Overdue Audit Threatens Grambling’s Existence

Black and gold banners proclaiming “100 Years of Excellence” remain on lampposts throughout the Grambling State University campus a year after the historically black school’s centennial.

Such symbols of longevity seem to be needed reassurance at a time when Grambling is struggling to overcome an episode of accounting incompetence so drawn out that it threatens to close the school.

“Sometimes I wake up at night, shaking, wondering, what if?” said Helen Richards-Smith, dean of the university’s honors college and a Grambling faculty member for most years since she graduated from here in 1944.

The campus of red bricks and white columns amid the piney hills of north Louisiana, founded by an association of black farmers in 1901, has been unable to provide financial statements deemed acceptable for a state audit since 1997.

Such an audit is generally required in three consecutive years for re-accreditation, a process that occurs every 10 years and is now about two years past due at Grambling.

The Southern Assn. of Colleges and Schools, an Atlanta-based national accrediting group, has placed Grambling on probation and has set a Sept. 16 deadline for an approved audit for the past two academic years.

Federal Aid Threatened

If Grambling loses its accreditation, it will also lose federal funding, including financial aid for students -- 90% of whom now receive this aid. If unaccredited, its degrees would lose value with graduate school admissions offices and professional licensing boards.

“We’d be out of business,” said Grambling graduate David Wright, who sits on the Louisiana university system’s board of supervisors, which oversees the school. “All over the country, it would be a terrific blow because we have a lot of alumni and friends of Grambling.”

Grambling is to black America what Notre Dame is to Roman Catholic America in the fierce loyalty it inspires among alumni and countless boosters, including many who’ve never set foot on campus.

In football, Grambling became synonymous with success under now-retired coaching icon Eddie Robinson.

The Grambling marching band’s high-energy performances have included Super Bowl halftime shows and inaugurations of African presidents.

Grambling graduates hold management jobs at companies like Ford, Gannett, Cisco and Apple.

These accomplishments come despite the fact that many students are the first in their families to go to college and that many incoming students need remedial help. There is no minimum admission standard except a high school diploma.

The school’s motto is: “The place where everybody is somebody.”

Series of Problems

The accounting mess -- the latest in a series of financial problems, including thefts and improper spending -- has made it a place where everybody is anxious.

“None of my friends have left, but we were all talking about it,” said Tamika Noble, 21, a senior studying sociology. Still, she’s certain the school has much support. “They’re not going to let Grambling close down.”

Reshawn Thomas, 20, a senior marketing major and Student Government Assn. treasurer who comes from a long line of Grambling graduates, says the looming accreditation question is “everybody’s top concern.”

State Legislative Auditor Dan Kyle has doubled the auditing staff he originally dispatched to help the school meet the deadline: “They have an enormous task. Whether they can do it I cannot predict,” he said.

Describing the bad bookkeeping, Kyle said, “It’s like saying for accounts receivable, ‘Several different people owe me $10,000 combined, but I don’t know who they are or how much each one owes.’ ”

Grambling officials acknowledge that the accounting staff in recent years was undertrained. But the root of the problem, many say, was instability at the top. After having only three presidents in its first 90 years, Grambling is on its sixth president since 1991. It has had seven vice presidents of finance since 1993.

Grambling has been “fought over like a fiefdom by politically connected blacks,” said Rick Gallot, a black state representative and a Grambling graduate.

His mother, Mildred Gallot, also a Grambling graduate and longtime history professor, adds that recent presidents “seemed to have the attitude: ‘I need my people in place -- people loyal to me.’ ”

One example was Steve Favors, a former Howard University administrator appointed Grambling’s president in 1998.

Alienation Reported

Melvin Davis, chief financial officer when Grambling received its last approved audit in 1997, said he felt alienated by Favors and took a better-paying job in 1999. Davis said he offered to help Grambling close its books for 1998 and 1999 anyway, so the school would be ready for its regularly scheduled re-accreditation in 2000. He was rebuffed.

Favors hired a new CFO, who backed out before his first day of work and took a job in Florida instead.

A Grambling spokeswoman said requests for interviews with Favors, who was forced out as president in January 2001 but remains on the faculty, had to go through her. The request was made; Favors did not respond.

After Favors’ ouster, the board appointed Neari Warner, a Grambling insider who was accomplished in academic affairs but lacked experience with certain administrative and financial matters, as acting president.

“It made me wonder if they were setting her up for failure,” Rep. Gallot said.

126 Workers Fired

System president Sally Clausen said Warner accepted the job on an interim basis and so far has shown determination to take tough measures, including the firing of 126 employees, mostly administrative.

“The end result is that the legislative auditor now believes the right people are in place,” Clausen said.

Last summer, Warner brought in Billy Owens, a former top financial officer with Jesse Jackson’s Rainbow / PUSH Coalition, as Grambling’s new CFO, its first since Davis in 1999.

On meeting the deadline, Owens said, “What appeared to many one year ago as an impossibility now looks like a very real possibility.”

Warner also remains positive.

“I see these difficult situations as launching pads to higher standards of accountability and productivity,” Warner said in a written response to a reporter’s questions.

Grambling does not appear to have cash-flow problems, say officials with the Louisiana Board of Regents, which oversees all state universities.

Grambling receives about 20% more in state funding per student than the average for Louisiana’s four-year campuses, in part because of a civil rights settlement that required the state to compensate for years of spending more on predominantly white than historically black colleges.

But the current crisis is only the latest in a series of financial embarrassments since 1993, when Kyle refused to express an opinion on the accuracy of Grambling’s financial statements. And he deemed Grambling’s financial statements unacceptable in 1994. The accreditation group’s warning came a year later.

A 1996 legislative audit reported a variety of irregularities, including:

* $343,000 in uncollected debts.

* Thefts of computers and air conditioners worth $51,000.

* $10,500 in scholarships given to unqualified high school graduates.

President Forced Out

Trustees soon forced university President Raymond Hicks to resign. He left the school with a $3-million deficit, which officials said was caused largely by overestimating enrollment.

Enrollment dropped sharply -- from 7,833 in fall 1993 to about 4,500 now -- but officials say factors other than financial woes were the main cause. Most important, they say, were an effort to set higher admission standards, which have since been dropped, and higher tuition for out-of-state students, which has been retained.

But revelations of questionable spending have not helped. In the mid-1990s, Andrea Jefferson, wife of U.S. Rep. William J. Jefferson (D-La.) was paid $50,000 by Grambling to teach a class in New Orleans. One student enrolled.

Then there was the transfer of public money -- about $1.6 million -- to the Grambling Foundation, the university’s now-bankrupt private fund-raising arm.

Favors, the former president, has said Grambling trusted that the money it transferred to the foundation would be spent to benefit the school, but had no control over it. He blamed problems on a foundation administrator from 1997 to 1999.

Kyle, the state audit chief, found that money meant for scholarships was instead spent on administrative costs and the start-up and operation of a short-lived sports bar. More than $1 million that the foundation received from the annual Bayou Classic football game went to expenses, such as hotel rooms, receptions and limousine services.

Grambling’s proceeds from the game were transferred to the foundation, which Kyle concluded had failed to keep credible financial records and displayed “a lack of integrity.” No charges have been filed.

“Everybody wants to see Grambling become more accountable,” said Herbert Simmons, director of alumni development. He termed the latest financial crisis “a wake-up call.”

Scholarship Recipient

Simmons’ bond to Grambling is strong. Reared by a grandmother who couldn’t read or write, Simmons came to the school on a band scholarship and went on to become a lawyer.

The loss of Grambling “would be unthinkable to me,” he said. “For 100 years, we’ve been taking nobodies and turning them into somebodies.... Where would we be as a nation without Grambling?”