News Articles

Alabama board recommends no funds for inadequate Mobile ‘compliance’

MONTGOMERY, Ala. (BP)–The executive committee of the Alabama Baptist State Board of Missions has recommended the University of Mobile be excluded from the 1998 Cooperative Program budget. That action came after almost four hours of debate behind closed doors July 25 in Montgomery.
The executive committee action said the university could be restored to the budget if it submits “an acceptable response” to a June 3 resolution the committee adopted concerning the university’s financial crisis. The committee asked for a “definite written plan of action … no later than Aug. 20, 1997.”
“The University of Mobile has not given adequate response to the June 3 request of the executive committee asking the university to comply with their 1994 agreements with the Alabama Baptist State Convention,” said James Newell, pastor of Coosada Baptist Church, for the committee.
On June 3, the executive committee asked the University of Mobile to certify in writing it was living by the 1994 agreements specifying the Nicaraguan campus of the university will be funded only by money generated by that campus or given for the work of that campus. The university also agreed to send no more funds from the Mobile campus to Nicaragua after the 1994 date.
In addition, the school was to return to the Mobile campus about $2.3 million already spent on the Nicaraguan campus. However, on May 22, following the ouster of Michael Magnoli as president, University of Mobile trustee chairman Robert Maxwell told the Alabama board executive committee the Latin American debt had grown to $3.2 million. Maxwell, an attorney from Atmore, said the debt had grown despite the university’s announcement the previous November the debt had been reduced to about $1.6 million.
In response to the executive committee request, the University of Mobile adopted a 1997-98 budget projecting a $200,000 surplus for the Nicaraguan campus. A resolution submitted by the university along with its new budget said, in part, “compliance with annual operating budgets … will allow such excesses to be applied to recover the funds spent by the university in the establishment, development and operation of the Latin American campus.”
Newell said the executive committee was in strong agreement that the response is inadequate. “The trustee resolution is based on budget performance. It says, ‘If there is anything left, we can pay back the Mobile campus.’ That is not a firm commitment that money will be there. The resolution does not say the money will be returned or when it will be returned.
“What we want to see is the Mobile campus paid first. Then others can be paid,” Newell declared.
The university’s interim president, Walter Hovell, said it is “mandatory” the university respond positively to the executive committee’s action. “I do not wish to think of the negative results of not complying with this action,” he added.
The University of Mobile budget totals $25,012,440 for 1997-98, including $2.1 million from the Alabama Baptist State Convention.
Troy Morrison, Alabama Baptist executive secretary-treasurer, told Hovell the intent of the executive committee action is “not to do harm to the University of Mobile but to help as you lead the trustees to get out of the financial crisis you are in.”
The decision to recommend the university be removed from the 1998 Cooperative Program budget came as somewhat of a surprise. Before going into executive session, Newell announced the special ad hoc committee monitoring developments at the University of Mobile was recommending the executive committee ask all University of Mobile trustees to resign.
Instead, the committee opted to remove the university from the budget until it comes into compliance with the 1994 agreement.
“The thrust of the committee is to convey to the trustees the seriousness of not complying with the 1994 agreement,” Newell said. “We could either remove the university from the budget or ask the trustees to resign. We backed away from taking the most drastic action and decided to give the trustees a second chance.” In a related matter, three federal subpoenas were served on the University of Mobile July 23. Hovell said he had been told to expect additional subpoenas in the days ahead. The subpoenas were the first tangible evidence of criminal investigations that have been reported as under way.
U.S. Attorney J. Don Foster emphasized the university is not under investigation for wrongdoing. He declined to confirm or deny if people associated with the school or formerly associated with the school were targets of investigations.
Meanwhile, the University of Mobile has been placed on a six-month probation during which it must prove it can “ameliorate” its $10 million-plus debt or face losing accreditation, the Southern Association of Colleges and Schools reported June 25.
Walter Hovell, interim president, said the SACS probation would not affect the education quality of the university and added Mobile remains accredited.
Jack Allen, associate executive director of the Commission on Colleges of SACS, stated university officials must have a plan submitted by October to the association for balancing its budget, although Allen said SACS allows the university to determine its own deadlines for meeting the budget requirement.
Allen noted the university will have to provide justification for its financial plan and complete audits from an outside auditing firm of its main campus in Mobile and Latin American campus in Nicaragua.
“Mobile will have to show us good cause for why they should not be dropped,” Allen said.
Hovell and other university officials met with SACS June 23 in Asheville, N.C., regarding the school’s financial condition. The June report was a follow-up from a 1994 SACS review of the Nicaraguan campus in which a committee found some requirement violations. Allen explained at the end of a two-year followup, SACS is required to drop a university’s accreditation unless there is good cause to put the school on probation instead.
Allen said he did not know what the violations were in 1994 to prompt the June follow-up, nor did he know what “good cause” a SACS committee had for putting Mobile on probation rather than pulling accreditation this time. He added, however, the change in leadership had some influence, and SACS felt Mobile demonstrated potential to be a viable institution. “If there was no potential, they would have been dropped,” Allen said.
Hovell has only said he is confident the university can resolve the financial concerns “in the near future.”

    About the Author

  • Bob Terry