Sweet Briar College’s unexpected closing is due to the “poor leadership” of the school’s administration, according to a new report from Fox Business’ Elizabeth MacDonald.
This supposed mismanagement, MacDonald asserts, comes directly from poor leadership at the school in the past five years. It was during this period that the 114-year-old all women’s collegebegan to experience financial trouble, which the current administration has attributed to external forces such as declining enrollment trends.
However, millions of dollars continued to go towards unexplained expenses, even as the school supposedly struggled to stay alive, MacDonald reports, citing tax records and other documents.
Sweet Briar spent $US47 million on office expenses in 2012 — as well as roughly $US17 million towards “other expenses” that year, according to MacDonald. These numbers had barely changed from 2008, when the college spent $US45.7 million on office expenses and $US18.6 million on “other expenses.”
“Since the board has claimed financial straits, it would be reasonable to expect it to be tighter than two coats of paint when it comes to such costs,” according to MacDonald. However, Sweet Briar’s administration had “big kitchen sink line items submarined in the school’s tax returns,” she reports, which barely shifted over the course of several years.
These expenses, MacDonald writes, are “symptomatic of turmoil.”
Sweet Briar is currently slated to shut its doors for good at the end of the summer, although faculty, alumnae, and local community leaders have filed litigation to impede its closing. The numbers behind the college’s finances have been a continuing battle between the various groups.
The lawyer for Sweet Briar, Calvin Fowler, has acknowledged that the school had a $US84.8 endowment but said much of that money was restricted and that the school’s debt exceeded its unrestricted funds.
Moreover, he has said, Sweet Briar needs to have 800 students enrolled to be sustainable but had just 532 students at the beginning of the current semester when the board voted to close.
In her lawsuit against the school, Amherst County Attorney Ellen Bowyer details how Sweet Briar’s financial situation may have actually gotten better in the past few years:
A review of the College’s annual financial statements from 2010 to 2014, shows that annual operating deficits were more than offset by the endowment’s investment gains, grants, gifts and alumnae giving. This pattern resulted in an increase of the College’s net assets (total assets minus total liabilities) over the last five years from $US126 million to $US134 million. During the same period, the College’s debt load decreased from approximately $US42 million to $US25 million while its endowment increased from $US85 million to $US95 million.
Likewise, alumnae activist group Saving Sweet Briar released a report last month from a forensic accountant questioning the college’s claims.
“Assuming the College’s finances are handled in a prudent and responsible way going forward, it would still remain financially viable,” Steve Spitzer, a CPA and certified fraud examiner, writes. “Our preliminary conclusion upon a review of the publicly-available data is that, as of approximately eight months before the closure announcement, the College was financially viable, and there was not an urgent financial reason to close.”
Business Insider has reached out to Sweet Briar College and former Sweet Briar president Jo Ellen Parker for comment on the Fox Business article and will update with any statement we receive.
[“source – businessinsider.com.au”]