Unraveling Northern Kentucky University’s almost $25 million deficit, sudden leadership change

“I think we saw it differently: Two sides had come to that conclusion, the board and the president, then, at the end of the semester, it was probably a very logical time to do it,” Boehne said at the time.

Boehne is still adamant that the president’s sudden departure isn’t due to the budget, instead saying it was a symptom of a “relationship moving toward its conclusion.”

Boehne also doesn’t agree with Farrar’s comments that Vaidya’s departure is related to the budget.

“I guess I’m saying, if the question or somebody is thinking, ‘Oh, we saw what we saw happened on the  [Nov.] 9 and that was it,  I mean, you know, gosh, look at these numbers. And we’re done,’ that’s not the case,” Boehne said.

Boehne points toward issues caused by the COVID-19 pandemic, such as enrollment and financial aid.

“Those two items right there had the real impact on the budget,” Boehne said.

When NKU released its 2023 fiscal year budget in mid-June 2022, there was no mention of any shortfall. The university approved its $271.5 million budget, an increase of $7 million.

One month later, the university hired a new chief financial officer and vice president for administration and finance, Jeremy Alltop. Alltop told NKU’s student newspaper, The Northerner, that he had no idea these issues were in the budget.

Farrar said that when Alltop arrived, he started looking at all the pieces and how they were put together, the university’s spending, “that’s when [the issue in the budget] was discovered.”

The budget shortfall was presented to the Board of Regents in an audit meeting in October.

In an Oct. 17 email to then-President Vaidya and the board, Andrew Aiello, chief of staff for Go METRO, Cincinnati’s transits system, who serves on NKU’s College of Informatics Advisory Board, expressed concern over the issues in NKU’s budget.

“We have heard the news that NKU is facing an extremely challenging budget situation and will soon be making some very difficult decisions about the future of the university and, in turn, the future of our community,” Aiello said. “Times like these will no doubt require shared sacrifice, strategic thinking, and strong leadership.”

On Oct. 31, the Northerner reported the budget deficit, initially thought to be $18.7 million at the Oct. 4 meeting, was actually $24.2 million.

The Board of Regents held a meeting Nov. 9 where Alltop and Matt Cecil, provost and executive vice president, outlined the university’s repositioning strategy.

Among the changes outlined, the university said it would allow a “voluntary separation program” for eligible tenured and tenure-track faculty.

It would also be rolling back merit-based scholarships for international students.

“The big overspending on financial aid, the increase in instructional costs, those kinds of things. A lot of that really expanded in the last two or three years. That’s when the problem became really more acute,” Farrar said.

Farrar outlined that the issues in the budget stem from scholarship money and staff raises.

The problem with scholarship money started with the pandemic, according to Farrar. Before the pandemic, the university dropped its testing requirement — ACT and SAT scores — for merit-based scholarships, leading the university to rely solely on GPA.

During COVID, GPA scores skyrocketed, so there was a considerable influx of scholarship-qualified students. Instead of allowing these students to use outside money, such as KEES Scholarship money, the university first used its own pool of institutional aid, which amounted to about $8 million.

The 2022-2023 fiscal year budget outlined that the university would reverse this trend moving forward.

It did, however, keep room for staff pay increases, with about $7 million going to pay raises for staff during this time.

Farrar thinks the university had to make these investments in order to keep staff because some were leaving to accept better offers.

“That’s a big increase in personnel costs,” Farrar said.

Staff expenses are usually the most expensive part of any business, according to Farrar, but the university might have been a bit more generous than it was able to afford.

President Vaidya’s emails

In emails obtained by LINK nky, Vaidya communicates with university officials, staff, and concerned community members about the repositioning plan, NKU’s budget issues, and listening sessions in the fall.

In a Nov. 2 email with NKU’s communications team about prepared remarks for the Nov. 9 Board of Regents meeting, there isn’t any clear indication that Vaidya knows of his exit.

“I wonder if I should begin with some sort of acknowledgment about the repositioning and listening sessions and the difficult situation etc.? Thoughts???” Vaidya asked.

On Nov. 8, the night before the Nov. 9 Board of Regents meeting, the board had dinner with Vaidya. Boehne said that the board and the president didn’t discuss Vaidya’s exit at that dinner, but the discussion of it did start the next day.

Eight days later, on Nov. 17, the board held a special meeting where they announced Vaidya’s departure. The meeting was swift, the president wasn’t available for comment, and the board immediately went into executive session.

In Aiello’s — who serves on the College of Informatics Advisory board — email, in which he expresses concern over NKU’s situation, he also outlines ways he thinks the university can move forward.

Specifically, he acknowledges that cuts need to be made, but he argues for those cuts not to happen to the College of Informatics.

“It is understood that cuts need to occur, but disproportionate cuts in Informatics would be counterproductive to the goal of sustaining/growing enrollment,” Aiello writes.

He also writes that the university demands more from the college, and if NKU is to grow, it must offer something different from the marketplace. His remarks specifically hit on maintaining Informatics+, a center connecting NKU students to real-world learning experiences.

Aiello outlined how regional companies seek talent in electronic media and broadcasting, data science, cybersecurity, and computer information technology.

“These companies have built deep relationships with the COI through the outreach of Informatics+,” Aiello writes. “They are heavily engaged in keeping the university responsive to the needs of industry, and they are delivering non-tuition streams of revenue to the University (Cybersecurity Symposium, DX22, Kroger Technology, and Digital Innovation Lab, etc.). It is essential that the outreach arm of Informatics+ continues to serve the region at a high level. The college’s exceptional successes in fundraising are also a result of the effectiveness of the Informatics+ team.”

At the Nov. 9 meeting, however, the board approved discontinuing Informatics+.

Boehne said there are plans to roll this program in with other programs at the university.

There isn’t, however, any information specific to Vaidya’s departure, and LINK nky is still in the process of an open records appeal over Vaidya’s emails with the attorney general.

On Jan. 13, the Attorney General’s Office issued a decision that found that NKU violated the Open Records Act by not correctly responding to LINK’s request within five business days — something that’s required under the law.

NKU released 629 pages of emails, but continues to withhold some emails due to what it argues is preliminary standing, such as “preliminary drafts, notes, and correspondence with private individuals not intended to give notice of final action of a public agency” and legal correspondence from NKU’s legal affairs office.

LINK nky disputed these categories and has filed another appeal for the rest of the president’s emails at the behest of the AG’s office.

What’s next for NKU? 

Farrar said there was a combination of mistakes made regarding NKU’s current financial situation.

“But really from my perspective they were made with good intentions in mind,” Farrar said, elaborating that the university needs to make sure it balances what it wants to do with the budget.

During its meeting in early January, the Board of Regents unanimously voted to appoint Bonita Brown, vice president and chief strategy officer at NKU, as the university’s interim president.

Brown said one of her goals is to make the university more frugal through the university’s repositioning strategy.

Last year, the Kentucky legislature bailed out Kentucky State University with $23 million — about half of the university’s budget — after the university found it had a budget shortfall in the summer of 2021. This led the university president to resign and Gov. Andy Beshear to investigate the school’s financial situation.

NKU’s nearly $25 million budget deficit is about 9% of its total budget.

This year, however, is a non-budget year for the Kentucky legislature. Sen. Chris McDaniel (R-Ryland Heights) told LINK nky in November that he has yet to hear of NKU approaching the legislature to open up its budget for additional funding.

“We’re going to keep an eye on what they have going over there,” McDaniel said in November.