The flow of federal money to Arkansas Baptist College has been "delayed," the college's interim president confirmed Monday, days after he sent an email to faculty and staff warning that the school may not be able to issue paychecks on time.
Arkansas Baptist, a private, historically black college in Little Rock, relies heavily on U.S. Department of Education funding to make ends meet, specifically financial aid such as Pell grants and federal student loans.
College officials for years have blamed cash-flow issues on an Education Department sanction that requires them to obtain reimbursement for allocated financial aid money rather than receiving it on the front end. The school has on multiple occasions struggled to pay staff members on time, including at least twice last year.
Officials on Monday did not make clear whether this delay is a result of the sanction or because of other issues.
Interim President Howard Gibson said in a brief emailed statement that the issue stems from U.S. Education Department money that predated his administration, which began in December. The school is in contact with the U.S. Treasury Department, he added.
Gibson did not respond when asked about whether the college paid its employees on time.
Paychecks are typically distributed on the last working day of the month, which was Monday, said Kenneth Harris, chairman of the college's board of trustees. Harris, in a telephone interview shortly before 5 p.m. Monday, said officials were still working to identify another source of money to pay employees.
"We're making every attempt possible to try to do that, certainly," Harris said. "We're trying to pursue other avenues to try to make sure that we can pay them," such as a short-term loan, a line of credit or other alternatives.
Harris referred questions specific to the underlying funding problem to Gibson, saying he was unfamiliar with the "intricate aspects."
"We don't have the reserves and all of that that many institutions have and carry over," Harris said. "We just don't have that. So, consequently, if we run into a problem like this, we just don't have anything to fall back on, that we can pull from, in order to avoid a situation like this. We're hoping to get there, but at this point, we're not there."
Gibson, who did not return a phone message left at his office or respond to emailed follow-up questions, said the issue involves Title III and Title IV money but did not elaborate. Title IV money is student financial aid reimbursement. Title III funds are federal grants meant to establish or improve academics, facilities and endowments.
"The current funding delay is due to an issue unresolved previous to this administration and has just come to our attention," Gibson said in his statement. "We have been in contact with our designated representatives within the U.S. Department of Treasury who have assured us they are working to resolve the issue as soon as possible."
An Education Department spokesman did not respond to questions.
On Friday afternoon, Gibson advised the college's faculty and staff that "April's payroll may be late," according to an email obtained by the Arkansas Democrat-Gazette.
"At this time, the College has received official communication from the Department of Treasury stating that Arkansas Baptist College's federal account access has been delayed," he wrote. "In an attempt to make payroll by Monday, we are trying to secure funding from another source. I will keep you informed as information is received."
Gibson assumed leadership of Arkansas Baptist on Dec. 19, days after former President Joseph Jones departed the college. Jones served as president for 15 months after replacing long-time chief Fitz Hill, who resigned in 2016.
Jones said at the time that he had resigned, and Harris said Jones was fired. Harris has said the board would try to fill the presidency by July 1.
Arkansas Baptist, 134 years old and located on Dr. Martin Luther King Jr. Drive in Little Rock, is among the state's oldest post-secondary schools. It is the only Baptist-affiliated, historically black college located west of the Mississippi River.
Fall enrollment has plummeted over the span of several years, from a 10-year peak of 1,193 in 2011 to a low of 575 last fall, according to Arkansas Department of Higher Education data.
Arkansas Baptist held its 2018 graduation ceremony over the weekend.
Some of the college's financial troubles have been traced to 2013, when the federal Education Department placed the college on "heightened cash monitoring" after "severe findings" were noted during an audit. In other cases, officials have cited plunging enrollment.
The cash-monitoring designation -- applied to federal financial aid such as Pell grants and student loans -- restricts cash flow because sanctioned schools must seek reimbursement of money rather than receive it in advance.
Of 69 schools that have the same restriction as Arkansas Baptist, 13 are U.S.-based private, nonprofit colleges, according to the Education Department.
Financial woes also triggered a run-in between Arkansas Baptist and its accrediting agency, the Higher Learning Commission.
Student and staff complaints in 2014 prompted an investigation by the commission, which later ordered the college to show why its accreditation should not be stripped amid financial insecurity.
Although it maintained its accreditation as part of a November 2016 decision, Arkansas Baptist is undergoing a follow-up review to see whether it is making the improvements it promised. The commission also cited ongoing concerns with the quality of education programs, how the school assesses student learning and how much attention it pays to retention and graduation rates.
A Section on 05/01/2018