TSU trustees receive training on "financial exigency," board takes no immediate action

Tennessee State University trustees held an informational training on financial exigency during their Jan. 31, 2025, special meeting, hearing from consultant Diane McCormick about how institutions define, declare and manage severe fiscal crises. The board did not take any TSU-specific financial action during the session.

McCormick, who said she has served as a higher education chief financial officer and as a Higher Learning Commission reviewer, defined financial exigency as "a formal declaration signifying a severe and imminent financial crisis that threatens an institution's ability to fund core academic and operational function in both the short and long term," and walked trustees through common causes and consequences of such declarations. She emphasized that declaring exigency is a lengthy, data-driven process that typically involves faculty, administration and the governing board and that accrediting agencies can require teach-out plans and monitoring when exigency is declared.

McCormick reviewed sector-wide trends she said increase the risk of fiscal distress, including a 2017–2022 enrollment decline she cited (about 1,800,000 students), reductions in state appropriations since 2008, growing deferred maintenance (she cited an estimate of $112,000,000,000) and rising competition that has led many institutions to increase tuition discounting. She described the American Association of University Professors (AAUP) guidance that faculty must be meaningfully involved, and she urged trustees not to delay notifying accreditors when problems arise: "Don't, don't put it off," she said.

The presentation included case studies McCormick said she examined: Southern University (declared exigency in 2011 after a steep state-appropriation drop and enrollment declines), Lincoln University (declared in May 2020; McCormick said the university terminated 25 faculty and later launched a set of recovery initiatives) and Henderson State University (faced a roughly $12.5 million projected deficit and later cut staff and restructured). She used those examples to illustrate possible measures — program consolidation, salary/furlough actions, position freezes, third‑party consultants and targeted revenue steps such as leasing facilities or pursuing restricted philanthropic support — and warned that some options, particularly those affecting tenured faculty, are governed by AAUP standards and may require long lead times and careful legal consideration.

Trustees asked about timelines for seeing savings from restructuring, the role of accreditors and state governments, the makeup of ad hoc financial-exigency committees and how students can be engaged. McCormick recommended early, frequent campus communication, a layered ad hoc committee structure with heavy faculty involvement and inclusion of student government for appropriate outreach. She also identified consultants trustees might consider and urged trustees to review TSU's own financial-exigency policy and the AAUP guidance she referenced.

Interim President Tucker and members of the board framed the session as part of a broader effort to "level set" on institutional finances; Chair Winton and trustees thanked McCormick for the overview. The board did not vote to declare financial exigency or to authorize TSU-specific fiscal actions during the meeting.

Materials referenced during the session — including AAUP guidance, case-study summaries and consultant listings — were presented to trustees and noted as available to board members for follow-up. The board's next steps, as recorded during the meeting, are to review the materials, continue internal analysis and, if needed, convene further deliberations that would follow the university's policy and any applicable state or accreditor requirements.