40  Financial Exigency

Approved by Board of Trustees
Effective Date: June 5, 2017
Responsible Division: Business and Finance
Responsible Office:  Business and Finance
Responsible Officer:  Vice President, Business and Finance

I. Purpose

This policy establishes the criteria and process regarding financial exigency at Middle Tennessee State University (MTSU or University), providing for emergency procedures, including reduction in force, should the University experience a condition of financial exigency.

II. Definitions

A.  Financial Exigency. The formal declaration by the MTSU Board of Trustees (Board) that the University faces an imminent financial crisis; that there is a current or projected absence of sufficient funds (appropriated or non-appropriated) for the campus as a whole to maintain current programs and activities at a level sufficient to fulfill its educational goals and priorities; and that the budget can only be balanced by extraordinary means, which include the termination of existing and continuing academic and non-academic appointments.

B.  Reduction in Force. The termination of employment of faculty or staff resulting from a budgetary crisis reflected in a declared state of financial exigency.

C.  Academic or Administrative Unit. An academic department or other similar account-level unit.

D.  Faculty Senate. The major representative faculty body devoted to governance.

E.  Primary Budgetary Sub-unit. A major budgetary area of the University (i.e., Academic Affairs, Student Affairs, Business and Finance) headed by the Provost or a Vice President reporting directly to the President.

III. Actions Required Prior to the Declaration of Financial Exigency

A.  Financial exigency results from an imminent fiscal crisis characterizing the entire University; thus, the condition of financial exigency may not be declared at an academic or administrative level.

B.  In light of the gravity of consequences resulting from a declaration of financial exigency, the process leading to a recommendation to the Board that financial exigency be declared must be cautious, fair, well informed, and as responsive as possible to the interests of various segments of the University.

1.  The responsibility for initiating the proposal for declaration of financial exigency resides with the President. Since recommending the declaration of financial exigency is an extreme measure, that responsibility requires the President to provide all appropriate assurances and documentation that available and reasonable procedures to reduce the expenditure levels of the University are exhausted and that no efforts have been spared to enhance revenues.

2.  Prior to proposing the declaration of financial exigency, the President shall share with the Faculty Senate, and representatives of other University personnel constituencies, all pertinent analysis and documentation that, in his/her opinion, demonstrate an imminent fiscal crisis for the entire University that would warrant a declaration of financial exigency. That analysis and documentation should be shared promptly and with sufficient notice to the Faculty Senate a