After Hobbs' scathing rebuke, Arizona regents respond to demands for UA oversight changes
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The Arizona Board of Regents has promised a swift response to Gov. Katie Hobbs' demand for sweeping changes in the oversight of the University of Arizona’s financial crisis.
In a scathing letter sent to the regents on Thursday, Hobbs said there was “no coherent vision” for fixing the problem and called for a third-party consultant to step in, along with other measures, as she had lost trust for how UA and the regents were responding to the issue.
“This is no longer about finances, this is about a lack of accountability, transparency, and at the end of the day, leadership,” the governor wrote in a letter that cited reporting from The Arizona Republic and azcentral.com about the UA’s acquisition of a troubled online school.
On Friday, Board of Regents Chair Fred DuVal acknowledged the governor’s concerns about the financial crisis and accepted a degree of responsibility.
“This situation happened on our watch and we are going to fix it,” DuVal said in a released statement. “The governor is right to be focused on leadership that will allow our institutions of higher education to best serve our students.”
He said the board will announce details of a remediation plan next week, in addition to an external “team of national higher education finance experts who will provide a third-party forensic analysis” of the situation.
One day prior, Board of Regents Executive Director John Arnold assured board members that UA was on its way to pulling itself out of what was described as a “financial crisis” in November. Arnold was appointed as the interim chief financial officer for UA as the crisis unfolded.
But hours after that meeting, Hobbs called for Arnold’s removal from the temporary position at UA “as quickly as possible” due to real or perceived conflicts of interest and raised concern about a “fox guarding the henhouse situation.”
Republic investigation cited: Governor calls out University of Arizona for mishandling financial crisis
DuVal’s statement on Friday did not specify if Arnold will stay on in his advisory position.
Multimillion-dollar budget shortfall discovered
Last November, UA officials said the university was experiencing serious cash flow issues and needed to correct a multimillion-dollar budget shortfall. Members of the board described the developments as a “financial crisis,” with administrators implementing budget cuts starting in December to address the concerns.
A few years before, in 2021, UA President Robert Robbins defended the university’s decision to acquire the for-profit online school Ashford University to the Faculty Senate, reminding members “why this affiliation made so much sense.”
Since then, a Republic investigation uncovered emails illustrating the extent administrators went to downplay concerns faculty had, instead saying Ashford University would help the UA’s financial trajectory and incorporate a more diverse student body.
$265M cost to university: UA President Robbins OK'd online school deal despite red flags
While UA officials received multiple warnings from faculty about the acquisition of what was then Ashford University ― a for-profit online college with a history of fraudulent marketing practices that saddled students with debt and questionable degrees ― they focused instead on crafting a public relations narrative to counter the doubters.
The deal went through, and Ashford was shifted to nonprofit status and rebranded as the University of Arizona Global Campus.
In the regents' special meeting on Thursday, DuVal defended UAGC, saying it did not create the current financial headaches.
But Faculty Senate Chair Leila Hudson criticized the stance, calling it a “strawman” argument.
“Without the data, without the investigation, they can’t just dismiss big-ticket items like UAGC,” Hudson said.
A representative from the Governor’s Office declined to address the situation further on Friday, saying Hobbs’ letter “speaks for itself” and that Hobbs “looks forward to continuing to work” with the regents on the matter.
Helen Rummel covers higher education for The Arizona Republic. Reach her at hrummel@azcentral.com. Follow her on X, formerly Twitter: @helenrummel.
Hannah Dreyfus is an investigative reporter for The Arizona Republic. You can reach her at hannah.dreyfus@arizonarepublic.com.
This article originally appeared on Arizona Republic: Arizona regents respond to Hobbs' demand for UA oversight changes
