COLUMBIA - The president of South Carolina State University asked lawmakers Wednesday for $13.6 million to pay bills that began piling up in October, but it remains unclear whether they'll provide the cash and what happens if they don't.
President Thomas Elzey sought a direct payment, saying that would eliminate the university's deficit and start next school year "with a clean sheet of paper." But a loan would at least solve the immediate cash flow crisis, he told the Budget and Control Board.
The state's only public historically black college needs cash by April to pay vendors that are threatening to cut off services. Examples of unpaid bills include food service, landscaping, and maintenance on dorm washing machines and copiers. Also, the college bookstore is starting to withhold services, Elzey said.
He pledged that the university will have a balanced budget next school year. That relies on enrollment rising to 3,700 students this fall, about 240 more than started last fall and 560 more than currently attend. Yet, S.C. State's fiscal woes stem from enrollment dropping by nearly 1,800 students since fall 2008.
Elzey said applications are already 50 percent higher than at this time last year. He was vague about the consequences of not meeting enrollment targets and not receiving the requested cash.
"It will require either a resizing of the university or evaluating other options," he said, declining to specify them. "If we don't receive the money, we will have to talk to vendors. It comes down to people wanting to get paid and our students wanting to receive services."
Elzey, formerly The Citadel's vice president for finance, said when he took the helm of S.C. State last June he realized cash flow would be a problem, since the school borrowed money in 2013-14 to pay bills, but existing staff wasn't capable of determining the extent.
"It was almost shameful when I walked in the door," he said, adding that he's rebuilt the administrative offices. "I found out massive amounts of things were kept under the table. We continue to peel it back and find out additional things."
S.C. State's accreditation also is in jeopardy, as the Southern Association of Colleges and Schools put the university on warning last summer, due to its financial instability and governance issues. The university must respond to the accrediting body by mid-March, Elzey said.
The five-member Budget and Control Board, chaired by Gov. Nikki Haley, took no action. Its options are limited. The Legislature would have to approve a direct payment from state coffers, and any designation in the 2014-15 budget - which is up for debate next week on the House floor - wouldn't come until after July 1. That would appear to be too late to address S.C. State's immediate needs.
House Ways and Means Chairman Brian White, also a board member, said he's waiting for a report from budget staff, who began meeting with S.C. State administrators after the university submitted a deficit recovery plan to the board last month. White wants a breakdown in how much the university needs and an exact date for when services would otherwise end.
White said he's willing to help out of concern for the students, but he's uncomfortable with a direct payment. The solution needs to come with assurances things will be done differently, he said.
"As a state, we need to guarantee them they can get their education, because that's not fair. If we don't do anything, you're in some dire straits. That's what I worry about," said White, R-Anderson. "The question is more, how will it be done?"
Haley said she's awaiting a report on S.C. State from the state inspector general, expected in the next few weeks, which she hopes details the history of what went wrong and provides recommendations.
"We can't paint over it and say, 'If we get this money, it will fix everything,"' she said. "We've got to make some real reforms in the school. If we do that, I think it will shine."
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