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Frequently Asked Questions (FAQ)


Q. Why did President Huntington resign?
A. The Board of Trustees accepted President Huntington’s resignation because the Trustees believed that the College was best served by having new leadership as it deals with financial challenges.

Q. What are the unmet financial obligations and how serious are they?
A. When the Board of Trustees first learned around the beginning of the school year of the unmet obligations, it hired a Chief Restructuring Officer and appointed a Special Committee of Trustees to oversee an investigation into the matter by an outside law firm and forensic accounting firm.  This investigation is ongoing. While the full impact of these unmet obligations is not yet clear pending the completion of the investigation, it is clear from the preliminary stages of the investigation that the burden on the College’s operating budget is substantial.  The Trustees will provide additional information about this investigation at a later date.

Q. Why weren’t these unmet financial obligations discovered earlier?
A. That is part of the ongoing investigation.  They emerged after the College’s controller retired at the end of the last academic year. One of the key focuses of the investigation is why these unmet obligations did not become known until recently and why they were not discovered by a nationally known outside firm that routinely audited the College’s financial statements and situation.

Q. Why hasn’t the College Community been told about these problems earlier?
A. When the problems were first discovered, the Board of Trustees took the prudent and expeditious steps outlined above to address the problem. Those actions indicated the challenges were greater, in terms of the amount of money involved, than originally suspected. While the independent investigation overseen by the Special Committee continues, the Trustees felt it was important to share what information they could with the College Community, understanding additional information will be shared when available.

Q. What steps is the College taking in response to the discovery and impact of these unmet financial obligations?
A. The unmet financial obligations have and will continue to have a serious impact on the College’s operations.  Interim President Escribano and the Trustees are considering all options in attempting to minimize disruptions to classes and other student activities.  These include  discussions with regulators, accreditation organizations, lenders, donors, alumni and other academic institutions, and developing plans for all potential outcomes. The Trustees are examining a variety of options to obtain additional bridge financing to stabilize the College’s finances in the short term as we pursue a long-term solution. It is clear there will have to be budgetary cutbacks, including potentially reductions in both administrative staff and faculty

Q. How will this affect students?
A. Students and their families are the Trustees’ top priority. The Trustees are exploring all options to ensure the College’s operations.  They are working hard to prevent disruptions and to protect student financial aid and maximize the opportunity to provide the fully-accredited, quality education students expect from the College.  Student financial aid is not affected.  We will update this FAQ and notify students via email as it relates to any updates that will be helpful to them.  Additionally, Interim President Escribano will be hosting student forums on many of our campuses to address any questions or concerns the students may have.  More information on these forums will be forthcoming. 

Q. How will this affect faculty and staff?
A. Along with our students, the College’s faculty and staff are its greatest asset.  The Trustees will do all they can to minimize the impact of the unmet financial obligations on faculty and staff.  The College, however, is in the process of making budget cuts which likely will include cutbacks both among staff and faculty. The College is also considering a Declaration of Exigency, which as outlined in the College Handbook, uses the American Association of University Professors definition of an Exigency as “an imminent financial crisis which threatens the survival of the institution as a whole and which cannot be alleviated by less drastic means.”

Q. Does that mean the College is closing?
A. No. The College is committed to fighting for its future. The Declaration of Exigency, if it is declared, would start a consultative process with the Faculty Senate to discuss cutbacks which could include professors. But as the definition of a Declaration of Exigency above indicates, the situation is critical and must be addressed immediately and aggressively.

Q. How can we get more information as the situation develops?
A. We will be updating this FAQ to keep the College Community apprised of developments as more information becomes available. The school also has established a special e-mail dedicated to providing a place to ask questions and get a personalized response. That e-mail is questions@cnr.edu.

Updated 10/18/16.

 

Statement by Gwen Adolph
Chairperson, Board of Trustees of The College of New Rochelle

The Board of Trustees of The College of New Rochelle has accepted the resignation of Judith Huntington as President.  The Trustees named Provost and Senior Vice President for Academic Affairs Dr. Dorothy Escribano as Interim President.  Kevin Cavanagh, the College’s Vice President of Enrollment Management, has agreed to serve as Executive Vice President of Strategy and Planning.

Around the beginning of the school year, the Trustees were advised of significant unmet financial obligations that had accrued over a period of time.  The Trustees took immediate action and appointed a Special Committee of Trustees to oversee an investigation into the matter.  The Trustees also engaged a Chief Restructuring Officer to restructure and manage the College’s finances and hired a forensic accountant and outside law firm to perform the investigation, which is ongoing.

Our foremost responsibility is to the students and their families who have invested their resources and their futures in the quality academic programming that the College has provided. We have made these changes because we are looking in new directions to protect and preserve the mission of The College of New Rochelle.  It is our commitment to work as hard as we can to see that those students have the opportunity to complete their education so they can take advantage of life’s opportunities.

We are examining all of our options as we work to meet the financial challenges and protect the interests of our students and the CNR Community.  We anticipate providing more details regarding this matter when the investigation is complete.

In the meantime, we have prepared the following FAQ – Frequently Asked Questions – concerning the difficult issues we face. We will regularly update the FAQ as information becomes available.

Update 10/18/16

The College of New Rochelle Announces $5 Million Donation from Anonymous Benefactor

Link to FAQS

The Board of Trustees of The College of New Rochelle announced today that an anonymous benefactor recently donated $5 million to the “We Are CNR” fundraising campaign launched to ensure the College’s future.

The $5 million donation, along with another $1.8 million in donations came as the Board was facing a financial crisis which emerged earlier this fall. The We Are CNR campaign was launched to secure the necessary funding to support the College in the short term while a long term restructuring plan is finalized.  The We Are CNR campaign has included both online and person-to-person outreach as well as a series of videos featuring faculty, students and alumnae/i sharing what CNR means to them.  For more information about the “We Are CNR campaign,” visit www.cnr.edu/weareCnr.

“In addition to the generous support of our alumnae, faculty, staff, students and friends, we had 100 percent participation from our Board and our Executive Team in helping us to reach this goal. The result was a sense of community and commitment to make CNR successful, at a time when we had all but run out of options to save this institution we love,” said Gwen Adolph, Chair of the Board of Trustees.

“We are humbled and grateful for the generosity of those who have donated and continue to donate, as well as the ongoing support we are receiving from alumnae and others in our hour of need. Although we have more work to do, I am pleased to say that the College will remain in business and continue moving forward.”

Adolph said the Board and College administrators will restructure the College and reduce costs while seeking additional funding  to stabilize the College’s finances and  meet past and current obligations. Staff reductions have already begun, and more are expected, as the College right-sizes its financial standing for the future.

“We are very grateful that we can continue to provide a quality education for students today and into the future,” said Dr. Dorothy Escribano, interim president.

In other positive news for CNR, applications for incoming students remain steady. This follows the enrollment of the largest freshman class in decades – and the first to admit men to the College’s School of Arts & Sciences in its history.

“We were motivated throughout this effort with the unshakeable belief that The College of New Rochelle was worth fighting for,” said Adolph. “Our work is not done. But this $5 million donation and additional financial support we have received allows us to continue this fight and to continue to provide a profound education in the Ursuline tradition to future generations of students who follow in the footsteps of the more than 50,000 alumnae/i who have come before them.”


Thanksgiving Comes Early For The College of New Rochelle   

The past several weeks have been a time of unparalleled challenge at The College of New Rochelle.  Thank you for your patience as The Board of Trustees and the Administration have worked to secure a path forward. 

We are pleased to share the positive news that through a variety of measures, most notably the generous gifts from alumni and friends of the College, we believe that we have secured sufficient resources and developed a financial plan to continue the mission of The College of New Rochelle for the next semester and beyond.  

There is still much to be done by all members of the CNR community to create the best future for the College, but at this time we simply want to thank you – faculty, staff, students, alumni and friends – for your momentous support.

The Board and Administration will continue to work to secure and improve CNR.  We will continue our funding efforts and make necessary changes in institutional operations.  We look forward to sharing more positive news with you in the weeks and months ahead.

Have a wonderful Thanksgiving.

Gwen Adolph, Chair, The Board of Trustees

Dorothy Escribano, Interim President

Updated 11/23/16


Preliminary Report from the Special Committee of The College of New Rochelle Board of Trustees

The Board of Trustees engaged a team of professionals to assess the current condition and future viability of The College of New Rochelle (CNR).  The review is still in progress, but preliminary findings indicate that there is a path forward for the College to remain a stand-alone institution.  It will require significant cost-cutting and a significant amount of outside funding; however, it is the primary goal of the Board.

In early September 2016 the Board of Trustees of The College of New Rochelle (CNR) was notified that approximately $20 million in payroll taxes were not paid for eight quarters, beginning in 2014.  This finding resulted in an immediate investigation led by a Special Committee of Trustees.  A Chief Restructuring Officer (CRO) from Grassi & Associates was engaged to restructure and manage CNR’s finances; the forensic accounting firm PKF O’Connor Davies was engaged to review the school’s financial records and practices; and the external law firm Pepper Hamilton LLP was engaged to conduct an investigation of all facts for legal ramifications. 

The goal of the investigation is to determine how and why the payroll taxes went unpaid, who was responsible for the non-payment, if any funds were diverted from CNR, and if there were any other undiscovered related issues.  The investigation is not complete, but the Special Committee did not want to delay any longer sharing preliminary findings with the CNR Community.

To date, the investigation has determined that the CNR’s controller failed to file the required tax returns and pay the taxes due.  Related matters are still being investigated.  It has further established that CNR’s senior management at that time did not provide accurate information to the Board about the College’s finances.  The financial information that was provided to the Board was incorrect, incomplete, and lacked transparency.  Additionally, an independent external auditing firm audited CNR’s financial statements for recent years and found no material issues.  The Board was permitted to rely upon these audits.

The investigation has also revealed other significant debts, liabilities, and depletion of assets including the unrestricted endowment. The additional debts and liabilities total $11.2 million. 

Based upon the discovery of the College’s true financial status, the Board has taken critical steps to stabilize the institution.  These include the appointment of Interim President Dorothy Escribano and Executive Vice President Kevin Cavanagh, the institution of mandatory new financial controls, and the identification of essential cost-cutting opportunities.  It has also noted the need to revamp overall practices and procedures as the College moves into the future.

Because the tax liability was undisclosed for so long, the Trustees do not have the normal course of time to address the College’s financial stress.  This is an urgent matter.  CNR needs a significant amount of outside funding to meet its immediate needs.  The Board is diligently examining all feasible options to protect the students and preserve the school’s mission. This effort includes discussions about various possible options with other institutions.   The very last resort is closing the College and placing students in other schools. 

Updated 11/01/16


Statement by Gwen Adolph, Chairperson, Board of Trustees of The College of New Rochelle

 

The Board of Trustees of The College of New Rochelle has accepted the resignation of Judith Huntington as President.  The Trustees named Provost and Senior Vice President for Academic Affairs Dr. Dorothy Escribano as Interim President.  Kevin Cavanagh, the College’s Vice President of Enrollment Management, has agreed to serve as Executive Vice President of Strategy and Planning.

Around the beginning of the school year, the Trustees were advised of significant unmet financial obligations that had accrued over a period of time.  The Trustees took immediate action and appointed a Special Committee of Trustees to oversee an investigation into the matter.  The Trustees also engaged a Chief Restructuring Officer to restructure and manage the College’s finances and hired a forensic accountant and outside law firm to perform the investigation, which is ongoing.

Our foremost responsibility is to the students and their families who have invested their resources and their futures in the quality academic programming that the College has provided. We have made these changes because we are looking in new directions to protect and preserve the mission of The College of New Rochelle.  It is our commitment to work as hard as we can to see that those students have the opportunity to complete their education so they can take advantage of life’s opportunities.

We are examining all of our options as we work to meet the financial challenges and protect the interests of our students and the CNR Community.  We anticipate providing more details regarding this matter when the investigation is complete.

In the meantime, we have prepared the following FAQ – Frequently Asked Questions – concerning the difficult issues we face. We will regularly update the FAQ as information becomes available.

Updated 10/18/16


Frequently Asked Questions (FAQ)

Q. When were the unmet obligations that led to the financial crisis discovered?
A. In late August 2016, the Executive Committee of the Board of Trustees first learned of significant unmet financial obligations that had occurred over a period of at least three years. These financial irregularities began to be discovered after CNR’s controller retired  and various vendors began to seek payment for outstanding obligations. Additionally, in late August, the Executive Committee learned of outstanding payment obligations due to federal and state taxing authorities. Those combined obligations, and others that were discovered later, threatened the sustainability of CNR.

Q. What actions were taken in light of the discovery?
A. Once aware of the situation, the Board took immediate action and appointed a three-person Special Committee of Trustees to address the crisis on a day to day basis, oversee an investigation into the matter and assess the current condition and future viability of CNR.

To that end, the Special Committee retained an outside law firm to investigate the financial mismanagement and determine who within the College Community was responsible for its creation; a forensic accounting firm to determine the full extent of the financial situation; and a Chief Restructuring Officer to restructure and manage the financial operations of the College during the crisis.

Q. What has the investigation uncovered?
A. The investigation uncovered problems that were serious enough that we referred the matter to federal prosecutors at the United States Attorney’s Office. We are cooperating fully with their investigation. At this point, we cannot share additional details as doing so may hinder that investigation but when we are able to do so we will share more information. 

Q. Will legal action be taken?
A. We have referred the matter to federal prosecutors and we will cooperate with the United States Attorney’s Office to the fullest extent possible. 

Q. What has been done to address the debt and identify a path forward for the College?
A. The College is addressing the crisis on multiple levels.

With regard to unpaid taxes, in October, the College notified both State and Federal authorities of its nonpayment and filed the outstanding returns. In November, the College requested in-person meetings with State and Federal authorities to address the College’s outstanding obligations.

With assistance from the College’s attorneys, the Chief Restructuring Officer is working to resolve the matters of demand letters and lawsuits filed by vendors.

Due to the financial restructuring and capital raising efforts that the Board and CNR leadership have tirelessly pursued over the past several weeks, outside funding was secured in late November that has enabled the College to continue as a viable institution.

CNR began a “We Are CNR” fundraising campaign with outreach to alumnae/i, parents and friends that resulted in donations and/or short term pledges of more than $7,000,000 to date, which included a $5,000,000 gift from an anonymous donor.

The Board authorized substantial expense reductions, including layoffs, in order to stabilize CNR’s finances.

Also, the Special Committee directed the sale of real property on the main campus, which we estimate will generate an additional $1,500,000 to $2,000,000. The auction was held on December 14, and the results will be shared with the Board during the week of December 19.

Q. Does this mean the crisis has been averted?
A. The recent fundraising and restructuring efforts have helped to avert the immediate crisis, but there is still critical work to be done. The Board, College administrators, and the entire College Community must continue to work to restructure the College in a meaningful way that balances its operations and governance to avoid any such crisis from happening again.

Q. What else does the path forward for CNR include?
A. The Board is planning an institutional review of all business practices, operations, and governance. This review will include evaluating cost reduction opportunities, campus location strategies, physical plant maintenance, compensation levels and benefits. A national search for a new president will be undertaken in the coming months. In addition, plans will be implemented to restructure the administration; ensure authentic participation in governance by faculty, staff, students and alumnae/i; and to restore the College’s credibility with every group of stakeholders – the academic community, the business community, the local community, state and federal authorities, as well as our own faculty, staff, alumni, and students.

Q. How can I ensure my donation is getting to where it needs to go?
A. All money received is being carefully monitored and expended at the direction of our Chief Restructuring Officer, Ronald J. Eagar CPA, of the firm Grassi & Co., who is currently managing all financial activities of the College. This includes monitoring all cash flow, understanding the day-to-day costs of running the College as well as helping to develop a path forward for the College that addresses operating costs and enrollment. He is also responsible for advising the Board as it seeks to restructure the College’s financial obligations.

Q. Have students been negatively affected by the crisis?
A. Every effort has been made to ensure that our students have not been affected. The College’s academic programs and extracurricular activities continue to be offered. Co-curricular resources, such as library services and tutoring will continue to be provided to our students at the same level as they are now.

Q. Is the College’s enrollment strong?
A. Yes. There has been no unexpected decline in student enrollment for the spring semester. Additionally, we look forward to the following new opportunities for student enrollment:

  • Relocation of Rosa Parks Campus (Harlem) to a new fully renovated, technology-rich contemporary facility which will expand educational offerings at that location to include undergraduate, nursing and graduate degree programs;
  •  Launch of RESET program, funded by a $2.7 million grant, to provide advanced education for teachers of English language learners through graduate-level teacher certificate programs;
  • Expansion of partnership between CNR and DC37 union to allow union members to enroll in courses at any of the College’s locations throughout New York City and in New Rochelle.

 

Q. If the College declares financial exigency, what will it mean for the students?
A. Should the Board of Trustees determine that a declaration of exigency is warranted, it would begin a process that will enable the College to adjust its staffing in an effort to reduce costs.  While faculty cutbacks may be necessary, the quality of our academic programs will be maintained.

Q. How can we get more information as the situation develops?
A. We will be updating this FAQ to keep the College Community apprised of developments as more information becomes available.

 Updated 12/16/16