The University of California, Los Angeles (UCLA) has terminated its chief financial officer, Stephen Agostini, effective immediately. The decision comes just days after Agostini spoke to a student newspaper, alleging years of significant financial mismanagement, incorrect financial statements, and a projected deficit of $425 million for the current fiscal year.
Key Takeaways
- UCLA's Chief Financial Officer, Stephen Agostini, was fired after a critical interview with the student newspaper, the Daily Bruin.
- Agostini alleged a projected $425 million deficit, incorrect financial reports dating back to 2002, and widespread financial failures.
- University officials have disputed the size of the deficit and defended the integrity of their financial oversight.
- Reem Hanna-Harwell has been appointed as the interim head of finance.
CFO Alleges "Serious Errors" in University Finances
The controversy began after an interview with Stephen Agostini was published last Friday in the Daily Bruin. Agostini, who joined UCLA in 2024 after a tenure at the University of North Carolina at Chapel Hill, provided a stark assessment of the university's financial health.
He claimed that unaudited financial reports posted on UCLA’s website have been incorrect since 2002. His statements pointed to what he described as systemic issues within one of the nation's top public universities.
"I have rarely seen the kind of financial management flaws and failures that I see here when I got here," Agostini told the student paper. "There are days I’m still amazed how things got this way."
Agostini further stated that in his previous roles, posting such erroneous financial data would be "grounds for immediate dismissal," adding he did not want to "advertise how badly the place has been managed financially."
Breaking Down the Deficit Claims
At the core of Agostini's allegations is a projected $425 million deficit for the current fiscal year. He attributed this shortfall to several key factors:
- Increases in salaries for faculty and staff.
- An $80 million shortfall within the university's athletics program.
- A trend over the past eight to nine years where spending has grown faster than revenue.
By the Numbers
According to Agostini's claims, approximately 75% of UCLA's academic units were operating with deficits. The most recent unaudited financial statement for the 2023 fiscal year showed revenues of nearly $11.2 billion but a deficit of $563 million.
These figures paint a picture of widespread financial strain across the institution, extending far beyond a single department or program.
UCLA Disputes Claims and Defends Leadership
In a swift response following Agostini's dismissal on Tuesday, UCLA's administration challenged his characterization of the university's financial situation. Mary Osako, the vice chancellor for strategic communications, issued a statement addressing the claims.
The university contends that the actual deficit is "substantially lower than the amount referenced publicly." According to the statement, Agostini's estimate included spending proposals that had not yet been approved by the administration.
Broader Context
Osako's statement attributed the financial challenges not to administrative mismanagement but to "broader institutional and external factors affecting higher education." This suggests UCLA views its situation as part of a larger trend impacting universities nationwide, rather than an isolated failure of oversight.
The university also took steps to reassure stakeholders of its stability and the competence of its leadership, both past and present. The statement from the chancellor, Julio Frenk, announced Agostini's departure was "effective immediately."
"In spite of current strains, UCLA has the financial strength to maintain its excellence while adapting to new financial realities and opportunities," Osako wrote.
The university has not yet clarified whether it stands by the accuracy of the decades of unaudited financial statements that Agostini called into question. However, Osako's statement noted that the chancellor "is confident in the integrity of UCLA’s leadership, past and present, and their financial oversight and decision-making processes."
An Unusual Public Dispute
The public nature of this disagreement is highly unusual for a major university. Typically, internal financial debates and leadership changes are handled discreetly. The decision by a sitting CFO to voice such strong criticisms to a student newspaper, followed by his rapid termination, has brought intense scrutiny to UCLA's administrative and financial practices.
The timing of the incident is also notable, as it adds a layer of internal turmoil while the university is reportedly in negotiations with the federal government over other matters.
With Agostini's departure, UCLA has named Reem Hanna-Harwell to serve as the head of finance in an interim capacity. The university now faces the challenge of navigating its financial future while managing the public fallout from this high-profile conflict.
