Appendix O Financial Exigency Policies and Procedures
The policy and procedures on financial exigency was approved by The University of Tennessee Board of Trustees on July 19, 1980.
Financial exigency is the formal recognition by the Board of Trustees of The University of Tennessee that the budget for the University of Tennessee, Memphis (UT Memphis) can only be balanced by extraordinary means, including the termination of existing and continuing academic and non-academic appointments.
Determination of Financial Exigency
Early indications that adverse financial conditions may face UT Memphis should be reported to the UT Memphis community as soon as possible.
Financial exigency is a circumstance, the existence of which is declared only after careful consideration and wide consultation. When a situation of financial exigency is thought to exist or to be imminent, the Chancellor of UT Memphis presents at a meeting of the Faculty Senate documentation for the necessity of a declaration of financial exigency. After discussion with the Faculty Senate and with whomever else the Chancellor deems it necessary and desirable to consult, if the Chancellor remains convinced that a financial exigency is imminent, he or she shall present the documentation to a meeting of the full faculty for review and discussion. If a formal declaration is determined to be necessary, all pertinent documentation will be submitted by the Chancellor to the President of The University for review by the appropriate University officials. The President, following confirmation of the need for a formal declaration of financial exigency, will recommend to the Board of Trustees that a state of financial exigency officially be declared for UT Memphis.
Procedures Following the Declaration of Financial Exigency
After the Board of Trustees has officially declared a state of financial exigency, the UT Memphis Administration shall take appropriate action with the active participation of the Financial Exigency Committee.
Financial exigency procedures shall be recommended by a Financial Exigency Committee of 17 voting members: 10 faculty members with the rank of associate or full professor, elected by the faculty (five from the College of Medicine, two from the College of Dentistry, and one each from the College of Pharmacy, College of Nursing, and College of Allied Health); one faculty member elected by the faculty of the Health Sciences Library and Education Center and other interdisciplinary programs; the President of the Faculty Senate; the President of the Student Government Association; one representative from the Campus Employee Relations Council; the UT Memphis Chief Academic Officer; Vice Chancellor for Business and Finance, and the Vice Chancellor for Administration. The academic Deans shall serve as ex officio nonvoting members. The committee will elect its own chair who retains voting privileges.
The committee shall be convened initially by the Chancellor and shall report its recommendations to the Chancellor.
The committee shall develop and recommend a general plan of reduction. Specific plans of reduction for each unit of UT Memphis shall then be developed through the normal budget-making channels consistent with the general plan.
Guidelines for the Financial Exigency Committee
Paramount importance shall be given to preserving the institution's capability to meet its goals. The Financial Exigency Committee should include, but not be limited to, the following guidelines in its deliberations.
- All units of UT Memphis, academic and non-academic, shall be considered.
- The committee or one of its subcommittees shall consult with heads of budgetary units before issuing recommendations concerning those units.
- Reduction need not be uniform throughout the campus. Some services or programs may be eliminated completely. However, some reductions may be applied on a campus-wide basis.
- Non-academic reductions will be favored over academic ones whenever possible.
- Reduction in operating budgets will be favored over reductions in personnel budgets.
- If recommendations for personnel reductions are deemed necessary, the committee will establish guideline standards including considerations of the following:
- Workload (appropriate to the discipline) per faculty member;
- Ratios between faculty and administrative personnel; and
- Ratios between nonexempt and exempt staff.
Guidelines for Developing Specific Plans of Reduction in the Event of Financial Exigency
Each unit of UT Memphis has the responsibility to develop a specific plan to allow that unit to comply with the overall plan of reduction for the campus and to recommend specific budget cuts for itself through the normal budget-making channels. Large units should develop a committee for this purpose. The unit head will make recommendations after discussions with the members of the unit.
In developing specific plans in non-academic units, heads of units will consult with members of the unit and will be responsible for making recommendations to the Financial Exigency Committee.
Each academic unit (e.g., departments) will consider its reduction plan by meeting as a committee of the whole, chaired by the Chair, to make recommendations to its Dean, who in turn will make recommendations to the Financial Exigency Committee. The academic unit Chair will note when there are substantial differences of agreement about his or her recommendations.
Specific plans will follow the guidelines recommended by the Financial Exigency Committee and approved by the Chancellor.
Specific plans for reduction may include, but are not limited to, such alternatives to personnel terminations as:
- Cutbacks in operating budgets, e.g., supplies and equipment;
- Voluntary early retirements;
- Voluntary transfers to other units (with approval of the receiving units);
- Voluntary temporary leaves without salary;
- Voluntary reductions in salary;
- Projects to attract additional students;
- Outside funding;
- Modification of teaching loads;
- Voluntary teaching overloads without additional salary;
- Elimination of released time; and
- Voluntary changes in appointment types and work schedules by exempt and nonexempt staff.
Specific unit plans should include a determination of the minimum staff and budget necessary for the continued operation of those programs which are deemed viable. The plan should include a determination of the minimum number of staff reductions necessary to meet the general reduction plan. The plan shall set forth by category the savings to be achieved by the plan.
Guidelines for Recommendations for Terminations of Personnel
The Financial Exigency Committee will review specific plans submitted, reconcile differences, and reach a conclusion about the number of terminations, if any, necessary in each unit and will report its recommendations to the Chancellor.
Selections of specific persons to be terminated shall in general follow the considerations below. Highest priority shall be given to retaining persons necessary to maintain essential programs, both academic and non-academic. Attention will be given to the possibility of temporarily merging or eliminating certain administrative positions. When the issue of maintaining an essential program is not at stake, then the following guidelines are proposed.
- Full-time employees will be retained in preference to part-time ones.
- Individuals with regular appointments will be retained in preference to term, multiple-year contract, or probationary ones.
- Tenured faculty members will be retained in preference to non-tenured ones.
- Among tenured faculty members, those of higher rank will be retained in preference to those of lower rank. Within rank, seniority will be considered.
- In determining retention of non-tenured faculty members, appropriate weight shall be given to seniority and to performance.
- Among exempt and nonexempt staff, the same seniority and performance rules shall apply as in 5, above.
Faculty or staff members for whom termination has been recommended by the plan of the unit shall have an opportunity to appeal to their unit (or its committee). A written summary will be kept of all such proceedings.
Variations from the above guidelines regarding tenure, rank, or seniority are allowed if the head of the unit involved and the Financial Exigency Committee agree that the termination of a particular person or the loss of that person's specific expertise would
- Adversely affect the continuance of that unit's effectiveness;
- Undermine the institution's capability to meet its goals; or
- Unduly affect the institution's Affirmative Action Plan.
Written notification of termination will be sent by the Chancellor. In all cases of termination of appointment because of financial exigency, every effort shall be made to give notice not less than that prescribed by standard personnel procedures and procedures presented in the Faculty Handbook. Any person receiving a termination notice may request and receive from the Chancellor a written statement outlining the reasons for termination and the basis of his or her selection for termination.
No member of the Financial Exigency Committee or other group which recommends specific terminations shall subsequently serve on a hearing committee dealing with the appeal of a faculty or staff member receiving a notice of termination.
A Faculty Hearing Committee shall consist of the President-Elect of the Faculty Senate, the appropriate Associate Dean for Academic Affairs, and five faculty members elected by the Faculty Senate. The President-Elect of the Faculty Senate shall be the chair of this committee.
A Staff Hearing Committee shall consist of the UT Memphis Chief Academic Officer, the appropriate department or unit head, and five staff members elected to the committee by the Employee Relations Committee or the Exempt Employee Council wherever appropriate. The UT Memphis Chief Academic Officer shall be the chair of this committee.
Any faculty or staff member receiving a notice of termination has the right to appeal the termination. The Hearing Committee shall insure a prompt and expeditious hearing that is fair and unbiased, although procedural requirements of formal adjudication shall not be required. The Hearing Committee shall evaluate whether established procedures were followed and appropriate criteria applied in arriving at the decision to terminate. The Hearing Committee shall not review the decision concerning the declaration of financial exigency or the decisions allocating necessary funding reductions. A recommendation will be sent from the Hearing Committee to the Chancellor to uphold or reverse the action of termination, and the Chancellor shall announce a final decision. Further appeal can be made to the Board of Trustees.
Continuing Rights of Persons Terminated
No academic vacancy caused by a termination due to financial exigency shall be filled for a period of three years from the time of the notice of termination without first offering the position to the person terminated. Recall of non-academic employees is to be governed by the university policy on "Restoration of Force" as set forth in The University of Tennessee Personnel Policies and in effect at the time of issuance of the formal declaration of financial exigency. UT Memphis shall make every reasonable effort to assist persons in finding other employment.