State lawmakers will subpoena for a hearing next month the officials who led Henderson State University as it spiraled into financial distress.
The Legislative Joint Auditing Committee voted Friday to issue the subpoenas -- a rare move -- to former Henderson State President Glen Jones Jr.; Brett Powell, the former vice president of finance and administration; and the university's board of trustees chairman, Johnny Hudson.
The decision came after the committee reviewed an audit of the Arkadelphia university's finances and grew frustrated that no one was there to answer questions about what went wrong.
Powell and Jones resigned their administrative positions last year as the school operated under a $4.9 million deficit with ballooning debt.
In October, HSU -- the only public liberal arts university in Arkansas -- approved a merger with the Arkansas State University System in hopes that the move would put the school on firmer financial footing.
ASU System officials attended Friday's meeting to attempt to answer the committee's questions, but they weren't able to satisfy all lawmakers' questions because they weren't involved at Henderson State as financial problems developed.
"People at Henderson created this mess and just walked away without any accountability," Rep. Julie Mayberry, R-Hensley, said after the meeting. Mayberry made the motion to issue the subpoenas.
An Auditing Committee co-chairman, Rep. Richard Womack, R-Arkadelphia, said Jones wasn't formally asked to attend Friday's meeting, but Womack said he was "very surprised" Jones didn't attend. Womack's district includes Henderson State's campus.
Womack said Friday that it's very rare for the committee to issue a subpoena, but it's hoped that it would "force them to the table and let's get this over with."
Jones didn't return email and phone messages left Friday afternoon. He resigned his presidency in July, but the school continued paying his $19,208 monthly salary through the end of December, under the terms of a separation agreement. The school's private foundation will continue paying the salary through July.
Also under the agreement, Jones was granted sabbatical leave for the fall 2019 and spring 2020 semesters, and he will have the option of retaining his appointment as a tenured accounting professor. If he returns for the fall semester, his salary will be cut to a level commensurate with his position in the business school.
Jones was allowed to remain in Newberry House, where the university' president traditionally lives, until Jan. 15, under the agreement.
The acting president is Elaine Martin Kneebone, who is the university's general counsel.
Powell also didn't return a phone message on Friday afternoon. He is now the assistant vice president and controller at Baylor University in Waco, Texas, according to Baylor's website.
A subpoena issued to Powell wouldn't carry the same legal weight and ramifications because he now lives in another state, Womack said.
"But it still sends a message," he said.
About $4 million of the school's $4.9 million shortfall last fiscal year was comprised of outstanding student debt. Friday's audit report faulted the university for a lack of diligence in collecting those debts while allowing students with outstanding balances to continue enrolling in classes.
Before the vote to merge with the ASU System, Henderson State drew a $6 million advance loan to cover last year's deficit and other needs. The loan terms required it to be repaid this year, but ASU officials told lawmakers Friday that wouldn't be possible. They said that negotiations are underway with the executive branch on an extension that must ultimately go before the General Assembly for approval.
The university also is seeking a line of credit of up to $3 million, though officials have acknowledged that finding such a credit line will be difficult.
The feasibility of a $3 million line of credit will be discussed next Friday at a meeting of the Arkansas Higher Education Coordinating Board.
Last year, the university's board of trustees cut more than $3 million from this year's budget, largely through pay cuts for about 75% of the school's employees.
Despite the financial struggles, Henderson State's enrollment actually grew in the fall, reaching 4,054 students.
Henderson State likely won't be formally absorbed by the ASU System until January 2021, said ASU System President Chuck Welch, but the school and system are working closely together under a memorandum of understanding.
Once under the ASU System's umbrella, Henderson State will maintain its name and mascot, the "Reddie." The school was founded in 1890 as a private Methodist college, and it became Henderson State University in 1975.
Welch told legislators Friday that the ASU System had implemented several new oversight controls, and it hired a third-party forensic auditor to ensure all problems had been uncovered.
"I want to be very frank: this is not going to be fixed this year," Welch said.
"This is not going to be fixed next year. But certainly, we're moving in the right directions. We feel good about the things that are happening."
A Section on 01/25/2020