New Rule Cuts Bureaucratic Red Tape to Help Public Universities Weather COVID-Related Financial Storm
With state universities facing unprecedented and still-rising costs due to the ongoing COVID-19 pandemic, the Legislative Audit Commission (LAC) has overwhelmingly passed a resolution filed by State Senator Chapin Rose (R-Mahomet) to give the institutions greater flexibility to pay bills.
“The COVID pandemic has caused significant financial drain on our state institutions of higher education," said Rose. “The Commission’s decisive action today eliminates some of the red tape that hinders a university’s ability to deftly maneuver funds between categories. By providing greater flexibility, we are giving our institutions the potential ability to offset some of the direct losses of tuition and housing dollars that they have incurred.”
Specifically, the resolution allows the universities to be released from restrictions on Indirect Cost Recovery (ICR) funds. ICR funds come from federal grants and are intended to help universities deal with overhead costs related to the grants. While federal law in many cases does not restrict how the funds are spent, state university guidelines have strict rules about how the money can be spent and are, generally, not available to a university to defray expenses occurred in other areas of a university’s operations.
Rose’s resolution temporarily removes the restrictions on ICR funds, freeing those funds up as a potential source of revenue to help our state supported institutions deal with the massive costs of the COVID-19 pandemic.
The resolution overwhelmingly passed at the November 17th meeting of the LAC and is effective immediately.
“I want to thank the universities for bringing this to my attention as a way to help minimize the impact of COVID’s financial drain on students and their families. But this isn’t limited just to the U of I. While each college is different in terms of the amount of ICR funds that they may hold, it will apply to all of the 4-year public institutions in the state. We simply have to provide our institutions as much flexibility as possible to weather this storm,” said Rose.
“We are grateful to Senator Rose and other members of the commission for their action to help our universities weather the financial impact of the pandemic while protecting affordability for students,” said Tim Killeen, president of the University of Illinois System.