Georgia Perimeter talks deficit, possible cuts

The interim president of Georgia Perimeter College vowed to have an outline of a plan by next Friday on how the college will cut millions to eliminate a budget shortfall.

The two-year college will not close any campuses, Rob Watts said during a speech to faculty and staff Friday morning. Layoffs, furloughs, larger class sizes, heavier teaching loads and other options are being considered, he said, to close what could be a $25 million deficit next year.

Internal auditors from the University System of Georgia have been reviewing the books and state auditors will do the same. The Attorney's General Office is also reviewing the situation because of allegations of fraud, Watts said.

Georgia Perimeter has been overspending by millions and is on track to end the current fiscal year with a nearly $16 million shortfall. The school has taken one-time actions to decrease the shortfall, but it is expected to borrow about $9 million from other schools to balance the books by the time the fiscal year ends June 30.

This scenario means Georgia Perimeter must cut next year's budget by $25 million. It must pay back the millions borrowed and implement permanent spending cuts to erase the continuing deficit. Georgia Perimeter's budget for next year $195.7 million. What it must cut almost equals next year's budget for South Georgia College.

Watts said any cuts must protect the college's teaching mission and its nearly 27,000 students. While he wants to minimize the impact on faculty and staff; more than 90 percent of the college's expenses are tied to personnel.

"The college cannot simply tighten its belt to reach $25 million," Watts said. "There is no way to get to $25 million without looking all across the college. Again, I want to be very clear with you, no decisions have been made at this point."

Many audience members sat with their arms crossed. Others covered their faces with their hands. Some took notes during the 20-minute speech.

The meeting was the first since staff  learned of the the shortfall. Chancellor Hank Huckaby disclosed the shortfall May 7 and announced that Anthony Tricoli, the previous president, had stepped down. Watts' appointment came two days later.

Watts helped de-mystify some of the "what ifs" surrounding the situation Friday, said Dede Weber, chairwoman of the college's Staff Senate.

"This leaves us with more questions, but he obviously has questions, too," Weber said. "What happened to us was not our choice, but we all have choices on how to respond."

Watts didn't take any questions from the audience, saying his remarks covered everything he knew.

"I know it is frustrating not to know how this happened," he said. "It is frustrating to me as well."

The college has been overspending for the past four years, according to state audits and university system analysis reviewed by The Atlanta Journal-Constitution. Georgia Perimeter used its reserves to balance the books but those funds are now so depleted it won't make a dent in the current problem.

Huckaby declined to explain why the system did not know about the college's financial problems. In a written statement, he said he is considering requiring colleges to notify the central office if they must dip into their reserves and implementing monthly cash flow monitoring. Day-to-day responsibility for managing budgets would remain with the campuses.

Tricoli was reassigned to the central office and the State Board of Regents did not renew his annual contract that expires June 30. Two top finance officials have left the college and Watts said there may be more personnel changes.

Watts has heard people were afraid to speak out about problems under the previous leadership. He encouraged them to speak up if they see problems.