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March 30, 1995

O'Connor orders freeze on hiring

In an effort to prevent an expected revenue shortfall of approximately $5.7 million in the last quarter of the current fiscal year, Chancellor J. Dennis O'Connor yesterday, March 29, ordered both an immediate freeze on hiring and a tightening of controls on expenditures.

The hiring freeze will extend through June 30, the end of the current fiscal year, and is expected to result in a savings of approximately $2.2 million, according to a memorandum from the chancellor.

Restrictions on spending also will cover the period through June 30 and will save an anticipated $1.5 million, notes the memorandum, which was sent to senior administrators, regional campus presidents, deans, directors and department chairs.

Together the hiring freeze and tightening of controls on expenditures are expected to trim the budget shortfall by approximately $3.7 million.

Another $2.2 million is expected to be saved through a combination of the recently negotiated settlement of 1994 and prior claims with HealthAmerica, energy saving measures taken this year, the decrease in financial aid that accompanied this year's enrollment decline, and a delay in centrally supported construction projects.

"I have directed Senior Vice Chancellor Ben Tuchi to instruct the offices of Human Resources, Budget, and Purchasing to immediately develop the controls necessary to ensure that the savings resulting from these actions are fully realized and appropriately redirected to reduce the current shortfall," the memo states.

"I am acutely aware of the difficulties these actions will impose on you, your colleagues and your activities over the next few months," the memo continues. "Our goal is to achieve a balanced budget. To achieve that goal will require the concerted willingness, determination and commitment of all responsibility centers." The hiring freeze prohibits the hiring of staff and faculty or the processing of salary increase requests through June 30.

However, written and verbal employment offers made through the Office of Human Resources prior to March 29 will be honored, according to Associate Vice Chancellor Darlene Lewis. Part-time faculty assigned to teach during the summer term also will be hired. Vacancies funded through external, non-University sources will be exempt.

Provost James Maher said the freeze will have "no effect at all" on faculty hirings for September. "We're talking about saving hard money in the fourth quarter of this fiscal year," Maher said. "All of the approved searches go on. Offers can be made to those faculty who will be coming in the next fiscal year. We're just talking about saving money during the next quarter of this fiscal year. It's filling positions over the next three months, people who will start work in the next three months, who will be affected.

"All hiring needed to run classes in the summer session also will go on," he added. "There is no freeze on that." Neither will hiring at the University of Pittsburgh Medical be frozen. "Not if it's hospital dollars," Chancellor O'Connor said after the March 29 University Senate meeting. "The memo says University funds sources." April, May and June usually see a three-fold increase in purchasing activity and dollar amounts by departments and units throughout the University, according to the memo.

To curb that rush of spending, the chancellor has ordered that all purchases, including travel and entertainment, be carefully reviewed and explicitly approved by the appropriate senior vice chancellor or vice chancellor before they can be submitted for purchasing or payment action.

The reason so much spending activity occurs in April, May and June is because departments and units cannot carry money left in their budgets into the next fiscal year and do not want to lose those funds. Senior Vice Chancellor for Business and Finance Tuchi said that all money saved by tightening expenditures will be used to eliminate the expected $5.7 million deficit.

"The first priority is to make absolutely certain there is no deficit," he said.

Within the next few days additional instructions on the hiring freeze and tightening of expenditures will be distributed to all deans, directors and department heads.

–Mike Sajna

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