29 Financial Exigency

Policy Statement (Board Approval Date:  03/22/11)

In the event of state revenue failures, reductions in enrollment, or both, there may come to exist a state of financial exigency, which is defined as “a state of financial crisis which affects the College as a whole to the extent that it may become necessary to dismiss permanent appointments or other contracts prior to their normal expiration or at the end of current contracts, and a state in which the survival of activities deemed essential to the mission of the College is in doubt.”


  1. Declaration of Financial Exigency: In the event of imminent financial exigency, as determined by the Board and the College administration, the President will declare to all College personnel that a state of financial exigency exists.
  2. Board Action: In the state of financial exigency, any budgetary entity may be discontinued by the Board and the College administration. Total paid benefits and salary may be held to the same dollar value.  Employees may choose to take salary reduction or pay a portion of the benefits to stay within the necessary dollar amounts.  Uniform procedures will be used to determine how required reductions are to be accomplished.
  3. Employee Participation: Representatives from all employee groups, serving on an ad hoc committee, will be involved in reviewing and recommending adjustments due to financial exigency.
    1. Reductions of Administrative and Other Support Services: Curtailment and/or consolidation of administration and other support services must receive equal consideration with other institutional areas.
    2. Reductions in Instruction: The ad hoc committee will review pertinent studies of the College’s programs and activities in the area of instruction.  Program achievement and cost effectiveness will be considered.  This may, in some cases, necessitate the retention of programs, services, and activities which are not strong, but which are central to fulfilling the mission of the College.  As reductions are considered in an academic area, rights under tenure will be protected.  Tenured members of the faculty will normally be retained in preference to non-tenured members.  However, exceptions to this may become necessary if it would lead to serious gaps or distortions in particular disciplines.
      1. When one position must be dismissed and two or more faculty members are involved, these guidelines will be followed:
        1. Tenured faculty will have preference over non-tenured faculty members.
        2. Teaching performance via faculty evaluation procedures will be considered.
        3. Seniority will be compared.
        4. Related professional activities (institutional service) will be studied.
        5. Degrees and credentials will be compared.
        6. Industrial and work experience when essential to the position will be considered.
        7. Past enrollment in course selections will be checked.
      2. The administration will then decide, after fair and reasonable consideration of these factors, which person is to be dismissed.
      3. Elimination of a Budgetary Entity and Non-Instructional Services: The ad hoc committee makes recommendations to the President relative to each budgetary entity and/or service which should be curtailed or discontinued or for which positions should be eliminated.
        1. Each subcommittee on financial exigency will review and provide advice on which budgetary entity and/or service should be curtailed or discontinued within the division/unit or which positions should be eliminated.
        2. The apparent and/or expected effect of the recommended curtailment, discontinuances, or dismissals, on the institution as a College must be examined and documented by the Ad Hoc committee.
      4. Report of the Ad Hoc Committee: On the basis of pertinent information, advice, and other consideration, the Ad Hoc committee will submit to the President a report specifying overall recommendations for overcoming the crisis situation.
      5. Due Process Concerning Employees Affected by the Financial Exigency:
        1. Consideration for employee reductions must include compliance with Affirmative Action requirements and adherence to due process and compensation benefit program policies. It should be made clear that the dismissal of an employee because of financial exigency is distinct from dismissal for cause. Nothing in the process necessarily implies a lack of professional fitness of the individual.
        2. Recommendations to eliminate positions or programs or to curtail programs and services, generally, should not include the dismissal of appointment of a full-time employee in favor of retaining a part-time one. In some cases, an arrangement for early retirement of a full-time employee, by adding appropriate institutional funds into the individual’s retirement income, may be worked out with the consent of the employee.  In other cases, a change from full-time to part-time service may be a feature.
        3. In those cases where there is no realistic choice other than terminating the services of an employee, the granting of as much notice as possible should be given high priority.
        4. In all cases of dismissal of appointment because of financial exigency, the position of the employee concerned must not be filled by a replacement within a period of two years unless the released employee has been offered reinstatement and provided a reasonable time (i.e., 30 days) in which to accept or decline it.
      6. Emergence from Financial exigency: Throughout the entire period of financial exigency, the ad hoc committee will continue in its advisement capacity to the President until the President declares that the financial exigency no longer exists.  When it has been determined that financial exigency no longer exists, the ad hoc committee will be dismissed by the President.


Murray State College Institutional Policies and Procedures Copyright © by Murray State College. All Rights Reserved.

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