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Chicago State’s shaky finances put accreditation at risk

CSU President Thomas Calhoun pointed out that the school remains accredited. | Provided photo

In a first reverberation of the state’s historic budget impasse on accreditation of public universities, Chicago State has been notified its unstable finances have placed its accreditation at risk.

The Higher Learning Commission, the agency that oversees Illinois public colleges and universities, placed the South Side university on “Notice” as of June 30, a sanction that triggers a two-year review process during which the school must address identified issues.

CSU, which remains accredited during the review period, was dinged on financial resources and planning. HLC cited depleting reserves, significant program and staffing cuts, primarily blamed on the year and a half impasse between the governor and Legislature.

“The institution’s financial situation in FY2016 has been unstable due to the state budget impasse,” HLC President Barbara Gellman-Danley wrote in a July 11 letter to CSU President Thomas Calhoun.

“The University continues to have diminished financial resources and is accounting in its planning for continued diminution of its resources in the near future. As of the date of this action, the State of Illinois has yet to pass a comprehensive state budget for either FY2016 or FY2017 . . . thus further exacerbating the financial challenges and lack of financial predictability,” the letter said.

“The Board required that the University … provide evidence that the University is no longer at risk for non-compliance with the criteria … identified in this action and that it has ameliorated the issues that led to the Notice sanction,” Gellman-Danley wrote.

The agency had sent a review team to the school in late March, then requested CSU respond to the findings. CSU has been given until December to respond to the resulting sanction. HLC will re-evaluate the school on those criteria next spring, deciding at its June 2017 meeting whether to lift the sanction or enact other penalties.

Loss of accreditation would jeopardize ability of students attending the school to transfer credits to other institutions.

CSU’s Calhoun downplayed the sanction, pointing out the HLC action was taken at its meeting on June 30 — the same day lawmakers passed a stopgap budget package containing $1 billion in education funding for universities, community colleges, MAP grants, etc. Covering the next six months, it provided CSU $13 million.

Calhoun believes CSU can show financial soundness, and says he hopes to be taken off “Notice” status by next June.

“There is no change to our status as a fully accredited institution. That needs to be understood,” he said Tuesday.

“When the university back in February declared fiscal exigency, it triggered a necessary process by the HLC to examine our finances. We were found in compliance with all criteria, except barely meeting the criteria regarding finances,” Calhoun said. ” ‘Notice’ simply means CSU was at risk of not being able to meet that criteria. But our financial position has changed dramatically since that time.”

All of Illinois’ 12 public universities have been crippled the past 12 months by the epic budget battle between Republican Gov. Bruce Rauner and the Democrat-majority General Assembly. All, from the University of Illinois on down, suffered layoffs and program cuts.

But CSU, serving 4,500 mostly black, low-income, nontraditional students, depends on the state for a whopping 30 percent of its budget — a greater ratio than schools with large endowments.

Thus, it has suffered most, and was the only school to declare financial exigency — a crisis level that permits layoffs of union and tenured staff. It has had to let go over a third of employees — 300 non-teaching staff in April and nine faculty this summer.

The commission had warned Rauner and legislative leaders in February that the impasse had put all schools’ accreditations at risk.

CSU is the only one to face state budget-related sanctions. However, the agency also placed National University of Health Sciences in Lombard on notice for quality of educational programs, assessment of student learning, and institutional planning.