Ohio Administrative Code Title 126:3 - Higher Education Fiscal Watch
Ohio Administrative Code – Title 126:3 – Higher Education Fiscal Watch
Overview:
Title 126:3 of the Ohio Administrative Code outlines the rules and procedures for the Higher Education Fiscal Watch Program, established to monitor the financial health of state colleges and universities in Ohio. The program is overseen by the Office of Budget and Management (OBM) in coordination with the Chancellor of the Ohio Department of Higher Education.
🔍 Purpose:
To identify financial stress in state-supported institutions of higher education and initiate intervention when necessary to ensure financial stability.
🧾 Key Provisions:
126:3-1-01 – Definitions
Establishes critical terms like:
Primary Reserve Ratio
Net Income Ratio
Viability Ratio
Composite Financial Index (CFI) – a combined score assessing an institution’s financial condition.
126:3-1-02 – Financial Monitoring Process
Institutions must submit annual and quarterly financial statements.
OBM calculates each institution’s CFI annually using GAAP (Generally Accepted Accounting Principles) data.
Thresholds are established:
A CFI of 1.1 or below triggers a "watch" designation.
126:3-1-03 – Fiscal Watch Designation
If an institution’s CFI stays below the threshold for two consecutive years, it may be placed on Fiscal Watch.
The Chancellor and Director of OBM make the final designation decision.
126:3-1-04 – Corrective Action
Affected institutions must submit a Corrective Action Plan (CAP).
CAP must include:
Expense reductions
Revenue enhancements
Strategic planning
OBM and the Chancellor will monitor implementation and progress.
126:3-1-05 – Removal from Fiscal Watch
To be removed:
The CFI must improve above the threshold.
The institution must demonstrate financial sustainability.
Final decision made jointly by OBM and the Chancellor.
🏛️ Administering Agencies:
Office of Budget and Management (OBM)
Ohio Department of Higher Education (ODHE)
📌 Notes:
This rule is a preventative financial oversight mechanism, not a punitive action.
Aims to promote early intervention and long-term financial planning in higher education.
RELATED Blog
0 comments