“A Financial Distress designation is meant to apprise the public that current conditions at an accredited college or university raise potential concerns about its resource base to support its educational programs,” HLC wrote in a Public Disclosure Notice dated Feb. 26. The resource base is part of HLC’s criteria for accreditation.
Credit: Bill Lackey
Credit: Bill Lackey
University officials told the News-Sun this designation was based in part on audits from Fiscal Years 2021, 2022 and 2023, saying that “it did not come as a surprise to the university, nor does it affect our day-to-day operations,”
“We have been transparent about our financial situation as well as the steps we’ve taken to address recent budget shortfalls caused by the shifting higher education landscape,” officials said.
“In 2024, we announced significant program and position cuts to fully eliminate forecasted losses and balance our budget by FY2027. The HLC, in assigning its designation, noted that Wittenberg has taken steps to improve its financial situation since the FY2021-2023 audits were performed.”
Wittenberg remains an accredited university while assigned this designation.
University officials said the designation “is not a sanction, nor does it change our accreditation status.”
The HLC notice stated that when colleges or universities are on this “financial distress” designation, most other universities will continue to accept their credits, whether for transfer or for admission to other higher degree programs and institutions.
Credit: Bill Lackey
Credit: Bill Lackey
Last August, Wittenberg University’s board of directors approved a plan that would eliminate the jobs of 30 faculty and 45 staff. In September, university leaders announced that the reductions would actually impact about 40 people — the jobs of 24 full-time equivalent faculty and 45 full-time equivalent staff members were being eliminated, but some employees were being assigned to open positions.
The university recorded a $17 million deficit in the 2022-23 school year, according to its tax records. They spent about $96 million that year, and about $26 million was spent on salaries and benefits for staff. The Board of Directors has said it plans to fully eliminate its forecasted financial operating losses by fiscal year 2027.
A Presidential Search Committee is also in the process of looking for the next president of Wittenberg, as Mike Frandsen will be leaving at the end of his term this June. The university held eight listening sessions and issued a survey that drew over 500 responses. They posted a profile of what they are looking for in a new president and began outreach to candidates this winter.
The Higher Learning Commission said that as part of the “financial distress” designation, Wittenberg will host an “advisory visit” no later than September, to address various HLC requirements, including Core Component 5.B.
5.B. requires that, “The institution’s resource base supports its educational offerings and its plans for maintaining and strengthening their quality in the future.” It has sub-entries requiring that universities have “qualified and trained operational staff and infrastructure,” realistic goals, well-developed budgeting and finance processes, and that fiscal allocations “ensure that its educational purposes are achieved.”
“We look forward to this visit and to working with the HLC to remove the designation,” officials said.
HLC anticipates the financial distress designation will remain in place until the Advisory Visit process concludes. After the Advisory visit, the HLC will determine whether the designation can be removed or if other action is necessary.
For more information about this status and process, visit HLC’s Directory of Institutions on its website.
Credit: Bill Lackey
Credit: Bill Lackey
Credit: Bill Lackey
Credit: Bill Lackey
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