The state Budget and Control Board voted Wednesday to give $6 million to SC State University, on the condition that the school give the Governor’s Office and legislators more of a controlling hand in its finances.
The college is seeking help with a shortfall of $13.6 million after it stopped misusing specially designated funds to pay its operating costs and other expenses.
Gov. Nikki Haley set conditions for SC State to get its financial house in order in order to receive the loan. But she met tough opposition to her plan from fellow Budget and Control Board member, Senate Finance Chairman Hugh Leatherman, R-Florence.
He pushed instead for the help of a five-member team of former college presidents and presidents of public universities in the state: former College of Charleston president Alex Sanders; former Clemson president James Barker, current president of Francis Marion University Fred Carter, current USC president Harris Pastides; and Judge Ernest Finney, who acted as a one-year interim president of SC State in 2002.
He called Haley’s plan a Band-Aid, “fraught with pitfalls.”
“I can’t go there, because all we are doing is buying enough time, in my opinion, to get us into the next fiscal year,” he said during Wednesday’s meeting. “We’ll be right back where we are.”
State Comptroller General Richard Eckstrom sided with Leatherman’s solution of giving other colleges input in how to fix SC State’s financial problems.
Eckstrom said much of the school’s debt is due to students being unable to pay back student loans. At one point, Eckstrom elicited a loud groan from SC State supporters and others in the room by saying,”These are kids that are going there because they can’t get into these other schools.”
Haley defended her plan to have accountants and consultants work with the college’s administration to correct problems.
“You can all this a Band Aid or not, this is the matter of fact of are they going to get their accreditation,” Haley shot back. “We won’t be able to recover if they lose their accreditation… and we are asking for accountability in return.”
Haley said that a large part of the loan will be to pay vendors, including Sodexo food services to provide meals that she says students have already paid for.
This loan also gives Haley and state lawmakers more leverage to require the university to report its financial dealings and record-keeping. The school’s foundations must provide the Budget and Control Board with three years of audited financial statements.
Along with SC State adopting an anti-nepotism policy, the school’s foundations must show records of transactions between university officials and their immediate family members.
In an editorial published Wednesday morning, Gov. Haley foreshadowed: “The loan I will propose today is not a silver bullet. S.C. State’s board of trustees must play a central role in developing an all-encompassing solution, and they must do so working with state officials and the local, alumni and university communities. Ultimately, the General Assembly must act through the budget process to supply S.C. State with the resources — and the oversight — it needs in order to once again focus on its core mission. In the meantime, my proposal is designed to give S.C. State’s new leadership time to develop a plan for the university not just to survive, but to thrive.”