Budget by Ponzi: A Designer Deficit
Several week after the president of the college, announced that his administration suddenly discovered that his 2006-2007 budget had a big hole, amounting to nearly a million dollars, people are still scratching their heads. How did such a big deficit suddenly appear? Who discovered it? More important, why didn’t somebody discover it sooner? Was noone able to predict it? What caused the deficit? How can the college keep this from happening again?
The fact that the college president has provided different versions of this problem, has people even more confused and angry. At first they were told it had something to do with unpaid money due to the college but uncollected by previous admininstrators. Then they were told that it was a normal end of the year budget adjustment. Then they read in the paper that the deficit was the result of having booming enrollments (that the administration reportedly had been bragging about for months).
To repair this years budget deficit the administration proposed to delay purchases and hiring until the new budget year (and postpone paying the piper again, some employees wondered). To cut the hours of parttime employees (who can least afford it) and then to delay paying adjunct faculty.
Based on reports provided by a variety of sources (some unconfirmed at this time) with knowledge and experience in the subject, Flagstiffed staff have put together the following report. We will provide you with this report in several installments. It’s complx. It’s unfolding. It sounds a little bit like a scheme cooked up by Charles Ponzi, the guy who paid first investors with the cash paid by later investors. We don’t want your eyes to glaze over so we’ll break it down for you in bite size pieces. Follow the money, (like Deep Throat said to Bob Woodward) over the next couple of installments.