Marshall Islands College Releases Internal Finance Review

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Suggests higher teacher workloads, more students per class

By Giff Johnson

SAIPAN, CNMI (Marianas Variety, Dec. 31, 2012) – The College of the Marshall Islands (CMI) must cut costs by freezing hiring and salary increases, and halting expansion of new programs that cannot pay for themselves, said a report issued by the college and released Friday.

But even this may not be enough to put the college on a sustainable financial path for the future, the internal financial review suggests.

Still, the College of the Marshall Islands is better off than it was in recent years, the report indicated.

"Although we continue face cash flow issues, financially speaking, we are in a better position than we were two years ago," said the CMI Financial Analysis that tracked historical trends and looks forward. "The big difference here that boosts confidence in the college’s financial health can be related to the level of expenditure controls, increased revenue in the bookstore, new policies and ongoing activities to curtail fixed overhead costs, and increasing revenue."

The report added: "We should not stop here, we need to do more."

The majority of CMI’s funding comes from tuition fees paid by U.S. scholarships under the Pell Grant program, which totaled $5.1 million in 2012, and an annual Marshall Islands government appropriation of $3 million.

A challenge for the college is the fixed overhead costs — salaries, housing, power bills — that are substantial, averaging over $500,000 per month.

The Financial Analysis asks whether or not the college can sustain itself under the current budget structures.

The report makes the point that in other colleges world-wide, deficits can be solved by raising tuition. "CMI does not have that same luxury due to very low levels of disposable income at the household level," the report said. "If the college decides to increase student tuition and fees, this will have a negative financial impact on the college."

Among immediate issues for the college is the GED — high school diploma equivalency — program. CMI needs an additional $75,000 to fully fund the GED program. Currently, CMI is subsidizing it, which takes money away from other areas of the college, including purchasing new textbooks.

The report lists several recommendations, including:

"Aside from the compensation study and increasing faculty workloads, there is a need to do a personnel audit, which will identify areas were staff are needed and areas that are over-staffed."

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