S.C. State keeps accreditation, expects more cuts

As supporters celebrated news Thursday that S.C. State University would keep its accreditation, the college’s board chairman acknowledged more cuts are on the way to trim its $20 million-plus deficit.

“We’re going to have to reduce the staff. We have too many people for the budget that we have,” said trustees chairman Charlie Way, a former S.C. Commerce secretary who leads the school’s new board, appointed less than a month ago. “That’s going to be painful. But we’re trying to get this school back into excellent shape.”

Last week, that new board was told S.C. State would need to cut its budget by $35 million if its fall enrollment tumbles to 2,100 — 1,200 below the number of students on campus at the start of the 2014 school year.

Leaders have not decided what will be cut. “The budget is changing every 15 minutes,” Way said. “We have to right-size the school.”

But S.C. State will have some time to do that because it held onto its accreditation, crucial to keeping students on its 119-year-old campus. And more financial help is coming — $7 million in state money earmarked for the school.

The Southern Association of Colleges and Schools Commission on Colleges decided Thursday to give the state’s only historically black public college more time to recover after the appointment of new administrators and trustees.

The commission, known commonly as SACS, had placed S.C. State’s accreditation on a year-long probation in 2014, citing financial and governance troubles. SACS extended the probation another year Thursday.

SACS could have revoked S.C. State’s accreditation for failing to address its problems. Students at unaccredited schools cannot receive federal financial aid, which would have been a devastating blow to S.C. State, where nearly nine in every 10 students get aid.

But the upcoming year of probation will be S.C. State’s last. SACS rules do not allow schools to stay on probation for more than two years, and S.C. State’s accreditation will be reviewed again in June 2016.

S.C. State still has five financial-related problems to fix, first cited a year ago, SACS said. Accreditors removed three sanctions Thursday related to the school’s governance.

What the school must do to keep its accreditation is unclear. But Way doesn’t expect S.C. State to eliminate all of the $20 million that it owes vendors and the state by next year.

“We’re not magicians,” Way said. “We will have a debt-reduction program. We will figure out how we can meet our (financial) obligations in an orderly fashion.”

S.C. State owes $14 million in unpaid bills to vendors and at least $6 million in state loans.

The school could not keep up with its bills because it failed to cut its budget enough to match its shrinking enrollment.

S.C. State received a state loan to help pay employees and utilities a year ago. Still, its deficit kept growing. Trustees fired president Thomas Elzey in March. The trustees were fired by lawmakers two months later.

Legislators appointed seven interim board members, led by Way, chairman of a Charleston real estate-development company.

“No one would take ownership of the fact that we owed this money,” Way said of the former board. “We have to take ownership. ... At end of the day, we have to live within our means. And if we don’t, we need to be fired.”

Trustees are working on an agreement with a major undisclosed vendor. Food service provider Sodexo is owed $7 million, while maintenance provider UGL Unicco is owed $3.8 million, according to the latest state data.

Winning over accreditors was key to getting enough time to work down the debt.

SACS would not discuss the factors that led to its accreditation decision, but Way thinks the commission was impressed with acting president Franklin Evans and his staff along with promises by the state for more financial help.

The state treasurer’s office has received a request to release $3 million from a $12 million fund set aside by lawmakers to aid the school.

The House and Senate budgets include another $4 million to pay unpaid bills. But the Legislature has not finished debating the state budget that takes effect July 1.

Way said he shared news about that extra $7 million with SACS at a Tuesday meeting in Virginia.

Trustees also agreed last week to raise $1 million in an effort to attract more students. The school also has started a $20 million fund-raising campaign.

Gov. Nikki Haley said Thursday the accrediting agency's decision suggests a lot of work remains.

"One, they're saying that this is a school that has opportunity,” she said. “This is a school that has enough history that we can pull them out. But they want to be cautious enough to say, 'It's not done yet.' "

The relief on its Orangeburg campus that S.C. State was keeping its accreditation was palpable as Evans announced the news.

“We’re open for business,” Evans said amid cheers from supporters, “and we’re here to stay.”

This story was originally published June 11, 2015 at 11:36 AM.