Despite Endowment Gains, FAS continues with cuts

FAS Enters Final Stage of Cuts

By Noah S. Rayman and Elyssa A. L. Spitzer, CRIMSON STAFF WRITERS

Published: Friday, September 10, 2010

The coming academic year will pose the greatest budgetary challenges the Faculty of Arts and Sciences has faced since the Great Recession struck in 2008, as FAS Dean Michael D. Smith has predicted over the past few months.

The University’s largest school made considerable progress since early 2009, closing nearly $185 million of a $220 million deficit. Now Smith pledges to eliminate the remaining $35 million deficit by the summer of 2012.
“Dean Smith has often stressed that this year would be the most challenging financially,” FAS spokesman Jeff Neal wrote in an e-mail yesterday.

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UC Establishes Budget Cuts Task Force

UC Establishes Budget Cuts Task Force

Published On Sunday, September 27, 2009 11:47 PM

By MELODY Y. HU
Crimson Staff Writer

In its inaugural meeting of the school year, the Undergraduate Council voted yesterday to establish a Budget Cuts Task Force, which the Council hopes will serve as a “centralized mechanism” for communication between students and the administration regarding budget cuts.

The ad hoc task force is charged with “coordinating all of the UC’s work as it relates to the budget cuts,” including advocacy for revisions to proposed cuts, recommendations for future cuts, solicitation of student feedback, and expression of student ideas and concerns, according to the legislation.

The task force is expected to work closely with the student life and College academics ad hoc working groups, which were commissioned in May by Dean of the Faculty Michael D. Smith to make recommendations on budget cuts to the administration.

“It’s really important that we have centralized mechanisms for us to communicate with the working groups,” Andrea R. Flores ’10, UC president and one of the co-sponsors of the legislation, said during the meeting.

“[Budget cut discussions] are going on in all dining rooms, all dorm rooms, in all UC committees,” said Mather representative and legislation co-sponsor Eric N. Hysen ’11. “The task force’s role is making sure all of those conversations are going towards a productive end.”

The ad hoc task force will be comprised of at least 5 UC members, who will be selected in an application process at the discretion of the UC Executive Board, though meetings will be open to all students.

Flores and Vice President Kia J. McLeod ’10 emphasized that student commitment and proper representation of all the UC committees would be important factors in selecting the members.

Although specifics of the task force’s operations have yet to be decided, Hysen said it is likely to be one of the most active divisions of the UC this semester.

“Our goal is to have [the task force] up and running very quickly,” he said.

The Council also passed legislation supporting the administration’s decision to consider reforms to the Administrative Board.

Based on the recommendations of a faculty review committee of the Ad Board, commissioned last year at the suggestion of the UC, Dean of the College Evelynn M. Hammonds announced several major Ad Board reforms at a Faculty meeting in May.

One reform reduced the size of the audience that students face in Ad Board hearings from 35 administration and faculty members to a smaller sub-committee. Students will also have greater flexibility if they wish to select an advisor other than their resident dean.

Another reform that will be considered by the Faculty this semester will broaden the range of possible sanctions for first-time academic dishonesty.

“The Ad Board hasn’t been changed in over a century,” said Hysen, who co-sponsored the legislation. “This is one of the more significant things the administration has done.”

“We should commend the administration when it does really good things for student life,” Flores said.

—Staff writer Melody Y. Hu can be reached at melodyhu@fas.harvard.edu.

Main Article about Layoffs from Harvard Magazine

"Resizing," before "Reshaping"

“Looming Layoffs,” July-August 2009
“Liquidity and Leverage,” July-August 2009

No weekday hot breakfasts in House dining halls. Continued constraint on faculty appointments (a total of just 15 to 19 junior-faculty searches in 2009-2010, down from as many as several dozen in recent years), and severe limits on visiting faculty, lecturers, and appointments from other Harvard schools: all pointing to more limited course selections. Reduction of junior-varsity baseball, basketball, and hockey to club status. Teaching-fellow and external teaching-assistant “allocations” under “close scrutiny,” to “ensure compliance with new and existing guidelines on section sizes”—presaging larger discussion sections. A previously announced decrease in doctoral-student admissions—adding to pressure on the future supply of teaching fellows. Thermostats lowered in winter and raised in summer. Lessened reliance on consultants, and tighter travel and entertainment budgets.

These are among the measures listed on the Faculty of Arts and Sciences (FAS) cost-saving website, unveiled on May 11 (www.fas.harvard.edu/home/planning). The academic, administrative, and extracurricular changes are merely those expected to be readily apparent come fall. Neither the economies linked to each measure nor the implications for employees are disclosed, but the actions are meant to realize $77 million in annual savings.

Unfortunately, these steps, characterized by FAS dean Michael D. Smith as a “resizing” through “better use of resources and increased efficiencies,” close only one-third of his faculty’s budget gap. In a community meeting on April 14, he disclosed that Harvard’s largest academic unit (the College and Graduate School of Arts and Sciences)—and the one most hard-pressed, in absolute terms, by the sharp decline in the endowment—faces a $220-million shortfall by the 2010-2011 academic year. FAS received $550 million in endowment distributions to fund operations in fiscal year 2008 and $650 million this past year. It had expected $750 million in the year now beginning, and more thereafter—but instead will be reduced to about $600 million now, and still less in fiscal year 2011. (“A New Economic Reality,” May-June, page 48, reported both the Corporation’s decision to reduce distributions from the endowment for the fiscal year begun this July 1 and again for the following year, and the pressure on other revenue sources.)

The $220-million gap is nearly 20 percent of FAS expenditures in the year just ended. Complicating any economies in the roughly $1.1-billion budget for the new fiscal year, perhaps $375 million is for items that cannot or, for reasons of University policy, will not, be cut: financial aid, sponsored research, and debt service. In fact, each of those items is increasing in the new fiscal year. That still leaves FAS to reduce the cost of its core academic activities by nearly 20 percent.

Smith announced at the meeting that he would charter six working groups (their financial goals yet to be disclosed) to produce cost-cutting proposals from now through spring 2010: arts and humanities, science, social science, College life, College academics, and engineering and applied sciences. Their goal, he wrote bluntly in a May 11 letter, is “a reshaping of the FAS in support of our teaching and research mission through a careful consideration of our academic and programmatic priorities.”

What “reshaping” will entail—perhaps closing or consolidating research centers, or retirement incentives for faculty members—is the subject of anxious speculation, even as the first round of efficiency measures is implemented (see “Looming Layoffs,” page 56). At the May 19 faculty meeting, Francke professor of German art and culture Jeffrey F. Hamburger asked what was meant by “structural change,” as a prelude to the working groups’ assignment. “It’s difficult to make constructive suggestions without some kind of meaningful framework,” he said. He wondered whether there were plans to merge or eliminate departments, and if so, to cut faculty or staff.

President Drew Faust said she hoped that where multiple University units addressed an issue—such as healthcare policy—ways might be found for intellectual collaboration and administrative efficiency. Smith said that the faculty had to examine the intellectual areas it most wished to tackle in the future, and to focus on how to pursue them with the available resources.

Pellegrino University Professor Peter Galison, an historian of science, said he could identify only two “ten to the eighth” (i.e., hundred-million-dollar) opportunities for meaningful savings: debt service and buildings, which were already incurred and in place; and the size of the faculty, which has grown by more than 120 positions this decade. In the end, he said, FAS would “have to be a smaller faculty than we are now,” so it made sense to stop talking about that prospect “in code.”

By planning for a 12 percent reduction in FAS’s endowment distribution for fiscal year 2011 (the Corporation has indicated a cut of “at least” 8 percent), Smith has seemingly built in a budget margin. But financial aid may rise further; past decisions have yielded a still-growing faculty and costly new labs; and faculty and nonunion staff are already going without salary increases.

Although attention focuses on FAS, similar issues play out across Harvard: for example, the Radcliffe Institute for Advanced Study, proportionally the most endowment-dependent academic unit, has reduced by 20 percent its number of fellows in the coming year. The same story is unfolding at comparable institutions that grew increasingly reliant on copious funding from their endowments—until last fall.

On April 1, Moody’s Investors Service, the credit-rating agency, issued a report maintaining its Aaa and associated ratings on the University’s debt, while taking into account “the deleterious effects of the global financial crisis and recession” on its finances. Moody’s reviewed Harvard’s remedial actions, observing that in the next few years “the University will face constraints in its capital program while also dealing with a significant reduction in revenues available to support its operations from endowment.” That said, the credit analysts advanced a “stable” outlook, in the context of one large risk: “[T]he University is more exposed than other organizations (outside of higher education)…to rapid and large additional declines in investment markets, given the magnitude of its balance sheet and equity exposures and the high reliance on endowment income over the long term for operations.” (For more perspective, see “Liquidity and Leverage,” page 52.)

Some other universities with diversified, complex portfolios report on their results throughout the year. In documentation for a bond offering this spring, Cornell disclosed that its investments, down 27 percent as of December 31, had depreciated to a 31 percent loss two months later (an estimate that did not include updated, quarterly valuations of private-equity and real-estate investments). In the meantime, it has more than quadrupled relative holdings of cash from the beginning of the year. The University of Virginia Investment Management Company’s March 31 report also indicated a sizable increase in cash, in part to be ready to make mandated future investments in private asset pools.

Both reports suggest what will attract notice when Harvard Management Company reports fiscal year 2009 performance in late summer: how defensive the portfolio has become (insulating against current losses, but depressing potential returns), and what results large holdings of illiquid and hard-to-value assets have produced.

In the meantime, Princeton president Shirley M. Tilghman on April 6 notified her community that the financial markets had “unhappily” not improved from the beginning of the year, compelling a further round of budget cuts for fiscal years 2010 and 2011—following similar rounds of deeper cuts announced by Yale and Stanford. Tilghman forecast uncomfortable pressure on endowment spending extending beyond 2011, even as Princeton pursues its capital campaign, and concluded, “The steady growth in both faculty and staff that we have enjoyed over the last 10 years will end, and the university will have to contract in size.”

The same is likely for much of Harvard. At the May 19 meeting, Faust said the community faces “very hard choices” and acknowledged, “We have to give some things up.” She urged the faculty to “focus not on what we have lost but on what we still have”—superb libraries, laboratories, students, and professorial colleagues.

For Smith, the immediate problem remains: FAS’s large financial chasm could not be closed in one year, so his working groups face months of effort to find additional cuts. In the future, he said on April 14, “it is increasingly likely…that we will not have a need for as many faculty and staff” as today. How the College and graduate school are reshaped looms as a particularly daunting set of issues for Harvard.

Harvard Sexual Assault Office To Close for July

Harvard Sexual Assault Office To Close for July
Financial constraints cause temporary shutdown; administrators, students disappointed—'We rely on them'

Published On Friday, June 19, 2009 9:48 PM

By PETER F. ZHU
Crimson Staff Writer

The Office of Sexual Assault Prevention and Response, which provides confidential support and counseling for students who have been sexually harassed or assaulted at the College, will close for the month of July due to financial constraints.

Summer proctors were informed of the shutdown during their orientation Thursday—just days before hundreds of summer school students begin arriving on campus—disappointing some administrators and raising concerns among some undergraduates in proctor positions.

"It's a shame," said Christopher S. Queen, Dean of Students for Harvard Summer School, of OSAPR's closing. "That's a real shame, because we rely on them in the summer. Obviously [the students] will have other resources, but the loss of that program this summer was a disappointment to us." According to Queen, over 2,000 students will live at Harvard this summer.

Calls to OSAPR in July will instead be referred to the Boston Area Rape Crisis Center, wrote Faculty of Arts and Sciences spokesman Robert P. Mitchell in an e-mailed statement. He said that during the regular academic year, weekend calls to OSAPR are forwarded to that same Center.

OSAPR Director Sarah Rankin said that ideally students in need of counsel would have someone on campus to talk to. But she added that she understood the University's rationale in making this "painful decision," and that she too hoped students' needs could be met by "piecing together all the things that will be available."

But OSAPR's temporary closing will cause difficulties that stretch beyond the summer months, Rankin said.

"There's projects we've wanted to work on that won't happen this summer—training programs to develop, communities we wanted to reach out to," Rankin said, noting that she and her Office's two other staff members also prepare for freshman orientation over the summer. "Those projects will have to be put on the backburner."

David S. Rosenthal '59, director of University Health Services, said that plans are also being discussed by College and UHS officials to close the Office of Alcohol & Other Drug Services for the month of July, although the UHS Center for Wellness will remain open. He stressed that "nothing is official and nothing has been announced" at this point in time, and also said that services that might otherwise be provided by OSAPR will be addressed by UHS Mental Health Services over the summer, as well as Harvard University Police Department.

Rosenthal said that he was not sure if OSAPR would be able to continue its 24-hour confidential helpline—a service that Rankin said she largely maintains by herself—and that he was not sure what costs savings would be achieved by closing the Office in July.

Rankin said that while OSAPR is certainly far less active during the summer than the normal school year, "we've never had a summer where no people use it at all."

84 Harvard students called or came to OSAPR's Holyoke Center offices during the 2007-2008 academic year, according to the office's Web site.

Queen said he knew OSAPR to be "pretty busy" historically during the summer, since the Office handles harassment and other confidential cases as well as actual assault.

Rosenthal said he hoped that the effects of OSAPR's closing would "not be seen and that there won't be consequences," noting that before OSAPR's establishment in 2003, sexual harassment and assault issues had been dealt with by UHS Mental Health Services.

Queen also said that he believed students would not be at risk in any way over the summer, but that it was simply unfortunate that OSAPR would not be available to support Harvard Summer School.

Despite the availability of alternative counseling resources for students, some summer proctors expressed concern about the decision.

"We don't have the professional experience to help out students when they're victims, and as a proctor, I'm uncomfortable if [sexual assault] happens and I don't have [OSAPR's] knowledge base," said Andrea R. Flores '10, a proctor and the current president of the Undergraduate Council. She said she was worried OSAPR's closing would complicate responses to sexual assault by taking away a centralized source of assistance.

"Perhaps the resources will be sufficient, but I do think it's the College's responsibility to provide sexual assault response resources, and I don't think that should be outsourced," Flores said.

Similarly, Laurel J. Gabard-Durnam '10, another proctor, said "it doesn't seem like a great idea" to close OSAPR while keeping the Wellness Center open, especially given that, based on past years, a case of sexual assault is almost "guaranteed" to happen during the summer.

She said that she did appreciate the fact that other counseling services would be available and that sexual assault helpline numbers were advertised widely and prominently across campus. But resources such as the Boston Area Rape Crisis center are "to be honest, a little far away," and could be intimidating for students unfamiliar with the area.

"It's ironic," she said. "The case they gave me interviewing for the proctoring job was a rape case, and the answer was to do this and do that, and to talk to these people. But now those offices aren't even going to be open."