Ken Hare In Depth: Why are ASU trustees surprised by financial h - WSFA.com Montgomery Alabama news.

Ken Hare In Depth: Why are ASU trustees surprised by financial hole?

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MONTGOMERY, AL (WSFA) -

Members of the board of trustees of Alabama State University have sat on their hands and watched  previous administrations dig a huge financial hole for the university, and in many cases trustees helped dig the hole. So why are some trustees now acting surprised at the dire situation ASU faces?

The executive committee of the board met last week to discuss ASU's financial crisis -- the phrase "financial crisis" is overused in governmental circles, but is entirely appropriate in this case. That crisis has been at least three years in the making. It has resulted in a rating agency repeatedly downgrading ASU's bond rating, with the possibility of a further downgrade in a few months.

In addition, ASU's academic accrediting agency, the Southern Association of Colleges and Schools, has placed the university under warning. In a letter received this week, SACS came down hard on ASU's handling of finances. SACS also placed much of the blame for the warning on the board of trustees.

At one point in the meeting last week, Trustee Herbert Young was reported to have said:  "If we continued going at the rate we were going, we wouldn't be able to pay our debt service for the next year and a half. I'm not sure how we got into this shape, but we have to figure out a way out of it."

It should be a scary proposition for any Alabama taxpayer to hear a veteran trustee who is a member of the board's executive committee claim that he doesn't understand how the university "got into this shape."

For any trustee to make such a claim is an eye-opener. But consider this: Young is chairman of the board  finance committee.

Frankly, I suspect that each trustee who has served on the board for the past several years knows exactly why the university is in such a crisis. In a nutshell, the university borrowed too much money and waited far too long to start addressing expenses in a meaningful way when revenues went flat. In addition, based on the SACS letter, the financial processes of the university were shoddy.

Borrowing cannot occur without the approval of the board of trustees. It is also the board of trustees that approves the budget.

So there is no logical way that the trustees can escape the responsibility for the fiscal crisis at ASU.

But instead of owning up to that responsibility, some trustees are looking for scapegoats.

For instance, they keep blaming the long-running forensic audit for the university's problems.

But it is the trustees who hired former president Joseph Silver, whom they then ran off after he questioned contracts and spending. They then used money the university couldn't afford to pay Silver several hundred thousand dollars to go away.

Blaming the lack of a final report from  forensic auditors for the university's fiscal problems is ludicrous. First, the trustees approved the hiring of an outside attorney at $375 an hour, and it appears that he has tried to frustrate and delay the probe rather than speed it along. But the heel-dragging did nothing to stop the forensic audit from becoming state and federal investigations, and those aren't going away until they are concluded.

But the audit is not at the heart of the university's fiscal problems -- borrowing and spending decisions and sloppy accounting are, and the responsibility for those ultimately rests with the trustees.

It was particularly repugnant for trustee Marvin Wiggins to use the meeting last week to question spending by new President Gwendolyn Boyd. Wiggins seemed to be parroting similar questions posed earlier by former trustee Donald Watkins. Wiggins seems intent on trying to discredit Boyd.

However, it is a "familial conflict of interest" by Wiggins that is mentioned prominently by SACS  as part of the reason for its accreditation warning. SACS also cited conflicts by trustee chairman Elton Dean, who SACS said did not report financial ties by family members to the university on his trustee Conflict of Interest form or on his statement of financial interest filed with the Alabama Ethics Commission.

In other words, Dean and Wiggins -- the chair and vice chair of the trustees -- are at the heart of the problem.

President Boyd, has been at the university for only a few months, so clearly she is not the cause of this fiscal crisis, which has been years in the making. In fact, her reorganization plan that was approved recently should cut a lot of fat from the budget.

At the same time he nitpicked Boyd's spending, Wiggins proposed a $100,000 annual allotment for trustees to hire their own employees or to pay for trips, etc.

Such a slush fund would for the trustees would be inappropriate at any time, but it is outrageous to even suggest it with the university's financial situation in such dire straits.

But the executive committee approved sending it to the full board anyway.

If the full board were to approve this ridiculous request, it would send a message to the bond rating agencies and the university's accrediting agency that the trustees do not take this crisis seriously.

If Wiggins and Dean want to do what is best for ASU, they would resign from the board, or at least resign as chairman and vice chairman.

But absent that, the full board should remove them from the leadership posts. That would send a message to SACS and the rating agencies that the board is serious about turning ASU around.

ASU is in real trouble. It faces a warning from its accrediting agency. It has lost the confidence of a key  bond rating agency. It has had deficit budgets for several years running. Federal and state investigators are reportedly looking into financial dealings.

Those issues won't be solved by members of a board of trustees who aren't willing to acknowledge their  responsibility for creating this mess.

To pull ASU out of the hole that trustees helped dig, the full board must stop tolerating business as usual by a handful of trustees. New board leadership is desperately needed.

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Ken Hare was a longtime Alabama newspaper editorial writer and editorial page editor who now writes a regular column for WSFA's web site. Email him at khare@wsfa.com.

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