Kelli Perry, assistant vice president for finance and controller at Rensselaer Polytechnic Institute (Rensselaer), began working with NACUBO on issues that impact higher education in 2017. She was a primary negotiator during the Department of Education’s borrower defense and financial responsibility negotiations in 2017–18, and she began presenting at national conferences and joined NACUBO’s Intermediate Accounting and Reporting faculty and Accounting Principles Council (APC) in 2019. This year, Kelli represented not-for-profit institutions during ED’s Title IV negotiations on Institutional and Programmatic Eligibility and also became the APC chair. Kelli has a passion for working on operational efficiencies across campus, developing new staff, and explaining financial results.
Kelli talked with Sue Menditto, NACUBO’s senior director of accounting policy, about accounting, representing higher education nationally, and some of her professional and personal favorite things.
Have you always been one to join and volunteer?
If I feel that I can add value, yes. My first volunteer effort on financial responsibility in 2017 was brought on because there was an interpretation issue with the Department of Education that needed to be resolved. I felt that I had insight and knowledge to add to the resolution. I also learned a lot through the experience. On campus, I am involved in many different areas and when I see something that may need improvement, I typically will make suggestions and offer my time in implementing a solution.
As a controller, do you find that you’re well positioned to make business process suggestions, perhaps because you understand the structure of the university?
Yes, because as a controller I deal with so many people and university areas on a daily basis–student life, financial aid, procurement, athletics, and so on–and answer so many questions that you start to learn what each area is doing and where they may have challenges. Being in the controllership role really helps you see across the organization and where different areas intersect. You know the strengths and weaknesses of many departments and where the processes can break down. Many times, different departments have common challenges they are trying to solve and don’t realize it. This can lead to multiple solutions when one would have worked if they knew the other was experiencing the same challenge. A lot of times, a controller can be the middleman that brings them together.
In general, at Rensselaer, we are working quite a bit on administrative optimization. This post-COVID time is a good time to optimize.
Did you begin your career in public accounting?
Yes, I was with KPMG for two years. My focus was mainly nonprofits and higher education, although I did get to experience the other industries. There was something about the nonprofit sector that I was drawn to. I loved public accounting because you got to experience going to different clients all the time and learning new environments, but I received an offer from a college client that I couldn’t refuse at the time. If I look back, I do think that the disadvantage of leaving public accounting when I did is that I am not a purely technical accountant. I lean more towards being a bit of an operations specialist who can do accounting pretty well. Offices are not made up of one person and you work as a team. I have been able to find strong technicians to complete my team and we are able to accomplish all that we do because of all of them. Also, effective operational work can ultimately make the job of a controller easier.
What was the most challenging FASB standard you ever implemented?
I think ASU 2016-14—not because it was difficult, but because of all of the needed communication to stakeholders about the changes. Getting executive leadership on board was a concerted effort. Plus, 2016-14 gave many options in how you presented the required changes. Everyone needed to be on board with the recommendations.
Your answer is interesting because FASB intended the standard to be one of communication.
Agreed, but with the intent of communication, 2016-14 included a lot a change and change is not always easy for everyone, especially when there are a lot of options. People that don’t see nonprofit financial statements every day needed to be educated on those changes.
How do you feel about being a member of the APC?
It’s been so wonderful to meet colleagues from around the country and share ideas and talk through problems, especially post-COVID because there was and is no roadmap. Hearing what other institutions are doing has been so valuable. It’s taken me a long time in my career to understand the importance of networking, and it really is something that all staff should be encouraged to do in their careers. Working with NACUBO, the Department of Education, and on the APC has forced me to grow and feel comfortable asking, reaching out, and sharing.
One of Rensselaer’s prior vice presidents really helped me to get involved and grow. She thought I had the ability but recognized that I felt most comfortable being reserved in a lot of instances. She pushed me out of my comfort zone. Joining the APC and meeting and working with you and NACUBO has really enhanced my career.
Kelli, you proposed regulatory language for two financial responsibility issues during the January-March negotiations on institutional and programmatic eligibility – can you talk a bit about that?
Yes, as you know, we asked for an appeals process when ED calculates a composite score that differs from the one the university calculates. Mistakes are made; institutions should have the ability to challenge something they may think is wrong. I also went on record and asked that long-term debt refinancing rules be clarified to consider only the par value of refinanced debt. In this way, when new refinanced debt is compared to the original issue(s), there is comparability.
Right now, ED considers premiums, for example, as the new refinanced loan value. Consequently, the current rule that excludes refinanced debt if the proceeds exceed the book value of the original debt does not reflect how refinancings work or the beneficial economics of the transaction in a low interest rate environment. With the current rule, schools could be punished for making sounding business decisions regarding their debt.
Neither of these issues really got much traction because they were not technically part of what was being negotiated. It’s somewhat frustrating, because the department seemed to allow certain add-ons but not others in the negotiation process.
It seems to me that student transcript holds as well as new language concerning state licensing rules for where enrolled students legally live were allowed to be added.
Well, the intent of the negotiations is very student-focused, as they should be, and these two items fit into what the department was trying to accomplish. I wish the department had recognized that the debt issue also has an impact on students. Disallowing certain refinanced long-term debt when calculating financial responsibility may result in added institutional costs or reputation risk that impacts students in the long run. Unfortunately, because it did not directly relate to students, the request got lost among the many negotiation-ruling experts at the Department.
On proposed student location and state licensing rules, I think it would be complicated for residential colleges and universities that offer professional degrees. It seems like this may be a concern for on-line universities where students can live anywhere while taking courses.
With transcript holds, I think that campus administration does need to apply judgement based on the amount of time the student attended and significance of the charges. For example, it might make sense to only withhold the section of the transcript that relates to an unpaid balance and not the transcript in its entirety.
What’s you biggest learning experience as a negotiator?
That it’s very hard to compromise and come to consensus if you truly don’t understand where the other parties are coming from. In the case of these negotiations, there are multiple points of view: ED’s perspective, the student point of view and that of the institution. So, in order to compromise one really needed to be having conversations with other negotiators to explain why something might be problematic. Everyone around the table had the best interest of students in mind, but everyone didn’t understand the complexities that certain concepts might create. The department has a difficult job in determining what will work for all involved.
What do you do for fun?
I love outdoor activities. I’m lucky enough to be living in a lake house, which is perfect for outdoor activity. I’m also planning a renovation and redesign, two things I really enjoy! My husband and I always have a project going on. I also appreciate time with family and friends, especially when I can see my children, who are both away at college.