Paine working to resolve financial woes

Misuse of funds led to scrutiny at small college
Paine College faced scrutiny for misuse of student aid funds.

EDITOR’S NOTE: This is the seventh installment of a 10-part series on the top stories of 2012.

The year 2012 was a time of readjustments and scrutiny for Paine College.

In March a financial audit showed that school administrators mismanaged student financial aid and incorrectly reported enrollment numbers to the federal government. Throughout the year, dozens of students complained that financial aid checks had bounced, and documents from Board of Trustee meetings showed the school was facing millions in revenue shortfall through the summer.

President George Bradley responded in April by saying Paine officials “promptly put in place financial responsibility measures” and terminated the personnel responsible for the mismanagement as soon as the school became aware of problems in September 2011.

However, as the year continued, more financial problems were revealed.

In an April memo to the Paine Board of Trustees, former trustee Wayne Kendall stated that federal money intended for students was used instead to pay the school’s payroll and past-due bills in December and January.

The school received an $800,000 payment from the U.S. Department of Educa­tion in December 2011, a portion of which was to be refunded to students, but the funds “were used entirely to pay payroll,” according to Kendall’s memo.

By the end of 2011, the memo states, Paine owed students about $1.2 million in student aid that had not been given out.

The school received another federal drawdown of $1 million in January, but instead of giving refunds to students, as required by federal regulations, officials used most of it to pay bills that were 60 days past due, according to the memo.

In June the accrediting body for colleges in the Southeast, the Southern Association of Colleges and Schools’ Commission on Colleges, placed Paine on warning and gave the school 12 months to correct the financial mismanagement.

Paine was in violation of six compliance standards related to financial resources, the quality of administrative and academic officers, financial stability, control of finances, sponsored research and external funds, and the control of financial aid programs, said Belle Wheelan, the president of the accrediting organization.

Bradley said at the time that he did not view the warning as a punishment, but an opportunity to improve.

Paine has until June to comply with the accrediting body, and officials closed the year with an announcement that hinted at growth and hope.

In October, Paine announced plans to revive a football team after a 50-year absence.

The start-up cost for a similar football venture at LeMoyne-Owen, a private school and one of Paine’s division rivals, was reported to be $1.5 million with operating costs of $500,000 a year.

However, officials at the historic black college said the program will be possible with increased enrollment and community support.

In 2013, the school will also unveil the completed Health Education Activities Learning Complex with a 2,100-seat arena as part of one of several planned advancements.

Paine supporters say the college is too important to lose
Paine could get additional year to fix financial problems
Paine given a year to correct financial mismanagement
Paine grads hear message of mission
Paine trustee's memo claims federal money meant for students used to pay bills, payroll
Paine facing millions in revenue shortfall, documents say
Audit uncovers financial mismanagement at Paine College
Federal official answers questions about health care law at Paine College
Paine College students protest financial aid problems, condition of dorms

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