Sunday, June 10, 2007

Anatomy of a Budget Deficit (Part One)

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.

11 comments:

Anonymous said...

YEAH! the deficit! Duh?? Where are the summer and fall contracts for the faculty? This becomes more bizarre as the minutes pass!

Anonymous said...

How much did it cost for all of his pictures posted around campus?

Flagstiffed said...

One of Flagstiffed's readers who wants to remain anonymous reported to us on June 14 the following: A vendor who provided services in March to [the college] sent his bill only to get a reply that told him there could not be any payment until after July 1,2007. I am not surprised but those employees who were laid off cannot pay their bills timely.

Flagstiffed has not confirmed this report. Flagstiffed has been informed that employees were not laid off but their hours were eliminated until the deficit can be managed. That does not mean that those employees are not experience hardship now and for some time to come. When you live from paycheck to paychekc you don't recover from a hit like this.

Anonymous said...

Of all the things that have transpired since his tenure..there is no doubt that nothing will be done about anything...but we enjoy reading your site....

Flagstiffed said...

One of Flagstiff's readers offered the following comment on 16 June:

When (the college's president) made his announcement on April 20 that he had decided to cut back P-14 hours 50 percent, that meant those who worked 30 hours were limited to 15. One manager cut back hours to 10 a week on his own. You may not call this a layoff but I do. Then the Virginia Employment bureaucrats told me that I would not receive any benefits because teachers were exempt. The HR department never sent affected employees a letter telling them their rights regarding unemployment compensation nor do they seem to care. That's why several of these employees have put (the college) behind them in disgust and the students will suffer from the lack of experienced personnel. The college board had better wake up to the reality that Ponzi is taking them into bankruptcy.

Flagstiffed said...

Another of Flagstiffed's anonymous readers offered this comment on June 17:

"It must be a source of embarassment for the Commonwealth when (the college) cannot even pay its bills-unpaid invoices, frozen credit cards, etc. And, this is just the tip of the iceberg of fiscal irresponsibility. The question that is a constant cloud around campus is "Why has the problem with the Business Office gone on for so long?" Or does it all come from the top?

If teachers cannot expect to be paid on time, will they continue to teach?

If vendors are not paid, will they continue to do business with (the college)?

If part-time employees are not given consideration concerning hours, compensation, etc., will they continue to work at (the college) or will they consider other options?

The school continues to provide quality instruction and support from dedicated faculty and staff....they should only be provided with the same sense of loyalty and dedication from their administration........"

Flagstiffed said...

On 19 June one of our anonymous readers commented:

One of Charles Taylor's critics has resigned his seat on the (college) Board. Will others follow?

Anonymous said...

Question? Which Board member resigned? I heard that DC was pushed out. Is it him that you refer to? Just curious because a lot of the members seem to be frat brothers of Charlie!

Anonymous said...

When can we expect the next feature story in the Ponzi series?

Anonymous said...

Last school year, Ponzi went to Chancellor Dubois for a Million $ loan....then in April, Ponzi announced an $800,000 fund shortage to pay employees so their work hours were curtailed severely to solve his monetary crisis....July 1 he will get a new pot of money....Will there be another crisis or bailout?

Anonymous said...

YEAH! BRAVO for you Mr./Miss/Mrs. Flagstiffed