- The report is not an entirely impartial review, as it was prepared by the national president of the AAUP.
- Several elements of the review are flawed, such as combining operating/payroll cash and endowment investments to develop conclusions on investment performance. Comparing returns on operating cash, which is appropriately invested to avoid risk, to stock market returns is inappropriate.
- The report looked at a composite financial score used only by the State of Ohio despite the availability of widely accepted approaches such as “Strategic Financial Analysis for Higher Education: Identifying, Measuring & Reporting Financial Risks.” Forbes magazine recently stated that publication is “widely considered to be one of the most important financial publications in higher education.”
- The Fichtenbaum report compares Rider, a private university, to Ohio’s fourteen public universities and twenty-three community colleges only, which is not a relevant peer group.
- In addition to Moody’s analysis, Rider benchmarks its financial health on an ongoing basis using best practice methodology and nationally recognized comparative sources. The benchmarking clearly shows the need to act now to strengthen Rider’s finances.
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- The union's interpretation of Rider’s financials has always been performed by union members or paid union consultants, just as the administration evaluates those same financials using administration members or paid consultants. This is not in and of itself an indication of bias. The “Strategic Financial Analysis for Higher Education: Identifying, Measuring & Reporting Financial Risks” (designed by the accounting firm KPMG) uses almost the same ratios to construct its index as the Fichtenbaum-Bunsis Index. The difference is in how this data is interpreted. When an institution achieves scores at the mid-point on its scale KPMG claims there is a need to “re-engineer” the institution, whatever that is supposed to mean. If an institution scores above the mid-point KPMG claims that the University should redirect institutional resources to allow for institutional transformation. All of this is highly subjective “administration speak” to justify administrators directing resources as they choose no matter the value of the score. The Ohio index (developed by Moody’s) is not in anyway unique to Ohio public universities and colleges, there is nothing unique about the financial performance of private universities and colleges although the terminology used in their financial statements differs somewhat from that used in the financial statements at public institutions (FASB v GASB). To suggest that because in Ohio they use the viability ratio to measure solvency the viability ratio at Rider cannot possibly measure solvency is simply absurd.
- VP Karns’ attack on the Fichtenbaum report’s methodology is a classic red herring. All of the reports use the same data and composite scores. Whether using Moody’s ratios, the Ohio State method, or the scores developed independently by by Professors Fichtenbaum and Bunsis, all three methodologies arrive at composite scores that for all practical purposes are identical.
- These scores (4 out of a possible 5) are also consistent with the latest report from the U.S. Department of Education's "financial-responsibility test" for Private Universities, which gave Rider a score of 2.4 on a scale that ranges from -1 to +3. The real issue is not the numbers but the interpretation of those numbers. We believe (along with Professor Fichtenbaum and the US Department of Education) that these scores indicate that Rider is still in good financial shape, despite some weakening of its financial position.
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