As Chatham University grapples with a multimillion-dollar budget deficit, several current and former faculty members are describing their past interactions with the university’s budgeting and accounting practices as “chaotic,” “god-awful” and “always an adventure.” 

The private, nonprofit university estimates that, after making significant cuts, it now faces a $6 million deficit, which it attributes to declining graduate student enrollment, rising costs and an “aging financial system and reporting infrastructure,” among other factors. The concerns of the current and former employees reveal, at least, that some lacked confidence in the university’s financial management prior to the deficit’s announcement.  

The university’s auditor, Schneider Downs & Co., has not found “material weaknesses” in Chatham’s internal financial reporting mechanisms, according to a review of 10 fiscal years’ worth of audited financial statements. The next report, covering the fiscal year ending June 2023, is expected to be released in December. 

However, five current and former faculty members — two of whom spoke on the condition of anonymity out of concern for career ramifications — criticized or expressed concern with some of their financial interactions with the university. Some said that administrators shared conflicting information about program budgets or provided little oversight during the budgeting process, and others said they managed program budgets or grants using only Excel spreadsheets, some provided by the university. 

Reliance on spreadsheets could lead to errors in budgeting or grant management, according to some experts in nonprofit accounting and financial management. 

Michael Collyer, a professor of biology, said that the spreadsheets he received from Chatham left him unsure about how grant funding had been credited.

“I had to trust that the bookkeeping was good because I couldn’t reconcile it,” said Collyer,  who has managed a roughly $112,000 federal grant from the National Science Foundation by requesting Excel spreadsheets from the university. 

Late last month, the university created a new office to help administer grants and contracts.

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This summer, faculty at Chatham learned that the university faced a projected $8-12 million deficit, inherited by then-incoming president Rhonda Phillips. Under Phillips, the university has limited retirement benefits, laid off staff and cut the salaries of the leadership team, among other austerity measures. 

Board of Trustees Chair David Hall told faculty that the board became aware of the deficit ahead of its June meeting, adding that the influx of COVID-19 relief funds had delayed the impact of the budget shortfall. The audited statements from the fiscal year ending in June 2022, however, show a roughly $19 million gap between revenue and expenses. 

The university said the statements include expenses that “are not necessarily” in the operating budget, where the deficit is.  

Bill Campbell, a spokesperson for Chatham, declined to comment on internal university business operations or the statements of current or former employees, citing university policy. He did not respond to questions from PublicSource that asked how the university managed its finances prior to June; what role Excel spreadsheets have played in its management practices; and how administrators ensured that the financial information shared with faculty was accurate. 

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Campbell also did not comment on how the alleged accounting shortcomings cited by faculty may have contributed to the deficit. “Chatham has previously communicated to employees that we are upgrading some systems to replace those that did not keep up with growth and needs,” he wrote in an email.

Steven Thompson, the co-chief executive officer of Schneider Downs, said the company does not comment publicly about its clients without their request or consent, referencing an industry code of professional conduct. 

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Grant management prompts questions and concerns

Erica Harris, an associate professor of accounting at Florida International University, said universities like Chatham would want to use a “sophisticated” budgeting software that supports real-time analysis and draws data from accounting software. 

Managing individual grants through Excel is common for nonprofits that lack budgeting systems, but “it comes with a lot of downside” partly because of the risk of errors, said Jim Croft, the academic director for nonprofit financial management programs at Northwestern University. 

“Excel can do a beautiful job” at small nonprofits, Croft said, “but at some point, you have to be concerned about the ability to have some controls over the input and output of information.”

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Chatham University’s campus, in Squirrel Hill North, on Tuesday, Sept. 19, 2023. (Photo by Stephanie Strasburg/PublicSource)

For some professors at Chatham who manage grants, the use of Excel spreadsheets has made it difficult to reconcile accounting disparities or know how much of their funding remains available. Based on his spreadsheets, Collyer, for example, is unsure whether the university has properly used a $24,000 component of his grant from the National Science Foundation to hire a visiting professor while he was on sabbatical. 

Similar concerns have persisted for some time. In 2009, Sarah Shotland co-founded Words Without Walls, a program at Chatham that brought creative writing workshops to local jails and prisons. Shotland said that she would send the university spreadsheets that she had made to track how the program’s grants were spent. Shotland found her method of management difficult. 

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She left the university in 2022 partly because of financial management concerns. She now teaches at Carlow University, where she says that she logs into a software system and can easily view and update her budget in real-time. That didn’t exist at Chatham, she said.

“In my role, as the director of Words Without Walls, it was extremely important for me that I was accountable to the incarcerated students and the MFA students that I worked with,” Shotland said. “In the absence of a system that is clear and consistent, it makes accountability almost impossible.”

A student walks through Chatham University’s campus, in Squirrel Hill North, on Tuesday, Sept. 19, 2023. (Photo by Stephanie Strasburg/PublicSource)

Brian Mittendorf, a professor at The Ohio State University who specializes in nonprofit accounting, said it’s unclear whether Chatham’s use of Excel spreadsheets reflects a poorly managed accounting system. The practice could be helpful, he said, because it allows faculty to confirm whether documented transactions are accurate.

“I hate to say the presence of Excel in and of itself is an issue because it just depends on how that plays out,” he said. Still, practices that call into question a university’s ability to carefully track grant- and donor-restricted funds can be concerning – even if there isn’t an underlying problem, he said.

“I don’t think ‘chaotic’ is something anyone would want as a descriptor of an accounting system,” he said.

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Questions about administrative oversight

A program director who is also a professor at Chatham described a lack of administrative oversight of their program budget. 

People walk through Chatham University’s Squirrel Hill campus on Tuesday, Sept. 19, 2023. (Photo by Stephanie Strasburg/PublicSource)

The professor said that they attended annual budget meetings where they would present the amount of money they intended to spend on their program in the next three years. There, they said that Jenna Templeton, the former vice president for academic affairs, and Jennifer Hoerster, the former vice president of finance and administration, would “just shake their heads and go, ‘OK, yeah, that seems reasonable.’”

“It was just the most ridiculous thing I’ve ever been in,” the professor said. Templeton and Hoerster did not return calls and emails from PublicSource. 

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The professor said they would not receive confirmation that their budget had been approved after the meeting, so they “just spent the money.” The administration would provide monthly budget updates, but the information would be months out of date, they said. They estimated that they once went over budget by a couple hundred dollars.  

“There was never any question about the spending,” they said. “It seemed like every year, we would get an email that said, ‘Oh, we need you to cut [the budget] by 3%.’ And I would make ridiculous cuts here and there, which were meaningless because I would just keep spending whatever, because I never knew what I was supposed to be spending anyway.”

Collyer, who previously served as a program director at Chatham, said that he would receive confirmation in October that his budget had been approved after presenting it to the administration in May. He said he would occasionally go over budget in some areas, likely by just a few hundred dollars, without repercussions.

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Phillips announced the departures of Templeton and Hoerster in a late June email to faculty and staff. The email did not detail the terms of their departures. Templeton had served in her role for more than eight years, while Hoerster had held her position for about 10 months. For about five years prior, Hoerster had served as associate vice president of finance and administration.

Hoerster’s predecessor as vice president was Walter Fowler, who served in the role for nearly 20 years until retiring in September 2022. Contacted by phone, Fowler said he hadn’t been involved with Chatham’s finances in more than a year and didn’t want to talk. 

People walk through Chatham University’s campus, in Squirrel Hill North, on Tuesday, Sept. 19, 2023. (Photo by Stephanie Strasburg/PublicSource)

Sheryl St. Germain, who retired from Chatham in 2019 after serving for 14 years as director of the masters in fine arts program in creative writing, said she learned early in her tenure to keep scrupulous records about her program’s finances. In the annual budget meetings she attended, administrators would provide budget spreadsheets that conflicted with her records and suggested misallocated funds, she said. 

Though she recalled that the university would correct the errors she identified, she described the process as “very painful and anxiety-producing.”

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“I would wind up just very angry when I walked out of these meetings, or extremely upset. And on a couple of occasions, I was crying,” St. Germain said. “I did fight very hard to make sure that those discrepancies were resolved. …

“It was just a nightmare, honestly, to try to balance the budget with these people.”

Changes at Chatham?

In late September, Phillips informed staff and faculty via email that the university was creating an Office of Research and Sponsored Programs to help administer grants and contracts across the university, among other responsibilities.

Collyer was pleased with the office’s establishment. He said that Phillips informed faculty that the office would help faculty manage their grants, which he hopes will mean that other personnel will be involved in the budgeting. 

“President Phillips appears to be rather progressive in this regard,” he wrote in an email. “I am optimistic about our future.”

Correction: Chatham’s campus is primarily in Squirrel Hill North. A prior version of this story placed it in another neighborhood.

Emma Folts covers higher education at PublicSource, in partnership with Open Campus. She can be reached at emma@publicsource.org.

This story was fact-checked by Rich Lord.

Higher education reporter for PublicSource in partnership with Open Campus.