Professor of Accounting at Eastern Michigan University Howard Bunsis delivered the results of his external audit of Wesleyan’s finances at Russell House on Friday, Sept. 22, 2023. Wesleyan’s Chapter of the American Association of University Professors (AAUP) sponsored the audit, which comes shortly after the AAUP launched its One Faculty! Campaign in Spring 2023 in an effort to institute a series of policy changes to make tenure track more attainable.

Bunsis has conducted several audits for private universities in the past. At his Wesleyan presentation, he guided the crowd—which filled three rooms in Russell House—and a Zoom audience through approximately 100 PowerPoint slides over the course of the allotted hour and a half. Bunsis covered every aspect of the University’s finances, from investments to payroll, and included key statistics on professorial salaries as well as more student-focused concerns, such as tuition.

 

The State of the University’s Finances

Bunsis confirmed that the University is “in solid financial condition.” The University’s assets—including cash and investments from liquid assets—have generally followed market trends, rising steadily from $1.7 billion in 2020 to $2.3 billion in 2021 due to favorable stock market conditions and endowment growth. Additionally, the University currently holds more than twice its operational costs in reserves: It has $1.8 billion in assets and $512 million of these assets are in reserve. Therefore, no budget cuts are necessary, according to Bunsis.

Bunsis explained that the University’s spending is not excessively dependent on tuition because the University has an adequate endowment. Although the University’s debt has increased due to the construction of the renovated Public Affairs Center and the new science building, Bunsis described the increase as non-concerning. Most of the University’s cash and investments are tied up in mandatory spending or costs necessary to keep the University running, external to the endowment. 

However, Bunsis criticized the board of trustee’s investment habits. In the 2022 fiscal year, 74% of the total investment portfolio was in the riskiest securities, namely Net Asset Value investments (NAV). These investments are not only risky but also relatively negligible, and Bunsis strongly cautioned against them.

“Wesleyan has done about the same as the market with all this fancy investing,” Bunsis said. “It is risky for not a large payout…. I would not be able to sleep at night.”

Bunsis also criticized the language of University fiscal reports as deceptive, which categorize reserve funds as “undesignated,” “working capital,” “essentially untapped,” or “board designated,” indicating these funds would be controlled at the will of the Board.

 

Enrollment and Tuition

After covering investments and University operating costs, Bunsis moved on to the more hot-topic aspects of the presentation: issues that most directly concern students and professors.

Bunsis began by addressing the University’s over-enrollment of students in the class of 2025, explaining that he considers the number of first-year University applications to be less relevant than admitted student figures. In 2021, the University admitted 500 more students into the class of 2024 than into the class of 2023, yet the number of students enrolled in 2021 only increased by one student, from 781 to 782.

“The enrolled [number] didn’t change,” Bunsis said. “My outside view is that [the admissions office] looked and said, ‘You know what? We jumped up by 500 because we made a mistake. But the [number of students] enrolled didn’t change! Let’s do it again!’ Then boom!”

That boom equated to an extra 130 students enrolled in the class of 2025. When Bunsis asked the audience where the University placed all of the extra students and whether new housing was provided, a chorus of “no’s,” “Bennet triples,” and “hotels” echoed in response. Bunsis was unsure that COVID-19 was entirely to blame for the staggering increase in enrollment numbers, but he did not elaborate on other sources.

Bunsis highlighted that the increase in undergraduate enrollment was accompanied by a decrease in graduate enrollment. The PhD program saw the biggest drop, with 25 fewer students enrolling in 2023 than in 2017.

Several attendees moved up in their chairs for the next topic, University tuition, which included a comprehensive analysis of annual percent changes and discount rates. Wesleyan’s sticker price currently stands at $86,050 per year, including University tuition, the residential comprehensive fee, and the student activity fee (but not including the $300 matriculation fee issued to first-year students). 

Tuition has increased by close to 4% year-on-year, with the largest percentage increase during the 2023–24 fiscal year. This year, tuition increased by 4.7%—a significant increase from the 3.7% increase in the 2022–2023 fiscal year. Room and board costs also increased from 4.2% to 7% during the fateful year of 130 extra freshmen, but dropped to a 3.7% increase in the following tuition cycle of 2022–2023.

Bunsis expanded on the topic of tuition by turning to discount rates, which he calculated by factoring in the $79.5 million issued for student scholarships in 2022 and dividing that figure by the $183.4 million in net student charges. This achieves the University’s relatively steady discount rate of about 38% annually. Bunsis added that the University may claim a higher reported discount rate, but that this is because it solely cites rates for first-year undergraduate students. The actual rate calculated by Bunsis includes all students and is found in audited financial statements. 

Bunsis also noted that the University gives more financial aid to fewer students compared to its peers. Wesleyan has a higher percentage of students paying sticker price and a higher percentage of students paying little to no tuition, with fewer students in-between these two extremes. The University’s sticker price is also higher than the tuition cost of its peers.

 

Hiring Practices

From tuition, Bunsis moved on to discuss hiring practices and salary, which he dubbed “the swimsuit issue” of the presentation. He described an inflation of figures in the audit, which arbitrarily allocates number and position holders into categories that project the image the University wants to emanate. For example, the University categorizes deans as instructive faculty rather than academic support.

Bunsis noted that the University has increased its hiring of non-tenure track (NTT) professors by 25% over six years, following a national trend. He emphasized that visiting faculty and other NTT professors lack job security, and he criticized the University’s categorization of these positions. Although the audit appears to show that “no rank” faculty decreased from 129 in 2022 to only 5 in 2023, these faculty members were, in fact, placed instead in the “associate,” “assistant,” and “instructor” categories. This method of categorization is not standard among universities.

“You don’t see this,” Bunsis said. “It just doesn’t happen.”

Additionally, the University’s recategorization of “no rank” faculty also makes it difficult to compare salaries at Wesleyan to those at peer institutions, obscuring the context behind University decisions. Bunsis concluded that Wesleyan’s apparent above-average instructor salary is, in fact, due to the reallocation of deans as instructive faculty. The University does not pay instructors significantly more than peer institutions, but rather actually lags in salaries in comparison with peer institutions. 

Bunsis concluded his presentation confirming that the University could afford to increase professorial salaries due to its solid financial standing and healthy reserves. He criticized the increase in NTT faculty hiring practices and advocated for policies in line with AAUP’s One Faculty! campaign. 

 

Responses

The co-presidents of Wesleyan’s chapter of the AAUP—Associate Professor of the Practice in Molecular Biology and Biochemistry Cori Anderson and Associate Professor of English Matthew Garrett—found the presentation to be an essential viewing for members of the University community.

“It is part of Wesleyan AAUP’s work to support a well-informed and active University community of faculty, students, and staff,” both wrote in an email to The Argus. “Faculty have a fundamental role as co-governors of the University along with the trustees. [Therefore, they] need to be fully educated about the real financial picture of the University.” 

However, University President Michael Roth ’78 criticized the AAUP’s decision to hire Bunsis to audit the University.

“Oh, I imagine it’ll be very much like all the other audits that [Bunsis] has done,” Roth said, “He seems to be very consistent. Whatever school he’s looking at, he finds similar things, so I imagine he’ll find the same thing…. He’s hired to tell people they can be paid more than they are currently paid…but he could surprise me.”

Anderson and Garrett argued that Bunsis’s presentation affirms declining faculty salaries. 

“Wesleyan has ample resources available to live up to its potential, especially in the treatment of the folks who actually do the work here,” Anderson and Garrett wrote. “The deterioration of faculty salaries in recent years cannot be justified in financial terms…. The president of the University has claimed that increases in salaries would need to come at the expense of student financial aid. Professor Bunsis showed that this claim is entirely false. Faculty and students are the heart of the University and will not be pitted against each other.”

 

Carolyn Neugarten can be reached at cneugarten@wesleyan.edu.

Amalie Little can be reached at alittle@wesleyan.edu.