Moody’s Investors Service, a nationwide bond credit rating business, says the Arizona Board of Regents intervention into the University of Arizona’s financial crisis is a “credit positive.”
It has deemed as satisfactory ABOR’s “rapid and disciplined response to improve the long-term stability” of the UA.
Moody’s, along with Standard & Poor’s and Fitch Group, is considered one of the “Big Three” credit rating agencies and has national prominence.
Regent Fred DuVal, the chair of ABOR, welcomed the report.
“This Moody’s report validates the strength of our turnaround plan and is vote of confidence we are on the right track,” DuVal told the Arizona Daily Star.
ABOR, at a Dec. 13 meeting, required UA President Robert C. Robbins to share his financial plan to right the ship after a November meeting in which Robbins and the university’s then-Chief Financial Officer Lisa Rulney, who has since resigned, admitted to a $240 million miscalculation of days cash on hand.
“The board approved multistep procedures aimed at elevating systemwide budget and spending controls, and more frequent budget reporting documentation, among other things,” Moody’s wrote in its report.
Robbins’ plan, approved by ABOR, which also came in the face of an “ongoing budget deficit,” includes a hiring and compensation freeze through the end of June, as well as freezing international travel for senior administrators, restricting university purchasing, deferring nonessential capital projects and eliminating the tuition guarantee for new students starting in fall 2025.
“The outcome and board-driven action plan for UArizona exemplifies the importance of multiple layers of governance oversight for public colleges and universities, particularly in times of distress,” says the one-page Moody’s report.
The appointment of John Arnold, ABOR’s executive director, as UA’s interim chief financial officer is further evidence of “direct board oversight,” according to Moody’s. Arnold is a former budget director for an Arizona governor.
Many faculty members have criticized UA leaders for a lack of shared governance, meanwhile, saying faculty senators should have been privy to Robbins’ plan before he reported it to the regents.
University of Arizona President Robert Robbins talks about the financial issues facing the university and possible solutions at a Faculty Senate meeting on Nov. 6.
