UNM department chairs are grappling with a large deficit that threatens to reduce the amount of overhead return they receive on grant money for years to come.
The $4.4 million deficit was created under the direction of Terry Yates, former vice president for Research and Economic Development. Yates managed the office from 2002 until he died of brain cancer in December 2008.
Overhead returns flow from the state, city and federal governments into the Office of the Vice President for Research and Economic Development and are meant to pay for expenses not covered by grants University researchers procure. The OVPRED is now holding back some of the money that would otherwise go to the departments in order to balance the budget.
John Geissman, chairman of Earth and Planetary Sciences, said the funds are used for a variety of educational programs and that siphoning overhead returns to repay the debt is a bad idea. He said this endangers the University's science and engineering departments.
"Our department uses this money for salaries, pure and simple, because we can't pay critical staff enough on their normal salary lines," Geissman said. "We use it for a variety of different things. We use it for faculty start-up. We use it for emergency crisis in laboratories. We use it for educational purposes. And we depend on these monies. If they go away, we are in really dire straits."
In an e-mail to the Daily Lobo, Julia Fulghum, vice president for Research and Economic Development, said the $4.4 million debt was created by a $2.2 million over-budgeting deficit combined with $2.2 million that the OVPRED took from surplus overhead returns in several departments in 2007. Fulghum said the OVPRED will pay those departments back by 2011.
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She said the OVPRED created a deficit-reduction plan in April 2008. The plan calls for reduced allocations of overhead returns to many UNM programs.
"This reduction in expense was designed, first, to ensure that the OVPRED did not continue to increase its debt," Fulghum said.
Zachary Sharp, professor of Earth and Planetary
Sciences, said he and other department chairs attended a meeting last Friday with Fulghum to discuss the reductions.
"(Fulghum) wants to make sure that everyone understands what's going on and that she's not trying to take money from anyone - she's just trying to deal with the situation she has," he said.
Sharp said he was unhappy to learn that the overhead return rate to departments will now be 34 percent, a 10 percent reduction from past years.
"(Fulghum) was explaining that the overhead returns are obviously critical to the funding of the OVPRED, and she has trimmed her staff and tried to make sense of the overruns that have occurred
under her predecessor, but that it was very difficult to do because there was really not very good accounting that had been going on," Sharp said. "There were promises that had been made to UNM that just caused an overrun. There wasn't enough money for all the promises that had been made."
Michael Dougher, associate vice president for Research and Economic Development, said he worked with Yates at the OVPRED while UNM was one of the fastest-growing research institutions in the country.
"Terry was really a big-picture guy," Dougher said. "He really had a huge vision for UNM, and it's hard to know what would have happened had he not become sick. There was some financial problems in the office that were going on at the same time that Terry got sick, and Terry would have set out to try to solve those problems himself."
Geissman said the reduced overhead returns, along with the hiring pauses and political strife on campus, have made him and his peers deeply concerned for the future of UNM.
"The bottom line here is that the people who are concerned about this are equally if not far more concerned about the future of this institution and its ability to be a quality institution of higher education," Geissman said. "It's as simple as that. Personally, I think we're on the threshold of something that would spell doom for the state of New Mexico. I really do."
