KU business school’s use of fees questioned

The Kansas University School of Business has collected more than $31 million over the last six years in differential tuition funds, and on an annual basis, this revenue source accounts for 40 percent of the school’s operating budget. Over the last five months, students have begun asking questions as to how these funds have been spent and, in a search for answers, have met with administrators at every level of the university. Multiple requests for budgets and an accounting of differential tuition have been submitted and while documents have been exchanged there are still far more questions then answers.

The lack of information provided in regards to differential tuition by Dean William Fuerst and the administration of the university compelled students to file a Kansas Open Records Request. The university responded by stating that it would cost $61,000 to provide answers as to where the differential tuition dollars students had voluntarily decided to pay were going.

The Differential Tuition Agreement provides explicit detail on how all differential tuition dollars should be spent and how these expenditures should be supervised, stating that all expenses should “directly” benefit students. Differential tuition was originally supported by the student body because the administration promised to give students oversight of how the funds were spent and to provide detailed financial reports of differential tuition expenditures to all students twice a year. Differential tuition was passed to improve the stature of the school, and the quality of students that attend. For example, one of the agreement’s goals was for the school to be a top 25 business school. While the school was ranked 28th in U.S. News and World Report in 2009, this year the school has fallen off the list entirely.

Regardless of how the administration spins it, several facts remain:

  1. The current administration has lost vital international programs such as CIBER, GRIP, and CIMBA due to inaction. KU is the first and only incumbent institution in the nation to not be renewed for the CIBER program.
  2. The differential tuition advisory committee was disbanded in 2006 and the required semi-annual financial statements and electronic reports to students discussing these financial statements have not been completed since the inception of differential tuition.
  3. Differential tuition was to be indexed to the Higher Education Price Index (HEPI), which over the last decade has ranged from 2-3 percent annually. However, differential tuition has increased at a flat 6 percent annual rate, and no one can provide documents explaining why this shift occurred.
  4. The differential tuition agreement provided that 7.5 percent or $225,000 of the original $3 million budget be dedicated to scholarships. However, the most recent fiscal year shows only $286,000 dedicated to financial aid out of a total budget of $7.1 million. According to the agreement, the fund should now be at $532,000.
  5. Based upon information pulled from university operating budget records, individuals previously paid by state funds have been switched over to differential tuition funds. Thirty-seven of the 65 individuals employed by differential tuition since its inception have been non-faculty employees and, in the FY 2010, over $1.8 million of differential tuition funds were budgeted for miscellaneous expenses within the administrative division of the school. The agreement explicitly states that DT funds were not to be used to pay current faculty.
  6. In 2010, Dean Fuerst and Associate Dean Keith Chauvin are budgeted to be paid salaries of $308,000 and $214,000, respectively. According to the AACSB salary survey, these salaries rank among the highest paid for their positions in the nation. In 2009, the mean salaries for a dean and associate dean on a national basis was $208,000 and $156,000, respectively. Salary levels at the 75th percentile for dean and associate deans were $244,700 and $175,600, respectively. School of Business professors are paid salaries at the published median point.

Success for us will be a complete restoration of transparency and integrity to the School of Business that has been sorely lacking for several years. We also want to be assured that those who follow in our footsteps will have a quality program to attend. There are many great professors within the School of Business who have worked hard for years to build a program with a solid reputation. Although unsolicited, some of those same professors have come out openly in support of our efforts. We hope that other faculty members find the will to do the same. The current administration’s efforts amount to nothing more than laying waste to years of concerted hard work by dedicated professionals.

We believe that differential tuition funds are not being used to the best of their ability, especially when one can observe the lack of forward progress at the school. The sole purpose of differential tuition was to improve the stature of the school and the experience of students that attend it. Since the collection of these funds began, the school’s national ranking has declined significantly and its admission standards now languish near the bottom of the Big 12. We believe that a comprehensive external audit of the School of Business is warranted given the lack of oversight that has occurred in recent years.

Of all of the programs at KU, the School of Business should be a model of accountability and financial stewardship. This has not occurred under Dean Fuerst’s tenure, as such, we have no confidence in his leadership abilities.

• This column was written by Bradley, Cantrell, Carlson and Metz on behalf of 25 KU School of business graduate students. Other students signing the column were Jeff Sweeten, Adam Grant, Edison Sheng, Lisa Waters, Kate Favrow, Jackie Carroll, Ivana Catic, Robert Scalise , Justin Winner, Katie Brosious, Tim Burke, Chris Prokopiak, Olivia Li, Scott Self, Elliott Waxman, Zach Rubin, Paul Nagy, Reid Hollander, Sarah Shubert, James Lee and Michael Kauk.