The new school year at North Carolina A&T State University in Greensboro began with the revelation that a state audit has uncovered close to $2 million in mismanaged funds.
The audit documents instances of fraud and mismanaged federal grants and other funds, including $380,000 in vending receipts that were diverted to a spending account for former chancellor James Renick, who stepped down last year and is now a senior vice president at the American Council on Education in Washington.
"It's really sad," said Arnita Floyd Moody, a recent North Carolina A&T graduate and 2006-07 student government president. "That money should have been used to give the support that our students need."
Chancellor Stanley Battle, who only recently took over as chancellor at A&T, warned against sensationalizing the report.
"It sells papers," said the new chancellor. "A lot of people say there's a cloud over A&T. There's no cloud over this campus. These students didn't do anything wrong; 99 percent of the faculty didn't do anything wrong."
According to University of North Carolina system policy, the vending money was supposed to be set aside for scholarships, student financial aid, reconciliation of campus debt and student activities. Instead, according to the audit, the money was spent on alumni events, travel by Renick's wife, commissions for artwork, and even a $150,000 annuity for an unnamed faculty member.
The report also found that a program manager who administered the HBCU Future Engineering Faculty Fellowship Program, a program funded by the U.S. Office of Naval Research, was to blame for "several improper business practices and expenditures" during the 2005-06 fiscal year. The expenditures included stipends in excess of $66,000 paid to the program manager's husband after he became a participant in the program. The program manager was not named.
The Future Engineering Faculty Fellowship Program is designed to increase and influence the numbers of students working toward their Ph.D.s who might be interested in teaching in engineering programs at historically black colleges.
The report's other findings included the misappropriation of $87,000 in university funds during May 2004 by the former vice chancellor for information and telecommunications, who also was unnamed in the report, and the mismanagement of federal grant funds.
Vic Hackley, who served as interim chancellor after Renick's departure, uncovered the financial irregularities last year and requested the help of UNC System President Erskine Bowles. It was then that a state audit was conducted.
The report was forwarded to the FBI, federal prosecutors, the state Bureau of Investigation and the Guilford County District Attorney's office. Copies also went to Gov. Mike Easley and the state attorney general's office.
All of the employees who were involved in the scandal have been removed from their positions, and some face criminal charges.
The report's findings could cause the school to lose power over its own budget if UNC system leaders aren't satisfied with the progress being made under the new administration.
But for some, the problem is bigger than the apparent fiscal improprieties.
"I love A&T, and I love the people. But this really points to the fact that some people didn't focus on the mission to help out African American students," said Moody.
For other students, the report's findings were blown far out of proportion.
"It's not surprising that some of the things were overblown," said Brandon Bellamy, a senior liberal studies major at A&T and a former SGA treasurer. "The amount of money that was misused was not much compared to the overall budget." For fiscal 2006 the school listed its total revenues at more than $220.4 million, against operating expenses of $204.6 million.
Bellamy said that the key to preventing things like this from happening is "better financial oversight."
Battle arrived July 1 from Coppin State University in Baltimore.
"Since I got here, this is all I've been dealing with. I've been dealing with both sides," he said, "I've got to deal with state auditors, and when you make a mistake, the door is wide open, you can't slam the door. It's got to be addressed. It's got to be cleaned up."
The new chancellor told the A&T Register, the school's campus newspaper, that although there were "major missteps," the responsibility should not fall on the shoulders of the school as a whole. He said that A&T has had a reputation of employing good people and that trend will continue.
Bowles brought in Battle in hopes that he would restore the school's integrity.
"I don't like to talk about what my plans are," Battle told the Register. "I can talk about some things we need to do, but I can't do them by myself. I can tell you that A&T will be student-focused. We are going to set good standards and we're going to be backing it up by supporting students."
Battle stressed that he was pleased with the progress that had been made and that he didn't want the actions of a few to affect the school's reputation.
"You're talking about mistakes that were made, or missteps, but it's a few people. You can't use that as a generalization against the entire university," he said.
For Moody, the concern is the effect that the scandal will have on the school's ability to educate its students.
"It really creates an untrusting environment, and a lot of confusion," she said. "Luckily, the situation was handled so well. The unethical people were removed quickly and now A&T is working on putting systems in place to make sure that things like that don't happen again."
Posted Sept. 12, 2007