Doug Guthrie claims GW backed away from expansion plan

Doug Guthrie said last week that top administrators pulled back from their pledge to invest in the GW School of Business, instead of padding its pockets to help boost the school’s national standing.

Guthrie told the popular business school blog Poets & Quants that the school’s $13 million in extra spending rankled administrators, who viewed the business school as a source of revenue for GW at large. The top leaders were also planning to parse down the school’s budget for the upcoming fiscal year.

“We had an agreement and they wanted to cut way back. I said we already were not where we need to be. If we have to give the University more money, I don’t think I’m the right person for this. I didn’t come here to be the steward of a cash cow. I came here to build programs and make investments,” Guthrie said.

The comments also underlined an added subplot to the latest batch of administrative turmoil: The tension between administrators over how much money goes to GW’s colleges and how much goes to the University at large.

Disputes between Guthrie and Provost Steven Lerman started this spring, after the business school chipped in about one-quarter less than expected to the University at large. Lerman has said the disagreement was cordial.

Guthrie spent $64 million to run the school, instead of the $51 million initially budgeted, meaning less funds went to the University as a whole. The difference, he said, went to build up the school’s rapidly growing online programs and executive education programs.

Still, Guthrie said the college made about $4 million dollars more than expected this year. That revenue helped cushion the funding gap and left the University with just $2.5 million to help the school stay in the black.

The brunt of the battle, Guthrie and Lerman have said, centered on spending for the 2014-2015 fiscal year.

Lerman and University President Steven Knapp had put forward a $57 million budget plan – a 10 percent drop from his spending over the previous year.

Guthrie argued the administration’s sudden pull-back from the school’s expansion plan kept GW far behind top business schools’ funding levels, particularly for faculty spending.

University spokeswoman Candace Smith shot down the claim in an email Friday, saying that the University “strongly disagrees” with Guthrie’s account.

She said the University asked Guthrie to pitch another plan for investments into the business school, but Guthrie never followed through.

“The University never backed away from that agreement. On the contrary, in a meeting earlier this summer, the provost and the treasurer invited Dean Guthrie to submit a proposal for an additional university investment in the School of Business. That proposal was never received,” Smith wrote.

“As it emerged that GWSB had significantly overspent its FY 2013 budget, the administration attempted to work with Dr. Guthrie to address the problem and to develop a plan for moving forward but ultimately was unable to do so,” she added.

The way GW allocates funds across most schools – by rewarding enrollment while taking in revenue for University-wide expenses and projects – can be difficult for school leaders to manage. The University is looking at reforming that model by hiring an academic budget chief in the provost’s office last spring.

“One of the hardest things about being at GW is the financial model, in terms of what the University central takes from each of the units and how it calculates what goes back,” a top academic leader, who asked to remain anonymous, said.

Bart Kogan, an alumnus and donor who sat on the business school’s Board of Directors until last year, said the University absorbed more than half of the business school’s revenue each year to make up for investments in Duques Hall until Guthrie arrived in 2010. Guthrie convinced administrators to give the business school and University an equal share of revenue.

“He certainly fought diligently, with some successes to increase the funding for the business school,” Kogan said. “He convinced them that it’s important to spend more to make the school improve.”

Guthrie said while he constantly wrestled with the top leaders, he figured he would stay on through the school’s accreditation process this year.

“I knew that the stand I was taking made it a pretty good chance they would say, ‘This isn’t working’ and let’s see it through accreditation. I decided I would be fine with it because I disagreed with the suggested budget cuts,” he said.

The firing – which came during a 15-minute meeting with Lerman – came as a shock.

He also sent a memo to the deans of the other colleges explaining his reasoning behind the overspending, which he said deepened administrators’ mistrust.

“They think I am a little bit uncontrollable,” he said. “And I understand how that makes them uncomfortable. We tried a lot of things here, and maybe it was too much too quickly.”

– Cory Weinberg contributed to this report

The Hatchet has disabled comments on our website. Learn more.