Rigged From the Beginning

E&Y was never asked whether to integrate UAGC and UA Online nor to provide any forecasts

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On Monday, Phil described the updated proposal to fully integrate the University of Arizona Global Campus (UAGC) with the internal University of Arizona Online (UA Online, aka Arizona Online) under one brand, with combined operations. A key argument in that post was that the E&Y report serving as the basis for the new plans did not evaluate the risks of such a combination, particularly the ongoing enrollment declines and legal liabilities.

On deeper reading, it is obvious that University of Arizona (UA) executives and the Arizona Board of Regents (ABOR) did not even ask E&Y whether it should do such an integration. The only question was how to do such an integration, without any true forecasting.

The Demand

The original demand from Governor Hobbs for an independent review came in January [emphasis added].

It is now apparent that we can no longer continue on the same course. As Governor, and as a member of the Arizona Board of Regents, I have a responsibility to ensure accountability in order to restore faith and trust in the university. In light of the recent developments, I no longer trust the process that is in place. In order to avoid this from becoming a case of the “fox guarding the henhouse,” it is time to bring in an independent, third-party consultant. This entity will be responsible for providing a plan of proposed solutions to solve the ongoing crisis at the University of Arizona, conducting an external audit, and providing monthly reporting directly to both my office and to ABOR. An independent entity’s perspective has the potential to add credibility to the process from an internal and external perspective. The hiring of this consultant should be completed with the utmost urgency.

This led to UA hiring E&Y in February to produce the report described on Monday. At least they got the urgency part right.

The Response

But E&Y makes clear in the report’s disclaimer that it is not an audit and did not truly involve forecasting [emphasis added].

The services we performed were advisory in nature. While EY’s work in connection with this Report was performed under the standards of the American Institute of Certified Public Accountants (the “AICPA”), EY did not render an assurance report or opinion under the Agreement, nor did our services constitute an audit, review, examination, forecast, projection, or any other form of attestation as those terms are defined by the AICPA.

This disclaimer is consistent with Phil’s description Monday. No real analysis of forecasting or future risks. Despite this, E&Y provided the soundbite that UA and ABOR wanted.

What E&Y actually said was a comment mostly on the potential cost savings aspect and what it implied.

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