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

MONTGOMERY, AL (WSFA) - Members of the board of trustees of Alabama State University havesat on their hands and watched  previousadministrations dig a huge financial hole for the university, and in many casestrustees helped dig the hole. So why are some trustees now acting surprised atthe dire situation ASU faces?

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

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

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

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

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

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

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

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

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

For instance, they keep blaming the long-running forensic auditfor 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 thenused money the university couldn't afford to pay Silver several hundredthousand dollars to go away.

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

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

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

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

In other words, Dean and Wiggins -- the chair and vice chair of thetrustees -- 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 inthe making. In fact, her reorganization plan that was approved recently shouldcut 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 payfor trips, etc.

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

But the executive committee approved sending it to the full boardanyway.

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

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

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

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

Those issues won't be solved by members of a board of trustees whoaren't willing to acknowledge their  responsibility for creating thismess.

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


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

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