Update 5:30 p.m. July 12: Details from Averett University’s fiscal year 2023 tax report have been added to this story.
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Many faculty and staff at Averett University in Danville are working four-day weeks this summer and taking a pay cut to cover a financial shortfall after the private university said it discovered unauthorized withdrawals from its endowment.
The problem has been traced to a former employee, Averett spokesperson Cassie Williams Jones confirmed by email this week.
“There was no evidence of embezzlement, theft and the use of funds for non-university purposes” that would warrant a criminal investigation, Jones said. She didn’t say where funds had been moved to or how they were ultimately spent.
It’s unclear how long the activity went on, or why the problem wasn’t detected soon enough to prevent pay cuts. The university is looking to cut $6 million in costs for the upcoming academic year in order to balance its finances, Jones said.
The furlough was first reported by the Danville Register & Bee, which noted reports of financial mismanagement by someone at the university. University President Tiffany Franks discovered the shortfall in late March, according to an interview with the paper.
About 125 of Averett’s more than 200 full-time employees are experiencing the temporary 20% pay cut. Some employees who are considered full-time are on nine- or 10-month contracts and so don’t work during the summer.
Affected 12-month employees are working four-day weeks from June 2 through Aug. 3.
The school’s executive leaders are “taking an equivalent or greater salary reduction,” Jones said.
Summer classes and other on-campus programming have continued, including youth camps and orientation for new students.
Along with the nine-week pay reduction for some employees, Averett’s cost-cutting plan includes a hiring freeze for “any positions that are not considered mission-critical” and reducing the employer match for the university’s retirement program, Jones said. She didn’t elaborate on the number of positions that would remain empty or the change in the retirement match rate.
“Our president, senior leadership and the board of trustees are laser-focused and resolute in reengineering a conservative, responsible budget that positions us well for the future,” Jones said.
The university considered “a variety of scenarios” to save money, Jones said, and tried to “avoid as much impact to our employees as possible.”
Averett’s fiscal year ending in June 2022 shows expenses of nearly $59 million, with about $17 million spent on salaries and employee benefits, according to its public tax records. The university ended the year with about $48 million in net assets.
For fiscal year 2023, Averett had expenses of just over $60 million, with about $18 million spent on salaries and benefits. As of June 2023, it had nearly $44.6 million in net assets.
Between fiscal 2022 and 2023, the university’s endowment decreased from about $26.6 million to $24.7 million.
University endowments typically include a mix of restricted and unrestricted funds, with the former reserved for specific purposes at the school. Endowments typically have annual withdrawal limits.
Averett’s enrollment has grown in recent years in an era when many small colleges are struggling to recruit students. In 2014, Averett had fewer than 850 undergraduates, according to data from the State Council for Higher Education in Virginia.
