Financial Exigency

Scope

This policy concerns the university process for determining of whether a university or campus financial exigency exists that may result in the termination of the appointments of faculty with tenure or academic appointees holding long-term appointments.

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Policy Statement

1. In order to invoke financial exigency as a reason to terminate academic appointments with tenure or prior to the expiration of a long-term academic appointment, either Indiana University or one or more of its campuses must be facing a severe and imminent crisis, the financial impact of which threatens the survival of the university and/or a campus in its present form, that jeopardizes the academic integrity of the university or one or more of its campuses, and that may not be resolved by means less drastic than the elimination of such academic appointments and the imposition of the other measures (“university financial exigency”).
2. In the absence of the criteria outlined above in Section A, a voluntary decision by the university to shift resources away from teaching or research, or away from a campus or unit, does not constitute a university or campus financial exigency and does not justify the termination of tenured or long-term appointments.
3. A crisis within one unit does not constitute a university or campus financial exigency unless its immediate ramifications threaten the survival and academic integrity of the university as a whole or one or more campuses.
4. The merger, elimination, or re-organization of an academic unit by itself does not constitute a university or campus financial exigency.
5. The university’s determination that a university or campus financial exigency exists must be arrived at transparently, with consultation provided by affected constituencies, and financial documentation provided by relevant universit offices.
6. The ultimate decision to declare a condition of financial exigency at Indiana University or one or more of its campuses and determination of how to resolve it lies with the Board of Trustees and the President. However, because a university or campus financial exigency will directly affect teaching and research missions and may result in the termination of tenured and long-term academic appointments, faculty may provide input and feedback in this process.
7. This policy addresses a university-wide or individual campus financial exigency which may result in the termination of tenured and long-term academic appointments. Each unit may have its own policies that address financial and other crises therein to the extent they do not conflict with this or other university-level policies.
8. A university or individual campus financial exigency is an immediate crisis driven by internal or external events. As such, the university will endeavor to limit the declaration of financial exigency should be limited to a maximum of one year from the time the President first informs the University Faculty Council ("UFC") of the crisis. However, internal or external conditions, as well as immediate operational and other needs of the university, may require a different timeline.
9. This policy is separate and distinct from BOT-25, Merger, Reorganization, and Elimination of Academic Units and Programs.
10. Pursuant to IC 21-38-11, faculty governance organization actions are advisory only.
11. To the extent any provisions of this policy conflict with Indiana law, applicable statutory requirements shall supersede the provisions of this policy.
12. To the extent any provisions of any campus-specific policy conflict with this policy, such local-level policy shall be superseded by this policy.
13. Where this policy and/or Indiana law imposes certain obligations on university administration, university administrators will endeavor to honor the collaborative and consultative processes set forth herein. However, regulatory constraints may impair and limit the ability of university administrators to adhere to the processes of this policy.

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Reason for Policy

Several university academic policies authorize the termination of tenured or long-term academic appointments in case of financial exigency. Those policies do not define “financial exigency,” do not reference the faculty’s consultative role in the declaration of a financial exigency, or establish a procedure for stakeholder input and feedback. This policy fills that gap.

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Procedures

1. When the President becomes aware that the university or a specific campus faces a financial crisis so severe that it may require the termination of tenured and long-term academic appointments, the President shall inform the UFC, the faculty governance organizations of each campus likely to be affected, and the faculty in general.
2. In order that the faculty may evaluate the situation for themselves, the President shall provide the UFC Executive Committee with budgetary, financial, and other documentation being used to guide the decision whether a university or campus financial exigency exists. The President will endeavor to provide such information as soon as possible prior to any decisions being made that may result in the termination of tenured and long-term academic appointments. The President will inform the UFC Executive Committee of the university’s decision-making process, the anticipated timetable for any decisions involving the elimination of campuses or tenured or long-term academic appointments, and supply additional relevant information.
3. The UFC Executive Committee may form an ad-hoc Financial Exigency Committee to represent faculty interests during the financial crisis.
   1. The Committee may include members of the Executive Committee.
   2. The Committee may include other faculty as needed so that the final committee includes:
      1. At least one member of the University Budgetary Affairs Committee;
      2. Faculty competent to evaluate any units threatened with elimination;
      3. Both tenure-track and non-tenure-track appointees; and
      4. One member of the Creation Reorganization, Elimination and Merger (CREM) Committee or its equivalent from each affected campus.
   3. Additional faculty may be added to the Financial Exigency Committee as the financial situation and the university’s response to it develops.
   4. Members of the Financial Exigency Committee who are not currently on the Executive Committee should be selected from lists proposed by the faculty governance organizations of the affected campuses and units.
4. The Financial Exigency Committee may provide analysis of the academic impact of the financial exigency. It may assess the contribution to the overall mission of Indiana University of any campuses threatened with elimination or a reduction of tenured and long-term academic appointments, as well as these units’ places in the larger landscape of intellectual and professional endeavors. The Committee may explore alternative cost-saving measures that may partially or fully alleviate the situation. The Committee may report these findings to the President and the Board of Trustees for consideration as part of the decision-making process.
5. In the event that the nature of the financial exigency leads to the possibility that an entire campus will be closed, and notwithstanding the fact that tenure is campus-specific, the university will strive to place the affected tenured faculty at other campuses within the university, with the understanding that such placements may not be possible given the university's operational needs. To support these efforts, the Financial Exigency Committee should consult with units in a position to potentially accept transfer faculty and provide input to the President and Trustees about the feasibility of such transfers.

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History

This policy was adopted by the UFC Executive Committee on May 14, 2020.

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