College Spends Most, Graduates Less

Katesha Schemerhorn, left, student records specialist, writes down information for Corinne Lawyer Thursday at NorthWest Arkansas Community College in Bentonville. Lawyer was trying to get back into an online psychology course. In December, the state released a report comparing NWACC’s finances to other two-year colleges.
Katesha Schemerhorn, left, student records specialist, writes down information for Corinne Lawyer Thursday at NorthWest Arkansas Community College in Bentonville. Lawyer was trying to get back into an online psychology course. In December, the state released a report comparing NWACC’s finances to other two-year colleges.

— NorthWest Arkansas Community College spent more of its fund balance than all of the other 21 state-run community colleges combined in the last fiscal year, according to state Department of Higher Education figures.

The school spent $1.4 million more than the $39,159,691 in revenue it brought in during fiscal 2012, according to state figures.

The college also has the highest salaries, tuition and fees along with the lowest graduation rate compared to other two-year colleges in the state.

A statement released by college administrators said the school started fiscal 2013 with $5.8 million in its fund balance.

“This represents funds that the college has available prior to the collection of tuition and fees,” according to the release. “While the college is in the business of educating students and not acquiring a large budget surplus, NWACC has been fortunate in that our Board of Trustees has maintained an annual Board of Trustees Reserve.”

Brandi Hinkle, spokeswoman for the Arkansas Department of Higher Education, said it’s not unusual for an institution to use carryover money for expenditures.

“Maybe they had higher enrollment in a particular program or lower enrollment,” Henkle said. “It is sound fiscal stewardship to keep money aside for things that are unusual or one-time costs. We don’t recommend that they use carryover money for their regular operating expenses.”

Colleges are encouraged to cut budgets if spending money from a fund balance becomes a regular occurrence. However, she said the state doesn’t see a problem with using it on a case-by-case basis.

Salaries at the college also are higher than other two-year-colleges in the state, according to information in the report released at the end of December.

Two-year college salaries more than $100,000 must be reported to the Higher Education Department. NorthWest Arkansas Community College spent more than any other college on salaries higher than $100,000 with its total at $799,668. The average in the state is $341,670. Mid-South Community College in West Memphis followed NWACC with $674,130.

Steven Hinds, executive director for public relations and marketing at NWACC, said in the release the college must compete with the region for salaries.

“While NWACC is sometimes criticized for the salaries it pays to its college administrators, we believe that we have to look at the full context of the market in which we operate,” Hinds said. “Our market includes many Fortune 500 companies and the state’s flagship university. The business community in Northwest Arkansas helps drive the salaries that people expect for certain positions and responsibilities. In order to have a high level of talent serving our students, faculty and staff and to keep many individuals who could be paid more elsewhere, it is critical that we pay competitive salaries.”

President Becky Paneitz’ salary is one of the salaries higher than $100,000. She makes $315,739 annually with benefits. The college’s foundation pays $87,408 worth of benefits included in that amount. Paneitz is the highest paid two-year-college president or chancellor when the private money is included in her salary. She is the third highest paid when private money is removed from the president and chancellor salaries statewide.

The statement released by the college states it is “quite common” for four-year college foundations to compensate coaches and administrators.

“We understand that it is not that common in two-year colleges,” according to the release. “While this has been communicated many times in the past, we wanted to explain the primary component of her compensation package that gives the impression that Dr. Paneitz is paid significantly more than other two-year-college presidents.”

Eleven other two-year college presidents or chancellors have a portion of their compensation package paid for through private money, according to information in the state report.

NorthWest Arkansas Community College also has the highest in-state tuition and fees with the lowest graduation rate compared to other two-year colleges. NorthWest Arkansas Community College serves 8,428 credit students and 6,701 noncredit students.

The state report shows students spend $4,348 on tuition and fees at the college if they take 15 credit hours. The average for two-year-colleges in the state is $2,944. Southern Arkansas University Technical has the second highest tuition with $3,630.

The college’s release states a shortage of state money has left the burden on tuition and fees.

“Some institutions are actually funded at 100 percent of their need,” according to the release. “In 2011-12, NWACC received 49.4 percent ($10,740,200) of its formula determined need of $22,081,425. The difference must be made up through our millage, tuition and fees or private donations.”

The colleges’ graduation rate is the lowest with 10.2 percent of first-time, full-time, degree-seeking students graduating with a certificate or associate degree in 2011. The students are a part of a 668 cohort that began classes at the school in 2009.

Sen. Jim Hendren, R-Gravette, said the college isn’t receiving the same amount of money as other two-year colleges in the state.

“They have a legitimate complaint,” Hendren said. “NWACC is coming up at the short end of the stick.”

Hendren said, however, higher education institutions in the state have to figure out how to be more efficient to keep education affordable for students.

“It is hard to come and argue for more money,” Hendren said about the college while referring to the salary amounts, tuition costs and graduate rate. “Perhaps they are not as efficient as some of the colleges.”

The college’s transfer rate also is below average at 8.4 percent. The average in the state is 9.7 percent.

NWACC does, however, have the highest retention rate at 34 percent. The average is 22 percent.

Rep. Debra Hobbs, R-Rogers, said she has spoke with college officials about the schools graduation rate. She said the number only takes into account 668 first-time full-time degree seeking students. It fails to track more than 19,000 students who attend the college. Some of those students may be taking non-credit courses that help prepare them for the workforce, she said.

“The purpose of NWACC is to get people into the workforce,” Hobbs said. “I think for that purpose they do a good job.”

Sen. Bart Hester, R-Bentonville, said he is concerned about the college’s graduation rate and is interested in asking the college more about it.

“Northwest Arkansas’ cost of living is higher here than other parts of the state,” Hester said. “It doesn’t surprise me that our tuition is the highest or that our staff is the highest paid, but we are in an area of the state where we demand excellence. What does alarm me is our students’ graduation rate.”

Rep. Duncan Baird, R-Lowell, is House chairman of the Joint Budget Committee. He said it’s very difficult to interpret statistics.

“I think we have a long way to go in measuring success in our higher education institutions,” Baird said. “Everything that I have seen from NWACC is very good.”

Baird said the college is a unique institution because of rapid growth it has seen in the past 10 years. It is also one of the largest two-year colleges in the state.

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