Friday, September 21, 2018

University of Puerto Rico given further guidance for fiscal plan

By on March 15, 2018

SAN JUAN – The executive director of Puerto Rico’s federally established fiscal oversight board, Natalie Jaresko, sent a letter Thursday to the University of Puerto Rico’s interim president, its governing board chairman and the head of the commonwealth’s Fiscal Agency and Financial Advisory Authority (Aafaf by its Spanish acronym), where she reasserts the board’s position that the school must “take measures” to save it “from financial collapse.”

Saying the matter was previously communicated and discussed, she adds: “Sharp reductions in population and Commonwealth subsidies – which previously have provided over 70% of UPR’s revenues – demand significant, immediate changes to the core operating model of UPR.”

The letter, she explains, “elaborates on previous discussions so that UPR has additional guidance as it develops its draft fiscal plan, which should be submitted by March 21, 2018.”

In addition, she “strongly suggests” that her panel meet weekly with the UPR’s governing board and administration, as well as Aafaf until the fiscal plan is certified.

University of Puerto Rico fiscal plan called deficient

Among the issues listed are revenue measures, which she says the only appropriations that may be included in the UPR’s fiscal plan are those identified in the commonwealth’s certified fiscal plan. Regarding tuition, she writes that its increase would depend on how much spending is reduced, but that the plan should take into account the student population decline, and include a “schedule of increases in tuition relative to the projected level of federal Pell Grant assistance available.”

Jaresko said campus consolidation “options range from centralizing departments and support resources around a few ‘hub’ campuses to closing underutilized campuses.” An implementation plan for the latter would have to detail the “elimination of redundant or ineffective academic programs,” among others mentioned.

If attrition is used to claim savings, a description of the steps “to eliminate positions and services” must be laid out. As for pensions, the fiscal plan should “address any underfunding of the UPR retirement system, including changes that would ensure long term stability of the plan.”

Meeting with the board, she concludes, will help ensure “cooperation and transparency as previous interactions suggest various stakeholders have had misaligned expectations,” and added that a “significant mindset shift and ambitious goals” would result in a “re-envisioned University” that will “be a critical source of renewal for the Island.”

Read the full text of the letter here.

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