University of Maryland’s Fiscal Woes Should Be a Wake-up Call to Governing Boards

The Chronicle of Higher Education reported on the financial difficulties of the athletics department at the University of Maryland at College Park, and proposals to improve the governance process of its athletics program. The article stated that William E. Kirwan, chancellor of the University System of Maryland, announced the athletics program had run a deficit for several years and had recently exhausted the cash reserves responsible for staving off far-deeper deficits. Currently, the institution has $83-million in debt service on a basketball arena and renovated football stadium.

Tom McMillen, a member of the Maryland Board of Regents, stated his concern about the information he had received in previous years. McMillen said: “Those reports didn’t show deficits, nor did they show transfers from reserves. So the board did not have a full look at what was going on.”

The financial concerns at Maryland are being echoed at institutions across the country, as athletic departments continue to find new ways to raise revenue to remain competitive in an era of increasing intercollegiate athletics spending.

McMillen recommended the athletic department be required to submit its budget to the board for approval, and undergo a financial audit each year. “All universities across the nation need to make sure that their governance systems are up to speed for the challenges ahead,” he said. “Every board of regents should be reviewing their procedures.”