Tech loses $1.2 million in 2007, similar losses expect in '08

This article originally appeared in the April 28 edition of The Charleston Daily Mail, and is reprinted with permission.

by Kelly Halloran, staff writer

West Virginia University Institute of Technology had a $1.2 million deficit last fiscal year, and school officials estimate they'll have a similar budget shortfall this year.

Last year marked the first time the university dipped into the red, after several years of declining enrollment and falling revenue.

The college had had a surplus at least for the previous two years. In 2005, the budget had $1.3 million left over, and in 2006 the surplus amounted to $233,000.

But according to financial statements recently made available on the Higher Education Policy Commission Web site, revenue in 2007 fell $1.2 million short of expenditures.

The deficit is due to declining enrollment and an insufficient accounting structure at the school, Associate Provost Scott Hurst said.

Total enrollment dropped to 1,450 in the fall of 2007, down from 1,474 at the same time in 2006 and 1,539 in the fall of 2005.

Enrollment has been steadily declining since 1992, when it peaked at 2,163 students.

In 2006, worries about falling enrollment and facility problems on the Montgomery campus spurred lawmakers to propose moving the institute's engineering school to a technology park in South Charleston. Backlash from eastern Kanawha County andschool alumni nixed the move, and the state pumped millions into renovations and overhauled the administrative set-up of the entire college.

It's now a division of West Virginia University, which shifts much of the financial and recruitment responsibilities to the Morgantown aministration.

A lingering problem that led to this year's deficit is that Tech had not had a good system of tracking expenses, Hurst said.

"One of the problems we have had when we started to address the problem was getting an accounting structure in place," he said.

The school is attempting to turn things around, Hurst said.

In July, for example, school officials began to look more closely at controlling expenditures, he said.

"We need to not have excess capacity in areas where we do not need it," Hurst said. "I'm talking about non-academic services."

Administrative functions, such as human resources and financial aid, have been moved to Morgantown.

Rather than establishing supervisory roles at the school, officials at the two schools also have agreed to centralize the roles at WVU, Hurst said in an earlier article.

The move will save about $700,000 in the coming year, he said.

The school primarily receives its revenue from tuition and fees, Hurst said.
Only one-third of the school's funding comes from state appropriations.

In a court-ordered plan the school released in February, officials focused on ways to recruit and retain students.

The plan calls for enrollment to increase by about 12 percent to 1,650 by 2012.

One way to do that is to offer more scholarships, Hurst said.

"There are things that we have to do on our campus and services that we have to get in place," he said.

School officials expect to run a deficit in fiscal year 2008 similar to this year's, Hurst said.

They hope to be back in the black in a few years with the help of the changes they are making to the school.

"If you invest in the appropriate things and run a deficit in the process of doing that, sometimes it will turn the fiscal situation around," he said.

The state is conducting an audit on the school this year, but officials are not sure when that will be complete, legislative auditor Aaron Allred said last week.