CEDAR FALLS - Several University of Northern Iowa professors have asked the school's administration to look at how the school funds auxiliary operations, like athletics, before making any cuts in the academic division budgets.

The university already has absorbed a 2.5 percent budget reversion, and administrators are preparing for a double-digit cut in fiscal year 2010, which begins July 1. No definite plans have been outlined on how the university will absorb the $10.64 million reduction, but President Benjamin Allen has said strategic cuts in almost every area will be necessary.

Professors like A. Frank Thompson and Hans Isakson say they believe the university can recoup some of the expected losses by reclaiming general education fund money currently being transferred to the school's auxiliary enterprises.

UNI has seven auxiliary enterprises: the Wellness/Recreation Center, Department of Residence, Maucker Union, Student Health, Dome Operations, Athletics and the Gallagher-Bluedorn Performing Arts Center. In fiscal year 2009, which ends June 30, the university budgeted more than $9 million for those operations, with about $5.4 million flowing into the Athletic Department budget.

"I think that now that we are looking at rather severe budgets cuts, there is more interest in reallocating resources within the university in order to shore up, maintain and preserve the quality of our academic programs, which are central to the mission of the university," said Isakson.

The studies

Isakson and Thompson both penned studies that looked at how general education dollars were used to support auxiliary enterprises.

Thompson, a finance professor, believes the university is straying from its mission and values statement by pouring millions of dollars each year into the institution's auxiliary units. According to his research, nearly $66 million has been transferred to the auxiliary budgets in the last decade. More than $42 million of that total was transferred to the Athletic Department budget.

More worrisome than that, he said, is the fact that funding increased by an average of nearly 8.8 percent a year.

"My analysis is the budgets have never been managed to stay within a set amount," Thompson said. "They have always gone over, every year."

Isakson, an economics professor, used the Integrated Postsecondary Education Data System to compare UNI's expenditures to those of other schools. The IPEDS data does not indicate how auxiliary funds are used at other universities, but Isakson said the fact UNI ranks among the bottom of its peer institutions in instructional spending and among the highest, or the highest, using 2006 data, in funding of auxiliaries was enough to warrant a second look.

"Spending on auxiliary enterprise operations at UNI has gotten out of control," Isakson said. "I don't think this university can any longer afford to support that kind of growth in an area that is so far removed from the fundamental mission of the university, which is undergraduate studies."

Though administrators have copies of the reports, President Benjamin Allen is hesitant to base any budget decisions on the information presented in them. Allen said the issues raised are important and pertinent to the budget discussions, but said he has to be careful, in part, because of the IPEDS data used and the continued comparison to Iowa State and the University of Iowa.

Allen said the IPEDS data can be unreliable because there is not a uniform reporting policy among the universities. For instance, one university may put its information technology costs into institutional support, while another categorizes the cost as academic support.

"I have about a 20-page document on why IPEDS should not be used for making too many judgments," Allen said.

War of words

Terrence Hogan, the university's vice president of student affairs, said the first misunderstanding comes from the term "auxiliary enterprise." Traditionally, an auxiliary enterprise would be a self-sufficient unit, but on university campuses the term is more often used to designate units that can generate their own revenue. Often, that money is not enough to cover the unit's operating costs, Hogan said.

There also is disagreement on how to categorize the general education funding transferred into the auxiliary enterprise accounts. Isakson and Thompson say the money is used to cover deficits, but university administrators say otherwise.

"These are not deficits. We have general fund support that is budgeted and approved by the Board of Regents for those enterprises that serve our students, faculty and staff," said Tom Schellhardt, the university's vice president for administration and financial services. "Usually if there is a deficit, it has to be picked up by a reserve or from funds they might have from other resources other than the general fund."

Creating a buzz

The reports have created a buzz in some units, most notably, the Faculty Senate. The senators are currently debating a resolution that would recommend the university cap auxiliary spending at no more than 3 percent of the institution's general education funding, with the funding reductions coming from the Athletic Department budget.

The Faculty Senate is expected to vote on the resolution later this month. If it is passed, the nonbinding resolution will be forwarded to Allen for consideration.

The resolution has taken many forms since the senate first broached the topic late last year. Originally, the motion had asked that the enterprises return some of the money budgeted to them in previous fiscal years to the general education fund.

Jerry Smith, a management professor, believes some auxiliary units "seem more pertinent to the university's mission." During a meeting earlier this month, Smith read a prepared statement that said intercollegiate athletics had become a "significant drain on the university's budget" and that it was time to eliminate the department altogether.

"Some of our recreational activities and game playing must give way to more serious pursuits," he said.

Though none of the other senators have voiced the same opinion, the statement was met with a round of applause.

Sen. Jerome Soneson, an associate professor of philosophy and world religions, says he understands how the Athletic Department's costs can rise as tuition increases - some of the general education funding is used for athletic scholarships - but adds that he is concerned access to scholarships did not increase at a similar level on the academic side of the university during the same time period. He noted that the Presidential Scholars program formerly provided 15 students with tuition, room and board and textbook costs for four years. However, as the university faced increasing budget problems earlier this decade, those scholarships were reduced to about $7,000, which covers tuition.

Money trail

Athletic Director Troy Dannen said the general education money flowing into his department is used, in part, to cover the cost of student scholarships - there are 409 student-athletes - and salaries and benefits for 76 staff members.

Of the department's 400-plus student athletes, 298 receive partial scholarship aid, including 131 who receive scholarships that cover 50 percent of their university expenses. The department budgeted about $3.5 million in fiscal year 2009 for scholarships, with $1 million coming directly from the Panther Scholarship Club.

This year's budget cuts have amounted to about $45,000 for the Athletic Department. Dannen said, so far, the cuts have all been made administratively. Dannen is expecting his portion of the 2010 cuts to reach at least $600,000, which led to the recent decision to cut the men's baseball team.

Dannen said the cuts being discussed in the Faculty Senate would cripple his department's $14 million budget. The studies and recent conversations about the athletic budget used the revenue figures submitted to the Board of Regents. Dannen said his total budget, the one he submits to the NCAA, is actually somewhat different than the nearly $11 million outlined there because of the inclusion of line items like in-kind donations, car programs for coaches and flow-through money for hosting playoff games.

"At that point, you have to ask yourself if you can stand as a Division 1 institution," he said. "To do so requires institutional support. If the institution says they don't want to support athletics, then we will have to re-evaluate what we are doing. But, regardless of what the Faculty Senate is discussing, I have seen no evidence from anyone else that this is a desired outcome."

Apples to oranges

University of Iowa administrators estimate they will need only $840,000 in university support and $1.5 million in student fees to balance the school's $66 million athletic budget, according to information brought to the Board of Regents last year. Iowa State officials asked for $3.6 million in general university support and $1.5 million in student fees to balance its nearly $42 million athletic budget.

According to Board of Regent documents, the UNI Athletic Department is expected to bring in almost $11 million in fiscal year 2009. Of that, $5.4 million will come in the form of general education funding and $1.2 million in student fees.

But Dan Fulks, the director of the accounting program at Transylvania University and a research consultant for the NCAA, said it is unfair to compare the schools' budgets.

"The two divisions are totally different. In terms of the deficit UNI runs, it is actually a little bit less than other schools in their division," said Fulks, who visited UNI early last year to analyze the school's athletic budget. "There were 19 schools out of 1,100 in the NCAA that generated more revenues than expenses in 2006. All were FBS (Football Bowl Subdivision), or Division 1. Those are schools like Tennessee and Florida, have 100,000 people at a football game seven weekends a year and they send half a dozen teams to bowl games."

Those same schools also send another handful of men's basketball teams to the national tournament. The money from those tournaments is shared by everybody in the conference.

'Part of the mission'

Dannen argues his department, staff and student athletes are "part of the mission of any university."

"Harvard has athletics. Grinnell College has athletics," he said. "In many ways, the Athletic Department is the front porch of this university. You should never buy a house because of what the front porch looks like, it doesn't make the house the home, but it is an important piece of the house." Dannen said schools that don't have athletic departments, like Kaplan University, do not put any emphasis on the importance of the student experience during the college years, only on earning a degree.

"Personally, since coming to this campus, I have been disappointed that auxiliary enterprises are not considered a part of the university by some," he said.

Contact Emily Christensen at (319) 291-1570 or emily.christensen@wcfcourier.com.