Saint Augustine's students, staff left to deal with uncertain future amid accreditation worry
RALEIGH, N.C. (WTVD) -- Financial challenges and uncertainty continue to dominate Saint Augustine's University.
It remains unclear if employees will be paid in their next paychecks, or how the more than 80 percent of students on campus who receive financial aid will be able to get their money.
The next step in the continuing saga is for Saint Augustine's to decide if it will move forward in the arbitration process. SAU Interim President Dr. Marcus H. Burgess already said the school would do that, but the school has nine more days to formally file the paperwork in that process.
If the school does opt for arbitration, it will keep its status as accredited but on probation. If it does not enter arbitration, it is highly likely that accreditation will be revoked.
According to federal rules, students can only receive federal financial aid if they are attending an accredited university.
So if a student chooses to remain at Saint Augustine's and the school's accreditation is ultimately revoked, they would have to find money for tuition from somewhere else. If the school actually closes, students would be eligible to have those federal loans discharged and forgiven.
"My family graduated from here years ago, and they were telling me just don't come here," criminal justice student Gabby Smith said. "It's a mess. Things were happening then when I was transferring over. So my grandmother, she's been pretty upset. She's been watching the news everyday listening to what's going on. And she's calling me like 'I told you not to go here. I hope you guys are going to be OK.'"
Smith said the school actually owes her money, due to an accounting error -- one of several outlined in a recent audit uncovered by the ABC11 I-Team.
"(My grandmother) told me today that she's going to call the school and ask them, 'What is happening with my daughter. She'll be graduating. She's a senior! And where is her refund check!?' You know because they still haven't given out refund checks and I have a balance," Smith said.
Payroll Issues
The university has been facing payroll issues since February 9 when employees did not get paid.
This led university leaders to hold a candlelight vigil as an attempt to build back up through hope and faith. The vigil aimed to show students and staff that there is a strong community around them.
Financial Woes
ABC11 uncovered documents on February 16 just how bad the financial situation at the university is.
For example, Wellfleet Insurance Company is suing the university stating it breached contract by failing to pay premiums.
The policy took effect in August 2021 and it was signed to cover student health insurance plans. Records show the lawsuit was filed in August 2023.
Wellfleet said Saint Augustine's owes it $439,000 after making partial payments of $240,000.
ABC11 also obtained a document that revealed in October of last year the university took out a $ 7 million line of credit with Arkansas-based Bank Ozk, Burgess said the university only received $4.5 million of that money.
New financial documents show the HBCU apparently had issues with money management for years. An audit shows during the 2021 fiscal year that the university had $10 million that's considered unsupported.
Games Go On
The first men's game of the 2024 CIAA basketball tournament was Monday night with Saint Augustine's losing to Bluefield State. The women's team will play today.
Last Monday, Burgess said that it would be a challenge to get students to the tournament because of financial constraints. He told ABC11 that the university's request for a loan from a bank was denied.
"We got denied because of the press..the negative press," said Burgess. "The financial instability. Now, on one hand, it makes sense right? We've got IRS problems. We've got problems all over the place."
