As Cleveland State University eyes a budget deficit, officials are turning to accounting and consulting firm Ernst & Young, or EY, for guidance.
University administrators entered into a $900,000 contract last month, according to information Signal Cleveland obtained via a public records request.
EY’s consultants will look at short-term steps to improve the budget as well as opportunities that could pan out for Cleveland State in the future, per the contract.
In September, the university’s board of trustees approved tapping into the university’s reserves for up to $11.5 million to balance its 2024 operating budget.
How Cleveland State got here
University President Laura Bloomberg addressed some of the challenges the university is facing at her most recent “State of the University” speech in October 2023. One of the biggest is declining enrollment, which dropped about 13% over the past five years. Fewer students on campus equates to less revenue from tuition and fees.
Cleveland State previously projected a $34 million deficit for the 2024 fiscal year. Last summer, officials created a task force where faculty and staff were charged with “developing recommendations for how the university can increase revenue and reduce expenses in today’s changing landscape for higher education.”
That group’s work helped to bring the deficit projection down to its current $11.5 million, according to a recent faculty senate meeting.
Universities often turn to consultants for help with strategizing. The University of Florida, for example, signed a nearly $5 million contract last summer to work with McKinsey & Company.
Cleveland State’s Bloomberg described EY as a firm “knowing the values that are important to universities, but also as being soberly analytic.”
At a faculty senate meeting Weds., Jan. 31, Bloomberg said the money to pay EY’s consulting fees came from external funding, not from the university’s operating budget. Signal Cleveland asked Cleveland State on Jan. 31 for a breakdown of where that funding is coming from.
Short-term priorities for Cleveland State
EY’s work with Cleveland State is already underway. It is slated to take about 12 weeks in total and is projected to end in March.
The contract lists the firm’s priorities to address issues related to the deficit and ”ongoing” budget challenges as the following:
- Identify and prioritize actions to “increase operational efficiencies and redundancies across administrative units, colleges, and university functions“
- Speed up an already ongoing prioritization process of academic programs
- Clarify and articulate “Board of Trustee and select campus stakeholder needs for CSU budget clarity, transparency, and communication”
Another section of the document outlines key activities EY may fulfill for Cleveland State. That list includes completing management interviews to learn more about the root causes of the deficit and crafting a list of 30 to 40 opportunities to address it. The firm will also prioritize and indicate the top five to ten of those ideas.
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Long-term actions
EY is digging into potential long-term moves, too. The firm plans to give recommendations related to these three areas, according to the contract:
- The university’s market differentiation and value proposition, or figuring out what makes Cleveland State stand apart from its competitors
- Identifying both high-risk and low-risk opportunities where the university could grow
- Potential mergers and/or acquisitions
As Signal Cleveland reported last week, leaders at Cleveland State talked three times with Notre Dame College last fall to discuss the university potentially “absorbing” the struggling private college.
No decision has yet been made, but officials at Notre Dame told Signal Cleveland they expect some updates about the college’s future to be shared with their faculty and staff in mid-February.
This story was updated at 3:50 p.m. Jan. 31 to reflect Bloomberg’s comments at a faculty senate meeting.
Read the contract in full below.
