Higher enrollment, refinancing could help Benedict balance budget
Benedict College has enrolled 2,508 students so far for the fall semester, president David Swinton said Friday, and has about 70 more students who are in classes and awaiting approval of their financial aid packages.
The historically black college on Columbia’s Harden Street had 2,552 students last fall, and was forced to cut employee pay and spending when the 2005 enrollment lagged expectations.
Stabilizing enrollment will allow the college to have a balanced budget, Swinton said, and to work on easing the college’s approximately $106 million debt.
In their fall quarterly meeting, Benedict trustees spent about three hours in closed session with banking representatives discussing conversion of about $20 million of the college’s short-term debt into long-term debt.
The refinancing agreement is vital to easing the financial crunch brought on by several years of borrowing and deficit spending.
Trustees voted to instruct Swinton to move quickly to negotiate the final terms of a refinancing agreement, which then would be taken up in a special session of the trustees.
Trustee Steve Morrison, outlining the actions of the finance committee, said the school was getting control over a troubled finance office, looking to hire a comptroller and a budget director, and catching up past-due debts to local businesses.
Each year since 1997, the Education Department has cited Benedict for deficiencies in solving accounting and policy problems left from previous years.
“We were not paying our partners in the community on a timely basis and we were borrowing to pay those debts,” Morrison said. He said payment of monthly bills is now taking place in 30 to 45 days.
He said the college hopes to have the two key financial officers hired by January, to which trustee William Diggs said, “Wait a minute. That’s one of our weak areas. We need those people now.”
Finance director Brenda Walker said January was the outside timetable to hire the two people, and she hoped it would be done sooner.
Morrison said several measures over the past year have helped cut spending and balance the budget:
• Employees must shoulder more of the health care cost with higher co-payments.
• Salaries were cut 5.6 percent on an annual basis.
• Some positions were left vacant.
• Travel and discretionary spending was restricted.
• Doing custodial work with college staff instead of contractors saved about $150,000.
• Managing food service with college staff instead of contractors saved about $1.6 million.
New trustees Vince Ford and Darrell Jackson attended their first board meeting Friday. Ford’s first question was to have his own copy of the college’s directors and officers insurance policy, which provides liability coverage for the trustees. Swinton promised him a copy, which he said provides $10 million in coverage per incident.
The trustees engaged in a lengthy, introspective, and sometimes tense discussion of the quality of the information the board members receive, and the oversight role the board should play.
It started with the finance committee report. Members who had attended the meeting had information that was not provided to other trustees.
“The whole board is responsible for what is done, not just the committee,” Diggs said. “I’m going to ask questions about finances in this meeting.”
“There has to be a better way for committees to bring us solutions,” trustee LeRoy Walker said. “We have plenty of good information within the board. We are not processing it effectively.”
Trustee James Clark, who chairs the finance committee, responded: “I hear what Rev. Diggs and Dr. Walker are saying. I’m willing to serve on any committee to improve our flow of information.”
Swinton grew defensive when Jackson asked for copies of the finance committee documents.
“I want to be a little cautious about asking for the handouts. We’re not trying to have these out in the street,” Swinton said.
Jackson responded: “That’s not directed to Dr. Swinton,” adding that his request was to board chairman Charlie Johnson.
“I’m the president of the college,” Swinton said.
“You are not the chairman of the board,” Jackson said.
“Every member of this board has the same status,” Diggs said.
Swinton reiterated: “When something gets out from this body, it causes us problems, it hurts us.”
When asked to vote to approve the finance committee report, Jackson and Ford abstained, without comment.
Clark, the finance committee chairman, said to Jackson and Ford, “I’d ask you to tell me how to improve the report.”