A string of civil lawsuits demanding money for unpaid bills has been filed against Arkansas Baptist College.
The latest financial woes for the historically black college in Little Rock come just a month before it has to provide proof to a national agency that financial and internal problems that could jeopardize its accreditation have been resolved.
Since 2013, the college has been struggling to pay bills, meet payroll obligations and distribute financial aid checks to students.
A lawsuit filed Thursday in Pulaski County Circuit Court claims that Arkansas Baptist College twice bounced a $157,016.68 check to pay for furniture it purchased from Southwest Contract in Temple, Texas.
The company seeks $314,033.36 -- twice the amount of the check -- because Arkansas Code 4-60-103 allows the amount to be doubled if payment is not made within 30 days of notice by certified mail.
According to the lawsuit, a letter demanding payment for the insufficient check was delivered on June 4 and Arkansas Baptist College has not paid the debt to date.
When contacted Thursday, a representative with Southwest Contract declined to comment.
The invoice filed with the lawsuit from the company shows purchases of 56 loft beds, 192 three-drawer chests, 56 mattresses, 192 desks and 192 chairs. The Iberia Bank check says it's from the college's "Women's Dorm" account.
The Arkansas Department of Workforce Services filed a lien on July 2 on all of the college's real and personal property because of $131,437.15 in unpaid unemployment insurance contributions, interest and penalties.
A lawsuit filed in Pulaski County Circuit Court on May 13 claims the college did not repay a $132,325.67 loan from GreatAmerica Financial Services Corp., a national commercial equipment finance company based in Iowa.
The Iowa District Court issued a judgment on Feb. 18 against the college and awarded GreatAmerica Financial Services Corp. $138,008.02 in relief. Attorneys representing the company filed a writ of garnishment in Pulaski County Circuit Court for the college's account with First Security Bank on May 30.
In March, Pulaski County Circuit Judge Mackie Pierce found the college in contempt after officials failed to comply with a court order to produce financial records in a lawsuit filed last summer. Little Rock-based RRE Reserves, which owns several apartment complexes that Arkansas Baptist College leased for student housing, filed a suit claiming that the college owes $72,108.82 in back rent and utility payments.
Arkansas Baptist College turned over the documents on April 7.
Overall, the Pulaski County Circuit Court docket shows that the college has had seven civil lawsuits filed since January 2013.
Shane Broadway, director of the Arkansas Department of Higher Education, said Thursday that the department has had recent complaints from students regarding the processing of financial aid.
"But the number of complaints is certainly less than what we received last fall," Broadway said.
While the Higher Education Department does not have regulatory power over the private college, Broadway became involved last fall when the state agency received numerous calls from students who had not received financial aid checks. Agency officials helped the college navigate that crisis.
When asked Thursday if Arkansas Baptist College students were currently receiving financial aid payments, LaCresha Newton, the college's chief of staff, said in an email: "I appreciate your question; however, there is no basis for merit or fact. The College is in compliance with federal student aid guidelines and we are meeting payroll obligations."
Arkansas Baptist College President Fitz Hill previously told the Arkansas Democrat-Gazette that the college's financial situation was a result of "cash flow" problems, not financial ones.
The problems, Hill said, began when the U.S. Department of Education placed the college on Heightened Cash Monitoring Status last year.
Typically colleges receive federal student aid funds on an "advance pay" or "direct reimbursement" basis from the U.S. Department of Education. Once an educational institution has been placed on "Heightened Cash Monitoring 2," the funds are released to the school after it has made the disbursement to the student or parent borrower, and the school must submit manual reports. The process significantly slows the affected college's cash-flow process.
Hill did not respond to a request for an interview Thursday from a Democrat-Gazette reporter, and Newton responded only by email.
"The events which created these challenges were caused by the change in which Arkansas Baptist College receives payment for federal student financial aid," she said in an emailed statement. "Arkansas Baptist College is fully cooperating with our vendors and has provided them with the information required to secure our obligations as we continue to make progress in paying each of our creditors in full."
In March, the Higher Learning Commission, which accredits the 1,000-student campus, placed the college on notice and gave the college until Aug. 18 to provide evidence -- including a required forensic audit conducted by a firm selected by the commission and under its direction -- that it has effectively addressed concerns that the commission identified in a three-month review.
The investigation started after the commission received complaints "regarding the College's handling of its financial obligations, including, but not limited to, its meeting of payroll obligations, handling of federal financial aid, maintenance of existing College buildings and technology, and related concerns."
After its investigation, the commission cited concerns about whether the college can meet its financial obligations and questioned the effectiveness of its leadership to fulfill the institution's mission. The commission cited the college, saying it failed to enforce its policies on "self-dealing and lacks appropriate mechanisms to do so." The term "self-dealing" refers to school employees or board members who benefit financially from the college through business or financial interests.
The commission is to conduct a "focused evaluation" of the college by the end of October. In February, the commission will decide whether the college can be removed from notice status.
When contacted Thursday, John Hausaman, a representative with the Higher Learning Commission, said he could not comment on whether recent complaints have been filed against the college or if the current civil lawsuits would trigger more immediate action from the commission.
"We are still on track to be on campus in October," Hausaman said.
Several attempts to reach members of the Arkansas Baptist College board of trustees for comment were unsuccessful as of Thursday evening. A request to Newton for an updated list of trustees as well as contact numbers was denied. However, Newton did provide a phone number for the board chairman, Dennis Edwards.
Edwards did not return a telephone message left Thursday with his assistant at St. John's Missionary Baptist Church.
Newton wrote in an emailed statement that there have been a series of "very positive financial developments" over the past few months that will allow the college to resolve the cash flow obligations in the very near future.
"In the meantime, we want the community to know that Arkansas Baptist College appreciates its committed employees, dedicated students, patient vendors and supportive community during this challenging time. We have every intention of returning to solid financial footing in the days ahead," she said.
A Section on 07/18/2014