Finance committee reviews updated budget outlook; trustees press for clear reconciliation schedule and transition plan for consultant support
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Summary
Finance committee members heard an improved tuition revenue forecast driven by higher annualized FTE, the late‑August registration purge and more timely federal loan disbursements, and were told an October revised budget will be presented in November.
The Tennessee State University finance committee met Sept. 18 and reviewed updated revenue projections, staffing gaps, and the university’s use of outside partners to close financial and operational gaps.
Consultants from Alvarez & Marsal told trustees that an August–September registration purge, combined with foundation scholarships and student loan acceptances, produced a material improvement in the university’s tuition cash outlook: the administration’s “latest thinking forecast” (LTF) shows roughly a $5.2 million improvement versus the June-proposed budget because of higher annualized FTE (45,550 projected versus the 42,504 used in the June budget) and improved cash from predictable Title IV disbursements. Jim Grady (Alvarez & Marsal) and Bradley White (interim finance) cautioned that the LTF is preliminary and that the university will present an October revised budget at the November board meeting with updated reconciliations and year‑to‑date actuals.
Trustees asked for a complete, auditable schedule of reconciliations and asked whether the university could produce actual‑to‑budget and forecast‑to‑budget views (revenue and expense) for the board; administration said system record issues and legacy purchase‑order encumbrances required cleanup before that report is accurate and that cleanup is underway with assistance from TBR and SIG.
Committee members pressed for clarity about contracts and costs. The finance committee discussed external support agreements: TBR’s contract (annual value presented as up to $850,000 in worst‑case full staffing), a THEC assistance agreement for financial‑aid support (budgeted to $200,000), and SIG’s work (cybersecurity, Banner/Banner‑adjacent fixes, financial‑aid and process improvements). President Tucker and finance staff said TBR resources are billed only for staff time deployed, TBR will help with bank reconciliation and audit follow‑ups, and the administration is prioritizing hiring so that consultant roles are temporary and knowledge will be transferred to permanent employees.
The committee reviewed a short list of otherwise unbudgeted items added since June (TBR assistance, recruitment and enrollment investments, THEC contract, audits coverage) and also offsetting savings (vacant positions). Overall, the committee was told those adjustments net to a modest increase to the deficit at this stage but that the better tuition outcome from the purge and improved federal loan timing materially aided cashflow.
Why it matters: trustees emphasized the need for a clear, auditable month‑by‑month reconciliation schedule and documentation showing when external contractors step away, how knowledge transfer will occur and which permanent hires will replace contractor functions.
Discussion vs. decision: the committee adopted routine minutes and heard updates; it did not take final action on the revised budget at the Sept. 18 meeting but directed staff to present the October revised budget at the November meeting.