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South Carolina State University Seeks Hand Out of $13M Hole

S.C. State University President Thomas Elzey told Diverse last December that he anticipated a $3M deficit for the fiscal year ending June 30.S.C. State University President Thomas Elzey told Diverse last December that he anticipated a $3M deficit for the fiscal year ending June 30.South Carolina State University, plagued by turmoil of one kind or another for the last half decade, is asking the state for millions of dollars to help it avert a $13 million deficit this fiscal year ending June 30.

Meanwhile, new university President Thomas Elzey, who has pledged transparency as a hallmark of his leadership, and James Openshaw, the university’s new chief financial officer, have indicated in communications this month with state legislators and an interview with the Orangeburg (S.C.) Times and Democrat, that belt tightening will be expanded and that further means to cut expenses are on the table.

“The university plans to meet its payroll through June, 2014,” Elzey told the Times and Democrat, according to a transcript of the interview. “Payments for utilities and other vendors/contractors will be delayed significantly.”

Elzey, who took the helm of SCSU last summer after a stint as chief financial officer at The Citadel, said the university “will continue its hiring freeze, possibly reduce some temporary positions, reduce discretionary funding, eliminate low producing programs, increase enrollment and increase and enhance our fundraising efforts.”

Among money losing programs set to be seriously reviewed is the university’s athletic program, said several people associated with the university. Like those at many institutions, including most at historically Black colleges and universities (HBCUs), the SCSU athletic program is operating at a loss. It is expected to cost more than $9 million dollars next year and bring in only about $2.9 million.

Elzey said in a December interview with Diverse that he expected a deficit of $3 million for the current year ending June 30, based on what he had learned about the university’s financial condition since coming on board.

That deficit estimate largely reflected the impact of the loss of hundreds of students because their families had lost access to federal Parent PLUS Program loans due to a tightening of loan rules.

The revision to a higher deficit number reflects the ability of Openshaw, who joined Elzey from The Citadel, and the university’s new finance team, to dig further into the institution’s finances.

The release of the higher deficit estimate and the financial distress call to the state is widely said to have prompted disclosure earlier this month that the South Carolina Inspector General has started an investigation into the university. The Inspector General is responsible for examining fraud, waste and abuse.

The gloomy news comes as SCSU is preparing to hold five days of events starting next Wednesday celebrating the inauguration of Elzey. He is the fifth chief executive of the university (third permanent president) in six years.

The inauguration events include a “S.C. State Day” program at the State House in Columbia, a community and business leaders’ luncheon, a First Lady’s Luncheon, golf outing with the president and a scholarship gala.

Celebration of the events surrounding the inauguration likely will be short lived, however.

Lawmakers have demanded a plan from the university of how it proposes to deal with the expected deficit. The new disclosures are also likely to intensify concerns about the university from the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC).

Last June, just days before Elzey officially began his work, SACSCOC placed the university on warning status, citing a shopping list of concerns stemming from a Special Report raising questions about the university’s finances and administration. SACSCOC gave the university until June, 2014, to address its concerns or face more punitive actions

SACSCOC is the higher education accrediting agency that the federal government relies upon to determine whether an institution merits receipt of federal funds, including student aid. By latest report, some 90 percent of SCSU’s students require financial aid to attend college. Most of them need some type of federal aid.

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