About a year ago, some University budget officials and College of Fine Arts representatives noticed a problem.
That problem took the shape of a $555,000 budget deficit between two accounts within the college.
"These kinds of problems are not terribly unusual," said Max Kerlin, UNM director of Resource Management. "They have had deficits going back some time."
The two separate accounts, the dean's contingency and the Music Department, have actually been in the red for at least the past six fiscal years, Kerlin said.
At the end of the last fiscal year, the college's Music Department reported a deficit of $319,000 and the dean's contingency account held a $236,000 deficit.
The dean's contingency account houses money that is considered "unencumbered" and can be used by the dean as seen fit. It is also used to house money that comes from savings generated by faculty salary not being used.
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Kerlin said the financial situation of the two accounts can be sourced back to at least two major causes: How and when faculty vacancies are filled within the college and strategic issues facing the Music Department.
Faculty vacancies
Christopher Mead, interim dean of the College of Fine Arts, admitted the filling of faculty vacancies is one of the reasons for the deficit, but, he added, it also will be the solution to the problem.
When Mead was hired as interim dean, he picked up on the college's financial situation.
"It was then I realized we were heading for a train wreck," Mead said.
When a faculty position becomes available, Mead said, there are costs associated with filling that position such as search costs, moving and start-up expenses. But, the only way colleges and schools can afford those costs is to save the money that normally would be spent on that position's salary. When positions are immediately filled, cost can add up, Kerlin said.
Expenses for filling faculty vacancies come from the dean's contingency account, Mead said.
After being named interim dean, Mead initiated a hiring freeze last year to prevent the problem from getting out of hand.
Because of that move, the account's deficit increased only slightly from $230,000 to $236,000, Mead said.
Now, Mead said, the University's plan to reduce the account's debt in the next five years is to impose a mandatory one-year waiting period for filling new college positions. During the one-year period, faculty vacancies will be filled by temporary or part-time professors, positions that have a smaller salary.
Music Department
"The Music Department is gradually recognizing it has some decisions to make," Kerlin said.
The department's deficit, which has exceeded $175,000 for the past six fiscal years, can be attributed to several sources, said Steven Block, Music Department chairman.
"The Music Department impacts the University in several different ways," Block said. "It's a very different kind of animal."
He points to three major causes behind the department's six-digit deficit: The large number of part-time hires within the department, the number of musicians who are required to run some programs such as orchestra and marching band and that the department has only half as many tuition waivers as it needs.
The large number of part-time faculty, Block said, required to maintain the department's various programs and activities naturally costs a large amount of money.
The marching band is also one example of a program that is needed but does not create a return for the college because no member majors in marching band, yet its appearance is needed at several UNM functions.
An additional cause for the deficit is that when the marching band or the orchestra needs a position filled, it must do whatever is needed to fill it. This includes offering students scholarships that the department cannot afford, but must supply.
"Scholarships is an area we are spending more money than we have" Block said.
Block also said tuition waivers for students need to be increased to save department funds.
What now?
Kerlin says the Provost's Office has already made arrangements with college officials to completely reduce both account deficits within the next five years.
"From my perspective, this really is a kind of success story," Mead said.
One positive component coming from overcoming the massive deficit, Kerlin says, can come in the form of administrators who place an increased importance upon financial management and departments with increasingly focused goals.
But both Block and Mead agree that the account deficits will not have an effect on class schedules or majors offered.
"Rather than being cut, we are looking at a remolding of the arts," Block said.
