The audit produced four key results:
First, the School owes the University almost $40 million. The debt roughly equals the School’s annual budget. So far, the School has laid off staff, raised tuition and asked for additional state funding. These steps have not been enough to repay the debt. In addition, the School must continue repaying a loan from the University, which it used to establish the Center for Pediatric Dentistry (now part of the Magnuson Park Clinic). We found many underlying causes, some of which may prove difficult to remedy. The issues around the deficit are discussed on later tabs.
Second, the School could make better use of its available performance data to improve its financial health. The School has not effectively tracked information it needs to identify and fix billing issues. As a result, over seven years, it lost about $3.5 million in revenue from correctable problems. School officials recently adopted new performance measures to help manage finances, but they lack some measures other dental schools already use.
Third, while the University has improved its oversight of schools’ budgets, it could do more to reduce the risk of future deficits. It gives its many schools and departments great autonomy in their financial decision-making. However, the financial management software it uses is out of date, making it harder to track fiscal health. Furthermore, the University offers little training to help academic experts responsible for managing the schools’ funds prepare for the task.
Fourth, School and University officials must work out a long-term strategy to reconcile the School’s competing financial, educational and service objectives. The School lacks a strategy to help it balance its financial responsibilities with its educational and service objectives. The School must decide how much ‘safety-net’ care it can actually provide, and ensure all providers stick to the plan.