The D-G has the scoop this morning
on an internal report that states that Arkansas Baptist College
misspent $475,000 in federal grant money and may owe the federal Education Department more than $500,000 it spent on financial aid. The report, from a Georgia accounting firm specializing in historically black colleges hired by the school, stated that Arkansas Baptist was "in a serious financial crisis."
According to the report, for example, $150,000 in federal funding (with a $150,000 college match) that was earmarked for an endowment fund was instead drawn or spent for other purposes. It's unclear what the money was in fact spent on.
From the D-G, which acquired a copy of the report:
The private, historically black Little Rock college compounded its cash-flow problems by leaving money on the table year after year, says the scathing "operational assessment" by the Wesley Peachtree Group, a Georgia accounting firm that specializes in higher education and historically black colleges.
Dated June 30, 2017, and marked "strictly confidential," the 60-page document adds more context about Arkansas Baptist's long-standing financial struggles — including problems with the type of money at the heart of an ongoing crisis that has left faculty and staff members without paychecks.
Arkansas Baptist recently failed to make payroll
, which the college's interim president Howard Gibson blamed on "delayed" payments of federal money. The college — which has struggled with financial difficulties, including periodically failing to make payroll, for years — is heavily reliant on federal funding such as student loans to make ends meet. The D-G reports that the administration is now looking for other sources of funding to pay employees, such as a short term loan.
The college, which went through a leadership upheaval last year
, has been divided internally in recent years, with controversy arising
over personnel and business decisions, real estate investments, and the lapsing of tax-free status for the college foundation.
This is a complicated story, and I suspect there's more to come. There's much more in Eric Besson's story in the D-G
, which is quite strong — a thorough and detailed account of the current troubles and the backstory. My guess is that it's the tip of the iceberg.