Audit Reveals Duke University's Robust Finances, Contradicting Rationale for Staff Cuts

This story was originally published by Higher Ed Dive. To receive daily news and insights, subscribe to our free daily Higher Ed Dive newsletter.

A recent financial audit of Duke University has cast significant doubt on the administration's justification for a sweeping cost-cutting program that included employee buyouts and layoffs. The analysis, commissioned by faculty, concludes the prestigious North Carolina private university is in "very strong financial condition," with ample discretionary reserves.

Howard Bunsis, an accounting professor at Eastern Michigan University who conducted the review, presented his findings to Duke faculty in late January. Bunsis, who has performed similar audits for institutions like the University of North Carolina and Wayne State University, based his work on Duke's audited financial statements through fiscal year 2025.

The report paints a picture of remarkable financial growth. Duke's total assets, including its health system, ballooned from $19 billion in 2017 to over $32 billion in 2025. The university consistently generates an annual cash surplus, which it invests. By the end of the last fiscal year, total investments stood at $21.8 billion. Excluding the medical center, Duke held $8 billion in unrestricted reserves—more than double its annual operating expenses of $3.9 billion.

"Any claims of budget 'holes' or 'deficits' requiring cuts are not supported," Bunsis wrote. "There are significant totally discretionary reserves and annual excess cash flows." He clarified that reserves aren't merely idle cash but provide "financial freedom and flexibility" to the administration.

This analysis directly challenges the narrative put forth by Duke's senior leadership last April. At that time, executives announced a "proactive" cost reduction initiative aiming to slash $350 million from the budget, citing the need to strategically realign against potentially lower federal funding. The program led to nearly 600 voluntary employee separations and, by late September, at least 45 layoffs, according to the student-run Chronicle.

The Duke chapter of the American Association of University Professors (AAUP) seized on the audit. "Bunsis’s presentation demonstrated that these cuts and layoffs are not driven by financial necessity," the faculty group stated, "but represent an effort to use the current moment to transform the university through a new round of austerity measures."

Bunsis also questioned the scale of external financial pressures. He estimated potential new endowment taxes under recent federal legislation would cost Duke between $15 million and $44 million—a sum he noted was likely overstated and minuscule relative to the university's resources. Furthermore, he found federal grant revenue remained stable in 2025 despite political disruptions to research funding.

Adding to faculty concerns, the audit highlighted a shifting employment landscape. Between 2017 and 2025, the number of administrative managers grew by 37%, while the total full-time faculty headcount increased by only 10.4%, suggesting priorities may be shifting away from the core academic mission.

Reader Reactions:

Dr. Eleanor Vance, Sociology Professor (20 years at Duke): "This audit confirms what many of us suspected. The 'financial emergency' was a pretext. It's deeply concerning to see resources being hoarded while colleagues lose their jobs and student services face strain. This is about governance priorities, not necessity."

Marcus Thorne, Alumni '08 & Donor: "As a donor, I want the university to be financially prudent and sustainable for centuries. Strong reserves are a sign of good stewardship. The leadership has a fiduciary duty to make tough, forward-looking decisions, even when the current balance sheet looks healthy."

Rebecca Choi, Graduate Student & TA Union Organizer: "It's an absolute betrayal. They're sitting on billions while exploiting adjuncts and cutting staff who make this campus run. This isn't 'proactive' management—it's greed and a power grab, hollowing out the university from within. The admin should be ashamed."

David Phelps, Higher Ed Policy Analyst: "Duke's situation reflects a broader trend where elite universities, even when flush, use macroeconomic uncertainty to justify restructuring. The audit raises valid questions about transparency and the real drivers behind cost-cutting, which often reshape labor models and academic focus long-term."