Henderson State University trustees Thursday approved the university's pursuit of a $3 million line of credit to cover payroll expenses in case of emergency.
The motion passed with no one audibly opposed.
The money would not be used to cover existing multi-million dollar shortfalls, said Rita Fleming, vice president of finance and administration. The university is still working out how it will cover those shortfalls.
Henderson State trustees backed off pursuing a line of credit earlier this year, under previous leadership.
Fleming told trustees that the university's cash on hand would only last the school seven or fewer days and that it's possible the university's monthly deposit of cash from the state won't occur until after employee checks must be cut.
The Arkansas Division of Higher Education and the Arkansas Department of Finance and Administration each must approve the line of credit. Then, the university can make requests for proposals from a financial institution for the line of credit, which multiple trustees noted would be difficult considering the university's existing financial problems.
The university came up $4 million short on student accounts receivable and about $2 million short on other line items last year. It received a $6 million advance from the state that will be deducted out of its monthly deposit for six months beginning in February.
Financial woes and a desire to expand university resources prompted trustees to vote to join the Arkansas State University System earlier this fall. That merger won't be complete until 2021 at the earliest, leaders expect, and it must be approved by the Higher Learning Commission, the university's accrediting agency.
Read Friday's Arkansas Democrat-Gazette for full details.