Grambling to be shutdown?
07/25/2002 07:24 AM EDT
By Brett Martel
Associated Press
GRAMBLING, La. (AP) - Black and gold banners proclaiming ``100 Years of Excellence'' remain on lamp posts throughout the Grambling State University campus a year after the historically black school's centennial.
Such symbols of longevity seem to be needed reassurance at a time when the institution is struggling to overcome an episode of accounting incompetence so drawn out it now threatens to close the school.
``Sometimes I wake up at night, shaking, wondering, what if?'' says Helen Richards-Smith, dean of the university's honors college and a Grambling faculty member for most years since she graduated from here in 1944.
The campus of red bricks and white columns amid the piney hills of north Louisiana, founded by an association of black farmers in 1901, has been unable to provide financial statements deemed acceptable for a state audit since 1997. Such an audit is generally required in three consecutive years for reaccreditation, a process that occurs every 10 years and is now about two years past due at Grambling.
The Southern Association of Colleges and Schools, an Atlanta-based national accrediting group, has placed Grambling on probation and has set a Sept. 16 deadline for an approved audit for the past two academic years.
If Grambling loses its accreditation, it will also lose federal funding including financial aid for its students - 90 percent of whom now receive this aid. If unaccredited, Grambling's degrees would lose value with graduate school admissions offices and professional licensing boards.
``We'd be out of business,'' says David Wright, a Grambling graduate who sits on the Louisiana university system's board of supervisors, which oversees the school. ``All over the country it would be a terrific blow because we have a lot alumni and friends of Grambling.''
Grambling is to black America as Notre Dame is to Roman Catholic America in the fierce loyalty it inspires among alumni and countless boosters, including many who've never set foot on campus.
In football, Grambling became synonymous with success under now-retired coaching icon Eddie Robinson.
The Grambling marching band's high-energy performances having included Super Bowl halftime shows and inaugurations of African presidents.
Grambling graduates hold management jobs at companies like Ford, Gannett, Cisco and Apple.
These accomplishments come despite the fact that many students are the first in their families to go to college and that many incoming students need remedial help. There is no minimum admission standard except a high school diploma.
The school's motto is: ``The place where everybody is somebody.''
The accounting mess - the latest in a series of financial problems including thefts and improper spending - has made it a place where everybody is anxious.
``None of my friends have left, but we were all talking about it,'' says Tamika Noble, 21, a senior studying sociology.
Still, she's certain the school has much support. ``They're not going to let Grambling close down.''
Reshawn Thomas, 20, a senior marketing major and Student Government Association treasurer who comes from a long line of Grambling graduates, says the looming accreditation question is ``everybody's top concern.''
State Legislative Auditor Dan Kyle has doubled the auditing staff he originally dispatched to help the school meet the deadline.
``They have an enormous task. Whether they can do it I cannot predict,'' Kyle says.
Describing the bad bookkeeping, Kyle says, ``It's like saying for accounts receivable, 'several different people owe me $10,000 combined, but I don't know who they are or how much each one owes.'''
Grambling officials acknowledge the accounting staff in recent years was undertrained. But the root of the problem, many say, was instability at the top. After having only three presidents in its first 90 years, Grambling is now on its sixth president since 1991. It has had seven vice presidents of finance since 1993.
Grambling has been ``fought over like a fiefdom by politically connected blacks,'' said Rick Gallot, a black state representative and a Grambling graduate.
His mother, Mildred Gallot, also a Grambling graduate and longtime history professor, adds that recent presidents ``seemed to have the attitude: 'I need my people in place _ people loyal to me.'''
One example was Steve Favors, a former Howard University administrator appointed Grambling's president in 1998.
Melvin Davis, Grambling's chief financial officer when the school received its last approved audit in 1997, said he felt alienated by Favors and took a better-paying job in 1999. Davis says he offered to help Grambling close its books for 1998 and 1999 anyway, so the school would be ready for its regularly scheduled re-accreditation in 2000. He was rebuffed.
Favors hired a new CFO, but he backed out before his first day of work and instead took a job in Florida.
A Grambling spokeswoman said requests for interviews with Favors, who remains on the faculty, had to go through her. The request was made and Favors did not respond.
After Favors was forced out in January 2001, the board appointed as acting president Neari Warner, a Grambling insider who was accomplished in academic affairs but lacked experience with certain administrative and financial matters.
``It made me wonder if they were setting her up for failure,'' Rep. Gallot said.
System president Sally Clausen said Warner accepted the job on an interim basis and so far has shown determination to take tough measures, including the firing of 126 employees, mostly administrative.
``The end result is that the legislative auditor now believes the right people are in place,'' Clausen said.
Last summer, Warner brought in Billy Owens, a former top financial officer with Jesse Jackson's Rainbow/PUSH Coalition, as Grambling's new CFO, its first since Davis in 1999.
As to meeting the deadline, Owens said, ``What appeared to many one year ago as an impossibility now looks like a very real possibility.''
Warner also remains positive.
``I see these difficult situations as launching pads to higher standards of accountability and productivity,'' Warner said in a written response to questions from The Associated Press.
Grambling does not appear to have cash flow problems, say officials with the Louisiana Board of Regents, which oversees all state universities. Grambling receives about 20 percent more in state funding per student than the average for Louisiana's four-year campuses, in part because of a civil rights settlement that required the state to compensate for years of spending more on predominantly white than historically black colleges.
But the current crisis is only the latest in a series of financial embarrassments since 1993, when Kyle refused to express an opinion on the accuracy of Grambling's financial statements.
Kyle again deemed Grambling's financial statements unacceptable in 1994 and a year later came the accreditation group's warning.
A 1996 legislative audit reported a variety of irregularities, including:
$343,000 in uncollected debts;
thefts of computers and air conditioners worth $51,000;
$10,500 in scholarships given to unqualified high school graduates.
Trustees soon forced university president Raymond Hicks to resign. He left the school with a $3 million deficit, which officials said was caused largely by overestimating enrollment.
Enrollment dropped sharply - from 7,833 in fall 1993 to about 4,500 now - but officials say factors other than financial woes were the main cause. Most important, they say, were an effort to set higher admission standards, which has since been dropped, and
higher tuition for out-of-state students, which has been retained. Also, U.S. Rep. William
Jefferson, D-La., was paid $50,000 by Grambling to teach a class for Grambling credit in New Orleans which enrolled one student.
Then there was the transfer of public money - about $1.6 million - to the Grambling Foundation, the university's now-bankrupt private fund-raising arm.
Favors, the former Grambling president, has said the university trusted that the money it transferred to the foundation would be spent to benefit the school but had no control over it. Favors blamed problems on a foundation administrator from 1997 to 1999.
Kyle, the state audit chief, found that money meant for scholarships was instead spent on administrative costs and on the startup and operation of a short-lived sports bar. More than $1 million the foundation received from the annual Bayou Classic football game went to expenses, such as hotel rooms, receptions and limousine services.
Grambling's proceeds from the game were transferred to the foundation, which Kyle concluded failed to keep credible financial records and displayed ``a lack of integrity.'' No charges have been filed.
``Everybody wants to see Grambling become more accountable,'' says Herbert Simmons, director of alumni development. He termed the latest financial crisis ``a wakeup call.''
Simmons' bond to Grambling is strong. Raised by a grandmother who couldn't read or write, Simmons came to the school on a band scholarship and went on to become a lawyer.
The loss of Grambling ``would be unthinkable to me,'' he says. ``For 100 years we've been taking nobodys and turning them into somebodys ... Where would we be as a nation without Grambling?''
On the Net:
Grambling:
http://www.gram.edu/
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I am in total chock about this. What the heezy is going on with our HBCU's? My alma mater, Kentucky State University, is being investigated by the FBI on its accounting practices as well.!!!!! 
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FBI investigates KSU spending
Probe follows ongoing audit of federal education funds
By Mark Pitsch
mpitsch@courier-journal.com
The Courier-Journal
Harry Lee Waterfield II, vice chairman of the KSU regents, said yesterday that FBI investigators were looking at travel vouchers and other university expenses.
FRANKFORT, Ky. -- The FBI is investigating spending at Kentucky State University and has asked the state auditor to assist in the probe. The investigation comes a month after the U.S. department of Education's Office of Inspector General opened an audit of KSU's use of federal education money, including funds intended to improve historically black universities.
The Education Department audit has been ongoing since June 17, three days before the KSU board of regents rescinded a three-year contract extension that had been voted the preceding November for President George Reid. The regents also placed Reid on administrative leave until June 30, when his contract expired.
Harry Lee Waterfield II, vice chairman of the KSU regents, said yesterday that the FBI was looking at travel vouchers and other university expenditures. ''I'm assuming that's on Dr. Reid,'' said Waterfield, who said he met with an FBI agent more than a month ago but wouldn't discuss the conversation.
Bill Pennell, KSU's chief financial officer, said he and several other
university employees met with FBI officials Wednesday and yesterday. He said the FBI asked to see documents that he declined to describe, but he said the investigation's focus was different from the Department of Education audit.
''What they were looking at has nothing to do with the audits that were going on or the cleanup that we have done,'' said Pennell, referring to an ongoing effort to get the university's finances in order.
Thomas Clay, Reid's lawyer, said he learned about the investigation from a reporter and that no one from the FBI or the state auditor's office contacted him or Reid. ''They should have all the look they want to'' into KSU finances, Clay said.
Reid did not respond to a request through Clay for an interview. Clay said Reid was at an undisclosed location.
As of late last night, the KSU board of regents was continuing to meet in private on a variety of topics but had not discussed the FBI investigation -- a matter that was not scheduled to be on the agenda -- in public session.
Jacqueline Bingham, KSU spokeswoman, said at least one FBI agent was on the Frankfort campus Wednesday and focused on the finance office and the president's office.
Paul Bibbins, KSU's interim president, would not comment. Bill Johnson, KSU's lawyer, and Arthur Moncrief, KSU's comptroller, also declined comment.
KSU's $47.1 million budget for the fiscal year that ended June 30, 2001, included $11.1 million in federal funding. Stephanie Robey, chief of staff for state Auditor Ed Hatchett, said yesterday that the FBI and Hatchett's office began a review of KSU records
on Wednesday.
Robey and Hatchett wouldn't reveal the nature of the investigation. Robey said she hoped the state auditor's work would be completed within a few weeks.
The FBI ''came to us a couple of weeks ago and asked us to help them, and we started our work over there yesterday,'' Robey said. ''They've asked that we do nothing more than acknowledge that there is work occurring and that we're there at their request.''
In a fiscal 1998-99 audit of KSU released in April 2001, Hatchett concluded the school's books were in such disarray that he could not determine KSU's financial health. A 1999 auditor's report found that Reid had used $300 from a $110,000 private gifts account at the university to pay for personal items, a parking ticket and a contribution to the United Way.
In May, The State Journal, a Frankfort newspaper, reported that Reid had taken 56 publicly funded out-of-state trips between January 2001 and March 2002 -- more than any other state university president and Gov. Paul Patton during the same period.
Robey said Clay Mason, a Frankfort FBI agent, is the lead investigator in the KSU probe. A call to the Frankfort FBI office was referred to an FBI spokesman in Louisville.
Patrick Bashore, a special agent in the Louisville FBI office, said
yesterday that he couldn't confirm or deny whether an investigation was under way.
Reid, hired as KSU's president in 1998, filed a lawsuit seeking unspecified damages against the university before being ousted, saying he was being punished as a whistle-blower.
In a May letter, Reid accused regents chairman Bill Wilson and Marlene Helm, a board member, of conflict of interest for also serving on the state's Committee on Equal Opportunities, which oversees higher education desegregation efforts. At meetings of the committee, Wilson and Helm do not vote on issues regarding KSU to avoid a conflict, a situation that Reid said has cost the university money.
In addition to the FBI investigation and the U.S. Department of Education audit, state lawmakers have said they want to review KSU's spending. The purpose of the Education Department audit is ''to examine institutional records; to conduct interviews; and to assure that established standards, rules, regulations and laws were followed,'' Carol Lynch, regional inspector general for audit in the Atlanta office of the department, wrote in a May 17 letter to Reid.
Grambling Closing
Linear Mode
