Debate over obscure, controversial financial management by the LSU System that could cost the University millions was re-ignited Wednesday at a Faculty Senate meeting.
Faculty members grilled LSU System President John Lombardi and CFO Wendy Simoneaux over $16 million they believe the System is cheating LSU.
“This sounds like fraud,” said accounting professor Larry Crumbley. “This is money laundering.”
The debate centers on how the System plans to dole out its $43 million share of the state’s $97 million Higher Education Initiatives Fund.
The state’s higher education institutions are slated to donate tuition money to the HEIF this year, which the state will replace with general fund money. The tuition money will be carried over to the next year to stave off lost federal funding.
The System plans to distribute less money to LSU than the University put in proportionally. Faculty members interpreted that as sending LSU tuition money to other campuses.
“Your distribution is backward — it is irrespective of what money you put in,” said Suresh Rai, electrical engineering professor.
Faculty members pointed to figures released by the Board of Regents that distributed HEIF money proportionally — giving LSU about $16 million more than it would get under the System plan.
When asked if other systems were using a similar method, Lombardi said “they are waiting for the Regents to fix their distribution so we don’t have this conversation.”
Lombardi also said the LSU System faces unique problems because it has health centers and other programs, which “distort” its funding metrics.
Because those programs don’t raise much tuition, the loss of federal stimulus money hurts them more than schools like LSU. That means they get more money for their size.
Faculty members argued that provides a disincentive to raise tuition, punishing institutions for self-sufficiency.
Lombardi made it clear that LSU’s funding wouldn’t technically be cut if the System plan passes — he said LSU would just be getting less extra money next year than it could to prevent budget cuts elsewhere.
“The strategy is not to take from my neighbor to enrich myself,” he said. “We are trying not to destroy whole parts of higher education while providing windfall profits to others.”
Lombardi also said it was politically important to protect institutions all over the state, to prevent provoking legislators from certain districts.
Simoneaux said the System’s distribution matched plans in Gov. Bobby Jindal’s budget aimed at getting federal money from the EduJobs bill.
The state can’t get that money if it leaves higher education institutions unfunded.
Some faculty questioned whether the System’s management would void the EduJobs money anyway.
“I am worried that this is an accounting gimmick,” said biology professor Dominique Homberger. “Will the federal people buy this?”
Homberger referenced last year’s legislative session, when the state missed the EduJobs money despite financial maneuverings aimed at earning it.
Simoneaux said the question could only be answered by the Governor’s Office.
 
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Contact Matthew Albright at [email protected]