Paine could get additional year to fix financial problems

Paine College could have an additional year to get its financial house in order if it does not come into compliance with its accrediting body by the end of its 12-month warning period, the accreditation association’s president said Friday.

Belle Wheelan, the president of the Southern Association of Colleges and Schools’ Commission on Colleges, said that sanctions are used as a tool to push schools to correct their mismanagement but that revoking a school’s accreditation is not the first choice.

“It’s not a good thing to have a sanction hanging over your head as an institution, so we want them to clean it up as quickly as they can,” Wheelan said, adding that schools cannot be out of compliance for more than two years. “We’re not trying to put people out of business; we’re trying to make them better.”

Paine received a 12-month warning sanction Thursday from the association for breaking various compliance standards dealing with management and stability of finances.

Losing accreditation can have devastating consequences for schools, said Jan Wheeler, the University of Georgia associate director for accreditation in the office of academic planning.

Without accreditation, schools are not eligible for federal money, which means students don’t have access to financial aid, Wheeler said.

Ninety percent of students at Paine currently receive federal assistance. If a high percentage of students rely on federal money, it would be difficult to keep students at an unaccredited school and enrollment could plummet, Wheelan said.

If schools remain open and keep students, those students who graduate from an unaccredited college often aren’t eligible for most graduate schools and their degrees might not be recognized by employers, Wheelan said.

In the past 15 years, Wheelan said, 28 of the association’s 800 members have lost accreditation for things from financial mismanagement to institutional ineffectiveness.

Among those institutions was Morris Brown College in Atlanta, which was put on probation in 2001 for bad bookkeeping and faculty issues and lost accreditation the next year.

Morris Brown was more than $23 million in debt, and a federal indictment showed that the school applied for and obtained federal money on behalf of students who didn’t attend the school, according to a Washington Post article.

Then-President Delores Cross, who later pleaded guilty to embezzlement charges, used the federal money to pay overdue bills at the cash-strapped school.

In April, Paine board of trustees member Wayne Kendall wrote a memo to his colleagues alleging the school used almost $2 million in payments from the U.S. Department of Education to pay overdue bills and payroll. The federal money was intended for student financial aid, Kendall said.

Paine also did not change student enrollment statuses or return unused aid after the students withdrew in 2010-11, according to a financial audit completed March 22 by Augusta accounting firm Cherry, Bakeart and Holland.

After its loss of accreditation and increasing debt, enrollment at Morris Brown dropped from more than 2,000 at one point to about 120 in 2009.

Marybeth Gasman, a professor of higher education at the University of Pennsylvania and an expert on historically black colleges, said it’s not common for schools to lose accreditation.

The losses of accreditation have occurred disproportionately at historically black colleges, Gasman said, partly because those schools also often have inadequate resources.

“It is often hard to meet all of the SACS requirements when under-resourced,” Gasman said in an e-mail Friday. “That’s not an excuse for poor financial management and poor leadership, but it provides some context.”

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