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University of Wyoming board 'swept' more than $100 million from various campus accounts

University of Wyoming board 'swept' more than $100 million from various campus accounts

University of Wyoming

Students walk to and from the University of Wyoming Union building during the 2017 winter break in Laramie. The school's board of trustees took control of as much $140 million that had been in hundreds of accounts across campus, causing concern and frustration.

The University of Wyoming’s board of trustees swept as much as $140 million that was under the control of various departments and units across campus into its own series of accounts last year, a move that frustrated faculty, prompted the board president to apologize and eventually led the Legislature to strip $15 million from a school funding request.

“It’s screwed us up,” said Faculty Senate chair-elect Donal O’Toole, who teaches in the Veterinary Sciences Department. “If you want a technical answer, it screwed us up. Real bad.”

O’Toole’s department lost hundreds of thousands of dollars in the sweep, which some faculty referred to as a “scrape.” The Associated Students of the University of Wyoming — the school’s student government — lost $628,000, said former president Ben Wetzel. The scraping or sweeping was felt across campus: UW President Laurie Nichols told the board in June that the money was spread across as many as 1,000 different accounts.

For student government, the money — student fees that helped fund recycling and student media programs — was held in reserve accounts. O’Toole said the funding his department lost had been used to help run the state diagnostic lab and to send faculty to conferences.

Across campus, this money was decentralized and under the control of various departments, units and deans. In some cases — like with student government — the money was effectively in a savings account. Elsewhere, it came from federal grants, student fees, tuition revenue — a broad range of sources that were outside of the control of the school’s board.

Nearly a year later, several officials weren’t sure how much money was swept. UW spokesman Chad Baldwin said the total was “in the ballpark” of $140 million. O’Toole said it was more than $120 million. Dave True, a member of the board who’s set to take over as president, said that those numbers “are about right.” State Sen. Bruce Burns said he understood the total was $138.8 million.

“The motivation for me was to have a better opportunity to manage the overall financial resources of the university,” True said Thursday. “If you’ve got 700 to 800 individual accounts that are scattered around with multiple signature authorizations, it’s a real challenge to prudently manage all of those different financial resources.

“It wasn’t to strip those resources from the appropriate spending authority,” he continued, “but it was a prudent step to better exercise our fiduciary responsibility for stewardship of the overall financial resources of the university.”

Consolidation plan

In June and July, the board moved to consolidate all of these accounts into seven reserve accounts that the trustees would control. These new pools are for the university’s general counsel ($5 million), a passenger plane reserve account ($1 million) and special projects reserve ($37.7 million), among other purposes.

The move was made despite the reservations of various groups and officials — including UW President Laurie Nichols — across campus, meeting minutes show. Wetzel later wrote a letter “respectfully demand(ing)” that the student government’s lost money would be earmarked for the organization.

“(Nichols) reemphasized the need for action and stated that simply sweeping the funds without a policy was not a way the University should be operated,” according to minutes from the June meeting.

Those minutes document administrators’ attempts to ring the alarm about the perils of pooling the money: Provost Kate Miller, who like Nichols is relatively new to UW, told the board that she “spent a year building trust and creating transparency across campus, ensuring that money would not be swept or taken away because a process was in place that everyone was aware of.”

Department and officials from across campus “had plans for that money,” Miller told the board, “but it would now go away, which would create a very difficult situation for the Provost and the administration when working with those people.”

In any case, the board made the move anyway. Then-board president John MacPherson told Nichols and Miller that the board had an obligation to address the accounts and that if the administrators had a better way to handle it, he was all ears. Spokesman Chad Baldwin told the Star-Tribune that the board wanted to pool all of the funding into centralized accounts that trustees could control and monitor.

O’Toole said he suspected the move had more to do with the university’s recent financial problems. The Legislature cut more than $41 million from the university in the wake of the 2015 economic downturn.

The board “had no idea what they were doing,” O’Toole said. “Nobody actually asked the question, ‘Is this money working? Is this money doing stuff?’ Yes, this is working money we need to survive as departments.”

Strings attached

It quickly became apparent that pooling this money was a mistake, Baldwin said. Some money — like the federal grants — had strings attached. Others were set aside for specific purposes.

At the July meeting, trustee Dave Bostrom apologized.

“He stated that the trustees had thought they had asked the right questions, but noted that their action had created some consternation across campus,” according to the minutes for that meeting. The trustees, Bostrom said, had not asked the right questions and did not understand the needs of the colleges, nor did they understand the sources of the funds.

“When I do something, like take a deep dive off of a cliff, I like to know what the likely consequences are,” O’Toole said. “ ... It would be good for them to know that if they make a mistake, the mistake can be potentially serious. What we’d really really like to see is the little tiny word: ‘sorry.’ But we’re not going to.”

The board began setting dollars aside for the units and departments who lost chunks of money, Baldwin said. But O’Toole said the faculty were “assuming the worst” and that they would get “cents on the dollar” compared to what they previously had.

Big implications

The board’s decision may have had implications beyond upsetting the campus. O’Toole suggested that lawmakers pulled funding for the university’s Science Initiative because of the situation. Initially, lawmakers had committed to providing $100 million for the project. But the Senate scaled that back. Burns said the sweep played a role in that decision.

He told the Star-Tribune last week that he didn’t think the centralization of the money was a bad thing. But he said the Legislature didn’t know the university had nearly $140 million in reserve accounts.

Eventually, lawmakers agreed to pay for $85 million worth of the Science Initiative, and the university was tasked with coming up with the other $15 million. Burns said at one point, some senators wanted to give UW less than $70 million.

True declined to speculate about the Legislature’s motives, but he said the board was informed that lawmakers had discussed the sweeping of the funds.

University officials have said that UW will use reserve funds to pay for their $15 million share of the Science Initiative. Baldwin said some of that money may come from the swept accounts.

Multiple faculty members, who declined to speak on the record for fear of reprisal, said they had no idea where the money had gone. O’Toole said some units and departments didn’t realize they’d lost money — or how much — until months later.

“Money disappeared,” O’Toole said. “It just vaporized.”

True, who stressed that he spoke only for himself and not the entire board, acknowledged that there were “certainly things” that the board could have done differently.

“Certainly one of the things that could’ve been handled better is a more exerted effort on identifying those funds that shouldn’t move,” he said. “There have been some reversals and refunding of some of those accounts that have been identified that really need to stay where they were.”

Follow education reporter Seth Klamann on Twitter @SethKlamann


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Education and Health Reporter

Seth Klamann joined the Star-Tribune in 2016 and covers education and health. A 2015 graduate of the University of Missouri and proud Kansas City native, Seth worked for newspapers in Milwaukee and Omaha before coming to Casper.

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