State credits SOU with financial turnaround
Southern Oregon University, which the state had considered to be in a “vulnerable” financial position, has survived an intense three-year examination and been pronounced by its main oversight body as stable in its finances and performance and “positioned for long-term success.”
Prior to 2014, state universities were governed by a single Board of Higher Education, which provided a level of security for all the schools. But pressured by some of the state’s larger universities, the Legislature in 2014 shifted the universities to the control of independent boards of trustees. That move created “vulnerability” for two regional schools, SOU and Eastern Oregon University, according to a report Wednesday by the Higher Education Coordinating Commission.
But the HECC unanimously approved the judgment that after three years of analysis, both schools have attained the “fiscal stability and clarity of mission required for future success.”
That confidence, it said in a statement, is based on SOU’s work to “clarify institutional missions, restructure academic programming, make new investments in student recruiting and success and improving financial management,” all helped by “significant” state funding hikes.
The law around the restructuring of higher education says SOU must have a sustainable enrollment model, serve the region’s cultural and economic needs and help drive the state’s 40-40-20 vision (40 percent of the population with four-year degrees, 40 percent with two-year degrees or certificates and 20 percent with high school diplomas). But long-term financial stability tops the list of requirements.
The HECC report says SOU has not met one of its financial ratio goals but is “trending in the right direction.” It adds, SOU “has built sufficient reserves to ensure its solvency over at least the next five years even under considerably less positive scenarios than it currently forecasts.”
SOU spokesman Joe Mosley clarified the HECC statement by noting that while SOU did not meet one of the financial goals, it rated higher than any other university in that area.
“HECC uses three financial ratios to judge the financial sustainability of (the) universities,” Mosley said. “One of them is called ‘current ratio,’ which is the percentage of current liabilities that could be paid off immediately, using current assets… . SOU hasn’t met the HECC’s current ratio target, and neither have any of the other six public universities. But SOU has gone from having the lowest current ratio of the seven universities three years ago, to having the highest today, so we are closer than any of the other institutions to meeting the HECC’s goal. …
“Our relative position among Oregon’s public universities has made a 180-degree turnaround,” Mosley said.
When the HECC last month voted to lift SOU’s retrenchment conditions (imposed during a severe budget crunch), SOU President Linda Schott congratulated her team for “working together to create our successes and overcome the weaknesses that were identified four years ago. ... We have achieved momentum in academic achievement, enrollment growth and financial stability.”
HECC spokeswoman Endi Hartigan, in an interview, said the commission’s report “is a positive decision for SOU.”
“From our perspective, it says Oregonians can know that over the next several years, SOU will remain sound financially and is poised for continued success,” Hartigan said. “Our chairman emphasizes it’s a sign of how well the new governing structure is working.”
— Reach Ashland freelance writer John Darling at firstname.lastname@example.org.