- Associated Press - Thursday, December 1, 2016

SPOKANE, Wash. (AP) - Washington State University operated at a $17 million deficit last year, and President Kirk Schulz said departments that overspent must develop plans to repay the money so the university can balance its budget.

Schulz made the disclosure this week in an email to the WSU community, saying several academic units overspent their budgets by $1 million to $3 million.

Much of the spending was invested in research, new faculty hires, and the creation of academic infrastructure.

In some cases, deficits were created when the school hired new faculty and staff members knowing that the retirement of other faculty and staff was imminent, he said.

“None of these funds were spent frivolously or recklessly,” said Schulz, who was hired earlier this year to replace Elson Floyd, who died in 2015.

But “no deficits will be forgiven,” Schulz said.

The $17 million deficit is in addition to an athletics deficit of about $13 million last year, Schulz said.

Washington State’s main campus is in Pullman and the school has branches in Spokane, Vancouver, the Tri-Cities and Everett.

Washington State University is looking at ways to increase its revenue to reach its goal as a top 25 public research university, Schulz said.

That includes modifying the tuition waiver programs, enrollment growth, and other measures, he said.

“As our plans become clearer, I will keep you informed in future campus letters,” Schulz said.

The problems were identified in the university’s first comprehensive budget reviews in nearly a decade, Schulz said.

He said Washington State must rebuild and maintain adequate cash and reserve funds totaling 60 percent of annual operating expenses.

“Going forward, we can no longer use our reserves to support deficit spending by campus units,” Schulz said.

The school must also invest in system-wide infrastructure improvements, especially in information technology and financial software, he said.

“Funding these initiatives will be a priority,” he said.

Current financial systems have not helped campus leaders manage complex budgets, he said.

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