The idea that Henderson State is receiving enough federal funding to cover any state budget cuts or other revenue shortfalls resulting from covid-19 is a myth, said Arkansas State University System officials.
The Arkansas Legislature in March sent two bills to Hutchinson to allow him to take $173 million from a “rainy-day” fund to help fill budget holes caused by the pandemic. He signed them, and the money is being distributed.
On Friday, two lawmakers — Sens. Bart Hester, R-Cave Springs, and Jim Hendren, R-Gravette — refused to sign off on money intended for Henderson State. Out of that $173 million, the school was expected to receive $825,000.
Two of three Senate leaders were needed to approve the allocation, but only one did.
In July, Glen Jones Jr. resigned as president of Henderson State because of mounting debts the university accrued during his leadership. The money woes caused trustees to vote to merge the university into the Arkansas State University System.
Arkansas State University System spokesman Jeff Hankins said in an interview Sunday that the proposed funds belonged to Henderson State alone and would have no benefit to Arkansas State University.
“Also, Henderson is not yet part of the ASU System,” Hankins said.
Hankins said the idea that the federal funding from the Coronavirus Aid, Relief, and Economic Security Act would cover the shortfall in budget for Henderson State is also false.
Hankins forwarded the Arkansas Democrat-Gazette an email from Welch sent to legislators earlier this month to address the “myth” circulating that their institutions were receiving enough federal funding to cover any state budget cuts or other revenue shortfalls resulting from covid-19.
“This is simply not accurate,” Welch said in the email. “Not only does the federal funding not cover our losses, the limitations currently in place on the funds are extremely restrictive.”
Henderson State stands to receive a total of $3,767,931 in CARES Act funding.
Arkansas State University System President Chuck Welch said this amount is divided equally between direct student aid and institutional purposes. He said at least one half of the funds must be distributed directly to students in the form of emergency grants.
The funds may not be used to pay student account balances owed to the institution or for any other costs associated with the disruption caused by the pandemic. The funds must go directly to the students in the form of emergency grants.
Welch said this leaves a total of $1,883,965 which may be used for other institutional purposes. He said if Henderson State could use the entirety of the $1,883,965 to cover revenue loss the gap would still be $891,125.
“Unfortunately, this is nowhere near the case,” Welch said in the email. “In the cover letter from the federal Department of Education (DOE), Secretary DeVos writes, “Section 18004(c) of the CARES Act allows your institution to use up to one-half of the total funds received under Section 18004(a)(1) to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus.”
Elaine Kneebone, acting president of Henderson State University, and Welch plan to provide the campus a financial and operational update Monday at 10 a.m.
Read Monday's Arkansas Democrat-Gazette for the full story.