Furloughs, hiring freezes, layoffs hit Averett amid cash crunch blamed on 'misrepresentation' of finances (2024)

Facing a crunch for cash, Averett University implemented a nine-week furlough — one day per week — for 12-month staff members and reduced pay for senior-level employees following a discovery on Good Friday of what’s being termed as a “misrepresentation” of finances.

In addition, a “handful” of positions were eliminated, Averett President Tiffany Franks confirmed to the Register & Bee in a Wednesday afternoon interview. There’s also a hiring freeze for positions that aren’t considered “mission critical.”

It was March 29 — Good Friday — when Averett President Tiffany Franks learned of the financial picture that didn’t conform to data previously presented.

“There were some reports and things just weren’t adding up,” she explained to the newspaper in her office that overlooks the front of Averett’s main hall. “We could see we had misrepresentation in what was being reported.”

Essentially there wasn’t as much money as Franks and the board thought, she confirmed.

“Our current cash crunch is the result of the mismanagement of the school’s finances” by an individual who “misrepresented both the facts and the numbers as regards to the school’s financial position to both the president and our Board of Trustees,” spokesperson Cassie Jones in an email response to the Register & Bee earlier in the week. “Fortunately, we uncovered this pattern in time to turn what is a challenging situation into a very fixable one, and the cost cuts we’ve implemented will set us on the right track for our next school year.”

Upon the findings, Franks relieved the university official of responsibilities, she told the newspaper.

“We immediately went to work, quite feverishly, to really understand what was happening,” she explained. “We surrounded ourselves with some exceptional people and experts.”

The president said there were “definitely checks and balances” when it came to the university’s financial picture, but those efforts have recently intensified.

“The president, senior leadership and the board have taken proactive steps to increase financial controls and ensure that such gaps in the flow of information cannot happen again,” Jones said. “Collectively we are laser-focused and resolute in reengineering a conservative, responsible budget for the next academic year that positions us well for the future.”

Franks and Jones both confirmed — to their knowledge — there’s no evidence of criminal activity. Danville Police Department spokesperson Matt Bell told the Register & Bee that authorities had not received reports surrounding money issues at the university.

Jones said the president and the board members were not receiving accurate information.

Franks explained that while “learning and discovering” what had transpired, they needed to “do some things to make certain we were living within our means.”

For employees, that translated into a furlough day — meaning they lose a day of pay — each week from June 2 through Aug. 3 for 12-month, full-time workers. Jones noted that those who are 10-month staff members were not impacted.

Those in the senior leadership team — roughly eight people — had salary reductions. Those paycheck cutbacks also include Franks.

Letting them know

Franks gathered the staff together to explain the situation and measures being taken.

It was an in-person affair, because she would “never do an email” about such a matter.

“We just addressed it head-on,” she said of the gathering that lasted about 30 minutes. Some board members also attended.

“I just told them like it was,” she said. “What we discovered, what we were doing about it and how we would all work together, moving forward to get it right.”

Franks likened the financial ordeal to finding out a health issue. First a person gets diagnosed, then goes about being treated.

“This was acute. This is challenging. This is fixable,” she related to the staff multiple times.

A wide range of emotions were brought out for staff members.

“It was hard on a personal level, for obvious reasons, because our people are having to make sacrifices,” Franks said, acknowledging it’s a hard situation.

“What separates us are our people,” she said of the university. “Our people are just remarkable in term of how they give and their devotion to students and their community.”

Right after the meeting — and continuing in the weeks since — she said staffers have reached out via email with support, many singling “hey, we’ll push through,” she said.

“When Averett goes through some of its greatest challenges … we are at our best and this time is no exception,” Franks explained. “I just think the Averett spirit prevails.”

Another means of tightening the money belt was looking at roles around the university that could be eliminated.

“There were a handful of positions, as we really looked at efficiencies across the campus and said ‘where do we know we are not being as efficient as we need to be,’” she said.

Jones confirmed that three positions were eliminated.

For the moment, no programs are facing the chopping block, but that’s always an ongoing conversation even not in the midst of a financial strain.

Not alone

Franks said Averett isn’t alone when it comes to money pain with “headwinds” coming at colleges and universities.

A lot of that’s blamed on what’s called a “demographic cliff,” since fewer children were born in 2008. There’s also a trend that’s steering high school graduates into trade industries instead of taking the college path.

“When you look at so many institutions that are really tightening their belts and find themselves in really challenging cash-crunch times,” she said of enrollment being down.

Locally, Averett is bucking that state and national trend. In fact, there’s a 50% growth expected in online enrollment, which makes up about 40% of all enrollment, Jones, who is the associate vice president of university marketing and communications, said.

“We are currently on track to meet or exceed our traditional student enrollment goals for the entering class, as well, and are seeing increased retention and persistence numbers including a marked increase among our most vulnerable student populations,” Jones told the newspaper.

Franks points to the integration with the community for the strong student numbers.

“We are just serving and supporting the community in so many ways and that’s contributed to our success in so many ways,” she said of responding with programs of study that correlate with local industry trends.

“Our relationship with our community is a really differentiator,” Franks said.

Making it work

Since the problem didn’t emerge overnight, it won’t be fixed in a quick order.

“We’ve got to be sure that as we are fixing, we’ve got to keep building on the momentum that we have and that’s momentum that a lot of other institutions don’t have,” she said.

By fixing, that includes “reengineering” the budget to make sure they are “positioning ourselves as strongly as we can for our future,” Franks said.

In the last 40 days or so, Averett has received close to $750,000 from donors.

“Our donors, they’ve been so supportive,” Franks said. Most of the money comes in unrestrictive forms, meaning the university can use the cash in many ways instead of it going to just one program of study, for instance.

Members of the board of directors also have jumped in offering help and support.

“Our board, they’ve been right beside us since Good Friday,” Franks said. “They were the first call I made.”