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Policy Manual – Financial Emergency

FINANCIAL AFFAIRS
Section 707 Financial Emergency

Effective: 8/12/76
Last Revised:1/25/99
Responsible Office:  Finance

Policy Statement

In times of fiscal distress there may be conditions which necessitate alertness to serious financial difficulties which might threaten either the survival of the University System or one or more of its Universities or units. Such unfavorable economic conditions will require the University System to reevaluate its priorities and to reallocate its financial resources.

The Board of Trustees may declare that a financial emergency exists, or is imminent, when it has officially identified a situation wherein substantial reductions of University operations are mandatory, either system-wide or at any individual University or unit because of the unavailability of funding. Such situations include, but are not limited to, seriously declining enrollments, or lack of sufficient state, federal or other funding which leads to program reductions or terminations, the closing of departments, colleges, or Universities; in short, any action which results in severe reductions of staff.

The University of Maine System is an Affirmative Action/Equal Opportunity Employer, and the welfare of each of its employees is of preeminent concern. Upon the declaration of a financial emergency, therefore, it is incumbent upon the University System that it invoke those termination procedures which will assure equity for each employee.

In developing an implementation plan for the termination of faculty, professional and administrative staff, supervisors and classified employees, the terms of the collective bargaining agreements or employee handbooks will be observed where applicable and to the extent possible.

Procedures:

Procedures to be followed at the University level:

When a University seeks a declaration from the Board of Trustees that a condition of financial emergency exists or is imminent, the following procedure will apply:

The President will submit to the Chancellor a request that the Board of Trustees officially declare that a financial emergency exists or is imminent. Supporting data to accompany the request shall include: (a) a summary of corrective actions which have been taken prior to the recommendation; (b) a description of the situation which makes the recommendation necessary, and (c) evidence of the active involvement of faculty, students and other appropriate University personnel in its recommendation.

Procedures to be followed at the Chancellor’s level:

The Chancellor shall evaluate the President’s request with consideration given to the following: (a) review of the procedures used by the University in identifying the situation; (b) justification for the declaration that a condition of financial emergency exists at that University; (c) impact of the situation on the mission of the University System.

The Chancellor shall transmit the request to the Board along with the evaluation, supporting data, and a recommendation for disposition of the request. If approval of the request was recommended by the Chancellor, the transmittal shall also include a procedure for developing a plan for meeting the financial emergency. The Board of Trustees shall determine when the period of Financial Emergency has terminated.

ACTION TO FOLLOW DECLARATION OF A CONDITION OF FINANCIAL EMERGENCY

Following the Board of Trustee’s official declaration that a condition of financial emergency exists, the President and the Chancellor shall initiate the formal process for action.

The President shall provide the Chancellor with continuous information and shall conduct a continuous evaluation of all actions implemented throughout the period of financial emergency.

The Chancellor shall transmit all appropriate information to the Board of Trustees for review during the period of financial emergency.