Auditor questions college's ability to survive

ATLANTA - Morris Brown College, a nearly 120-year-old historically black school, is so deeply in debt that an auditor questions its ability to survive. <br> <br> The college had $77,700 in its bank account and $17.3 million in outstanding debt at the end of June, according to the audit for the last fiscal year. <br> <br> Morris Brown owes $7.4 million in loans, most of them taken out within the last fiscal year. The school also has a $14 million bond debt. <br> <br> The college is on probation with its accrediting agency. If it loses accreditation, the federal government would cut off student financial aid that accounts for 70 percent of the money the school receives. <br> <br> ``These factors raise substantial doubt about the College&#39;s ability to continue as a growing concern,&#39;&#39; auditors from the Wesley Peachtree Group wrote. <br> <br> Among the creditors is the Atlanta University Center, which provides library and data processing services to Atlanta&#39;s six historically black colleges and universities. As of June 30, 2002, Morris Brown owed the center $4.8 million. <br> <br> The audit noted a $16 million decline in the school&#39;s assets in 2002, and also shows the school spent in excess of $2 million from its endowment to cover operating expenses, ``which may be in violation of the donor&#39;s intentions.&#39;&#39; <br> <br> Morris Brown President Charles Taylor, who has estimated the school&#39;s total debt at $23 million, said Wednesday that he is developing a recovery plan that will show how the school intends to cut costs and pay debts. <br> <br> Taylor said he would not discuss details until he has presented the plan to the Southern Association of Colleges and Schools, which will visit Morris Brown Oct. 28-31. <br> <br> The audit was prepared at the request of the accrediting association, which placed Morris Brown on probation in December for poor accounting practices and for having too few faculty members with advanced degrees in their subjects. <br> <br> The school&#39;s financial status is expected to play a major role in whether its accreditation will be extended in December. <br> <br> Problems with Morris Brown&#39;s handling of federal financial aid led to its operating deficit, auditors said. <br> <br> So far, Morris Brown has been ordered to repay the U.S. Department of Education nearly $6 million that the school received for students who did not qualify for financial aid, or who dropped out or never enrolled. The department may demand additional payments.

http://accesswdun.com/article/2002/10/188771