GPC sanc­tioned

The Covington News - - FRONT PAGE - AM­BER PITTMAN apittman@cov­news.com

This year has been tough on Ge­or­gia Perime­ter Col­lege, and the lat­est bad news came this week when the col­lege was sanc­tioned by the South­ern As­so­ci­a­tion of Col­leges and Schools af­ter an au­dit found the school was op­er­at­ing with a $25 mil­lion bud­get short­fall caused by chronic over­spend­ing and lack of fi­nan­cial over­sight.

The At­lanta Jour- nal-Con­sti­tu­tion Tues­day re­ported the col­lege is still ac­cred­ited, but has been warned be­cause of the fi­nan­cial short­fall and lack of fis­cal over­sight.

A rough year

GPC is the state’s fourth-largest pub­lic col­lege with an en­roll­ment of around 27,000 stu­dents at cam­puses in Al­pharetta, Clark­ston, De­catur, Dun­woody and New­ton County and on­line. The col­lege

See GPC, 8A

is a pop­u­lar op­tion for many stu­dents who at­tend in or­der to get their core classes out of the way prior to trans­fer­ring to an­other in­sti­tu­tion.

In May, former pres­i­dent An­thony Tri­coli re­signed as pres­i­dent fol­low­ing the dis­clo­sure that the school had a roughly $9 mil­lion short­fall at the end of the 2011-2012 school year and a pro­jected $16 mil­lion short­fall for the cur­rent school year. Months later, the col­lege was forced to re­duce its staff of 3,000 by 282 em­ploy­ees, in­clud­ing 26 from the New­ton cam­pus.

Adding onto the sit­u­a­tion was a re­quired 3 per­cent cut from all state agen­cies, which trimmed an­other $1.6 mil­lion from spend­ing. What hap­pened?

The col­lege has been spend­ing be­yond its means for sev­eral years. Re­serve ac­counts have been wiped out by over­spend­ing over the last sev­eral years. At the end of fis­cal year 2009, GPC had $20.7 mil­lion in re­serves. That dropped to $12.4 mil­lion with just $4.9 mil­lion head­ing into the 2012 fis­cal year, in spite of $42.4 mil­lion in rev­enue growth over the last four years.

De­spite the ob­vi­ous over­spend­ing, each mem­ber of GPC’s former fi­nan­cial team claimed to be un­aware of the over­spend­ing, ac­cord­ing to an au­dit done in Septem­ber, es­sen­tially pass­ing blame down the line. How­ever, the au­dit found that of­fi­cials not only should have known but could have pre­vented the is­sues.

The au­dit, con­ducted by Univer­sity Sys­tem of Ge­or­gia of­fi­cials, was long-awaited as school of­fi­cials and the pub­lic sought ex­pla­na­tion for how the school ended up hav­ing to make more than $25 mil­lion in cuts to bal­ance this school year’s bud­get, ac­cord­ing to a pre­vi­ous story in The News.

“In sum­mary, GPC’s fis­cal chal­lenges were pre­ventable. The short­fall in any given year lead­ing up to fis­cal year 2012 was not in­sur­mount­able. Man­age­ment at­ten­tion to GPC’s ac­tual spend­ing would have al­lowed the in­sti­tu­tion to cur­tail the growth in spend­ing,” the au­dit stated. “Un­for­tu­nately, key lead­ers at ev­ery level charged with ac­tual re­spon­si­bil­ity for GPC’s fis­cal man­age­ment did not ex­er­cise all of their as­signed du­ties... Re­spon­si­bil­ity for the in­sti­tu­tion’s man­age­ment rests with the pres­i­dent.”

The au­dit’s con­clu­sion is what many sus­pected — namely that Tri­coli and other’s “em­pha­sis on en­roll­ment growth and pro­gram ex­pan­sion took prece­dence over sound fis­cal prac­tice as man­age­ment and lead­er­ship pri­or­i­ties.”

That fi­nan­cial re­spon­si­bil­ity and blame, also rested on the chief busi­ness of­fi­cer, as­sis­tant vice pres­i­dent for fi­nan­cial and ad­min­is­tra­tive af­fairs and the bud­get di­rec­tor.

How­ever, state Rep­re­sen­ta­tive Karla Dren­ner re­cently de­fended Tri­coli’s re­spon­si­bil­ity in the fis­cal fi­asco.

“Sev­eral state­ments made in the fi­nal au­dit report sug­gest the prob­lem was not solely at the pres­i­den­tial level. Other de­part­ments sug­gested to be in­volved were the hu­man re­source and bud­get of­fices,” Dren­ner said in a state­ment. “GPC un­der­stated the fringe ben­e­fits that cor­re­sponded with each em­ployee on the pay­roll. This un­der­state­ment has been es­ti­mated at $6.7 mil­lion.”

Dren­ner said that since both the hu­man re­sources de­part­ment and the bud­get of­fice both re­ported to the same vice pres­i­dent, the prob­lems with bud­get is cen­tral­ized “in this one area un­der this one vice pres­i­dent.”

“Pres­i­dents in all or­ga­ni­za­tions are ul­ti­mately re­spon­si­ble for the or­ga­ni­za­tions in which they have been charged to run but, pres­i­dents must rely upon their staff to pro­vide them with ac­cu­rate in­for­ma­tion, so the best de­ci­sions can be made in a timely fash­ion,” she said.

Based on numer­ous in­ter­views con­ducted by au­di­tors, each of­fi­cial ul­ti­mately held an­other of­fi­cial ac­count­able for the fact bud­get deficits were go­ing un­no­ticed. What hap­pens now?

Since the Univer­sity Sys­tem of Ge­or­gia’s Septem­ber au­dit found that the school’s se­nior fis­cal lead­ers ei­ther ig­nored or didn’t no­tice the school’s dire fi­nan­cial straights, the school has been given one year to re­solve their is­sues. A warn­ing was is­sued to the school ear­lier this week.

“A warn­ing is not unan­tic­i­pated in this sit­u­a­tion,” said Bar­bara T. Obrentz, chief pub­lic in­for­ma­tion of­fi­cer for GPC, in a press re­lease. “It is ex­pected that the col­lege will be able to demon­strate to SACS that th­ese is­sues have been com­pletely re­solved within 12 months.

“Ge­or­gia Perime­ter Col­lege has al­ready made no­table strides to cor­rect bud­get­ing is­sues and re­turn the in­sti­tu­tion to solid fi­nan­cial foot­ing,” Obrentz said in the re­lease. “We will con­tinue to im­ple­ment and strengthen the con­trols put in place dur­ing the sum­mer of this year so that we may re­solve any re­main­ing de­fi­cien­cies and bring the bud­get back into bal­ance…We value the stan­dards that SACS sets for its mem­bers. Th­ese stan­dards al­low us to achieve our mis­sion as Ge­or­gia’s largest ac­cess in­sti­tu­tion.”

Although the col­lege has re­tained its ac­cred­i­ta­tion sta­tus, mak­ing sure they com­ply with the is­sues raised will de­ter­mine if they re­ceive just one warn­ing, or two. A sec­ond sanc­tion could mean that the school is placed on pro­ba­tion, ac­cord­ing to the SACS web­site.

Obrentz added in a mes­sage Thurs­day that the school’s bud­get of­fice is ad­dress­ing each in­di­vid­ual is­sue SACS has and looks for­ward to re­gain­ing full ac­cred­i­ta­tion at the end of that time.

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