)