This week, followers of the University's financial state heard lots of good news--and some that was very, very bad. The bad was so bad, in fact, that one administrator said the University is facing one of the most formidable financial crises in recent memory.

The bad news is that the University had amassed a $52.2 million deficit from its employee benefits spending. In only four year, the University as wiped out its reserves for employee benefits and plunged into debt, which is now owed to the Corporation.

A special task force chaired by Provost Jerry R. Green was formed months ago the conduct a comprehensive review of Harvard's benefits package. But if they had seen the data on the $52 million deficit, they didn't mention it to the Faculty Council, who first saw the figures on Wednesday.

Only a day earlier, professors' financial fears were allayed by Den of the Faculty Jeremy R. Knowles at the faculty's monthly meeting.

Knowles discussed highlights from his annual budget letter, distributed to all faculty members on February 9. He stressed "cautious optimism," declaring that the finances of the University were moving swiftly towards stability.

Knowles went so far a say that "the downward trajectory of the annual deficit...shows that we are driving towards a balanced budget within a year or two."

Juxtaposed against the revelations of the next day before the Faculty Council, Knowles' assertions appear startlingly incomplete, if not inaccurate.

The finances of the FAS may be improving, but benefits as crucial as social security, pensions, health care and dental care may be in jeopardy for faculty and staff members throughout the University.

And any solution from Green's task force could be months off.

"It's too soon to tell what kinds of solutions the task force may come up with," said Director of Benefits Administration Joan Bruce.

Bruce also said, however, that administrators had been working to formulate a plan to take steps towards introducing managed health care for faculty and staff as a method of cost containment.

"Our costs are not driven by the numbers of people who participate, but more by the design of the plans they participate in," Bruce said.

This projection contradicts a suggestion made by Secretary to the Faculty Council John B. Fox Jr. '59. Fox said this week that the costs of benefits--particularly for health care--are rising in part because of increased enrollment in University health care programs.

Fox also attributed rising costs to increasingly generous benefit programs and rising social security costs, as well as a national force beyond Harvard's control: the rapidly escalating costs of health care itself.

There's no reprieve in sight. Even if the University could completely eliminate the $52 million deficit it has already amassed, within five or six years another shortfall of the same scale would accumulate, Fox said.