The New Jersey State Comptroller’s Office will investigate New Jersey City University following reports of the school’s financial troubles that have been declared by school officials to be an “emergency” since June.
Acting State Comptroller Kevin Walsh said in an email statement to the Hudson Reporter that the Comptroller’s office, an independent state agency, had received a letter from Gov. Phil Murphy requesting a probe.
“We’ll look into what has happened at NJCU and follow the facts where they lead us,” he said.
The university, which enrolled about 5,200 undergraduates in 2021, has become embattled since declaring an emergency at the end of June, when university President Sue Henderson resigned from her post.
Top school officials had sought to blame a “historical underinvestment” in the university, as well as national declining enrollment, as the reasons for their troubles. Since then, the school has taken a number of measures, including reportedly laying off non-union staff, as well as suspending employees’ school-issued credit cards.
Murphy, citing recent news reports about the university’s issues, asked the Comptroller’s office on August 5 to conduct a full investigation, saying “the public interest would be served” by one.
The aforementioned reports were by the Jersey Journal and revealed how the university went from a $108 million surplus to it’s current situation, including Henderson leading a number of expansion plans such as a new dormitories, a $400 million campus village called University Place, and other school satellite locations.
Interim University President Jason Kroll told the Journal that the real estate ventures had “produced mixed results”, while Chris Young, a Rutgers University professor who conducted a financial analysis, said that it did not “materialize short-term or intermediate financial success.”
The report continued that in 2015, the surplus had disappeared due to $114 million in pension liability and $34 million in bonds issued to fund their expansion projects. Other factors involved in the school’s financial troubles include annual declines in enrollment and an increase in scholarships.
The Journal also reported that Henderson would receive nearly $650,000 in severance and sabbatical pay after resigning. The terms of her contract said that she would receive $360,000 in year’s worth of salary, as well as $280,000 as part of 80 percent of her salary for a sabbatical year.
They continued that her $5,000-a-month housing allowance would be paid through the end of the contract, that she would get to keep the car the school leased for her, and that she will receive deferred compensation that could earn her between $250,000 and $270,000.
The university’s faculty senate had cast a no-confidence vote against Henderson last year, accusing her of sending the school into financial debt.
NJCU Board of Trustees Chair Joe Scott said in a statement that the university is aware of the governor’s request and that they welcome “any additional review of the university’s financial situation as we work collaboratively with our partners in government, labor and our student, faculty and staff community to move our institution onto solid ground and set it on a path to future sustainability.”
Jersey City spokeswoman Kimberly Wallace-Scalcione also said that “it is our hope that this audit will help NJCU get back on track to ensure the university’s survival and financial stability for generations to come.”