It's a tangled web, for sure.
In his first year as South Carolina State University president, Thomas Elzey performed satisfactorily, according to the school's board of trustees. He did so despite inheriting a financial and management rat's nest. As specified in his contract, that rating earned him a $50,000 bonus.
But here's the rub: The bonus came from the S.C. State-related Advancement Foundation, which the state inspector general's office recently said exists on money that it should not have received.
SCSU has some large contracts that include "rebates" to the school. S.C. State has funneled some of that money to the Advancement Foundation and the SCSU Foundation, which have assumed authority to spend it.
The IG says that's not right, and has recommended that the Advancement Foundation, and the SCSU Foundation, return to the university "all existing cash, investments, or assets" that they shouldn't have been given by the school.
The confusion can only be intensified by the fact that a president who takes home $300,000 is paid $50,000 more from this fuzzy entity when the university is so much in debt that it went to the Legislature to ask for $13 million (it got a $6 million loan instead).
Even Mr. Elzey's pay could be complicated by the inspector general's report. He receives $172,000 directly from the school and $132,000 from the Advancement Foundation.
Other than pay, things funded through the two foundations include student scholarships, country club memberships, flowers and travel consultants.
It would be good news if the foundations prove able and willing to pay back the $2.3 million they have received in recent years. The university could use the money to help make ends meet.
President Elzey recently told the Charleston County Legislative Delegation about the school's financial woes. The bad news is that the inspector general's report creates further doubt about a school struggling to demonstrate to the public that it can and will straighten up the financial and management mess that has led to the school's accreditation being in jeopardy.
By giving public money to a foundation, S.C. State has forfeited control of it. Disbursements have not been transparent and did not have to go through a normal bidding process. The study concludes that students each paid an additional $343 a year for their meal plans because of rebate agreements.
Apparently it is not unusual for vendors to agree to make large payments to universities as part of their contracts. But that money then belongs to the school.
The last thing the university needs is even a perception of continuing fiscal laxity, given the university's prior mismanagement.
The problems of past leaders continue to bedevil the school's image, as a former trustee was found guilty last week of multiple charges related to a kickback scheme at S.C. State. Last year, a former trustee pleaded guilty to bank fraud and conspiracy, and the school's former police chief pleaded guilty to conspiracy.
S.C. State provided this statement following the release of the inspector general's report: "We concur ... that such practices at statewide institutions of higher learning may create a perception that total transparency is lacking. Moving forward, the university will apply best practices to enhance transparency and accountability."
That's the right attitude, but this is only one of many problems that must be corrected fully - and quickly.
The state's taxpayers and the school's students deserve nothing less.
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