Interim Chief Financial Officer Reem Hanna-Harwell said in a March campuswide email that UCLA’s budget deficit was projected to be $220 million for the 2025-26 fiscal year.
In September, Chancellor Julio Frenk sent out another campuswide budget update. That email said UCLA’s budget deficit was $58 million – $162 million lower than expected.
But the university has published few details about the specific measures it took to shrink its deficit. UCLA Media Relations has not responded to the Daily Bruin’s specific questions about how the university arrived at the new figure.
“UCLA’s year-end central account deficit was driven by a series of one-time measures and revenue inflows, in addition to broader efforts to reduce administrative expenditures,” a UCLA spokesperson said in an emailed statement. “Addressing the structural imbalance, which remains, continues to be a priority for the university, and the Chancellor’s Office continues to implement several steps that will help tackle this.”
[Related: Frenk says UCLA’s year-end budget deficit is significantly smaller than expected]
Frenk’s September estimate only applies to UCLA’s central account – including state funding, tuition and administrative costs – instead of the combined deficit across campus departments, Frenk said in a September email.
Frenk cited UCLA Athletics – with an estimated deficit of over $200 million, according to The Athletic – as one of several campus units that continue to operate with expenditures that exceed revenues.
“It’s not sustainable to just run deficit after deficit after deficit at the level of the campus, or the level of the whole UC,” said Daniel J.B. Mitchell, a professor emeritus at the Anderson School of Management and Luskin School of Public Affairs. “There’s always going to be an eventual reckoning where you get into trouble if you can’t pay all your bills.”
Before Hanna-Harwell announced her estimate of $220 million, Stephen Agostini, UCLA’s former chief financial officer, alleged in a February interview with the Daily Bruin that administrators’ financial mismanagement led to a $425 million deficit for the 2025-26 fiscal year. Hanna-Harwell said in the March email that Agostini’s projection contained spending requests that had not been approved by UCLA, misrepresenting the university’s central account deficit.
[Related: Financial mismanagement contributed to $425 million annual deficit, UCLA CFO says]
Agostini also alleged that the annual financial reports the university has posted on its website since 2002 were erroneous. At the time of the interview, the university had only posted reports up to the 2022-23 fiscal year.
“The most recent information is way out of date,” Mitchell said. “It’s for the year that ended more than a year ago, and that’s just not reasonable. There’s no reason why that can’t be produced.”
Agostini was out as UCLA’s CFO four days after The Bruin published his allegations.
“I spent a long time in the federal government. … I have rarely seen the kind of financial management flaws and failures that I see here when I got here,” Agostini said in the interview. “There are days I’m still amazed how things got this way. I have to fix that.”
[Related: UCLA CFO out days after alleging history of financial mismanagement]
The UC Regents have begun to create a preliminary budget proposal for next year, Mitchell said. He added that UCLA would have had to contribute future revenue and deficit estimates to inform the proposal and that the university should publicize that financial data.
UCLA Athletics – which is meant to be a self-sustaining campus unit – has received increasing subsidies from central administration for more than five years, said Tim Groeling, chair of the UCLA Academic Senate, in an emailed statement. Groeling is a former member of the ASUCLA Communications Board, the Daily Bruin’s publisher.
[Related: UCLA to combine administrative roles, use settlement funds for Athletics deficit]
“Most of the factors that contributed to this year’s deficit can be expected to continue into the future unless significant changes are made,” Groeling said in the statement. “Ultimately, the amount of any future campus deficits will be determined by how the Administration approves unit budgets and allocates funding.”
Multiple university programs have faced budget cuts in the past two years. UCLA has cut funding from academic departments and counseling programs and recently announced it would close its childcare centers.
UCLA administrators are responsible for ensuring budget discipline, Groeling said. He added that the university should first consider reductions outside academic units before making further cuts to programs that impact teaching.
The senate will continue advocating to protect UCLA’s academic mission as administrators address the deficit, Groeling said.
“CPB (Council on Planning and Budget) and the Academic Senate as a whole continue to strongly advise that UCLA should not make any freezes or cuts to academic units without first looking outside of academic units to close the budget gap,” he said. “Cuts to academic units in an era of increasing enrollments only increase class sizes, and may impact support services critical to student success.”
Comments are closed.