A regional accrediting agency has signed off on Henderson State University's merger into the Arkansas State University System.
The Higher Learning Commission approved the merger Thursday, after monthslong review, meetings and a campus visit.
Accrediting agency approval was one of the final steps before the merger, and administration of the institutions had been preparing for it for months since trustees approved pursuing the merger last fall.
Home to more than 3,000 students this fall, Henderson State is one of Arkansas' oldest public institutions. It has faced financial struggles in recent years, including razor-thin margins, little in reserves, outstanding debts from students and late payments by the university to its vendors.
The ASU System has helped the university cut millions of dollars from its budget and continues to work with the university on more adjustments after an unanticipated 11% enrollment drop from last fall to this fall.
"We look forward to continuing Henderson's rich traditions and mission of service to students as a member of the ASU System," Henderson State University Interim Chancellor Jim Borsig said in a news release. "I am confident that this affiliation will continue to strengthen Henderson, and I am grateful to the Higher Learning Commission for confirming this important step in the process."
Before the merger is final, the Arkansas Legislature must dissolve Henderson State's board of trustees and expand the ASU System's board by two seats, from five trustees to seven. ASU System President Chuck Welch has looked at January for making the merger final, and the Legislative session begins early that month.
The approval wasn't without hiccups.
The institutions met the commission's "five key factors" for merger, but the commission's board of trustees raised concerns about a recently released state audit with 15 findings in Henderson State University's financial aid office.
"The Institution has undertaken several remedial measures in response to the state audit, but the efficiency of these measures remains to be evaluated," Barbara Gellman-Danley, president of the commission board, wrote in a letter to Borsig.
Still, the board determined Henderson State and the ASU System can move forward with the merger. But Henderson State must host a visit in the next six months to demonstrate the recent remedial measures in financial aid administration "and their impact on the Institution's ability to meet the expectations articulated in Criterion Two, Core Component 2.A related to operating with integrity in financial functions."
Leaders of the institutions told lawmakers last month that the university's financial-aid office is nearly adequately trained and equipped to properly manage student financial aid and more quickly process verifications.
[DOCUMENT: Letter of approval » arkansasonline.com/1111approval/]
Arkansas Legislative Audit had issued 15 findings of apparent regulatory violations at the university's financial-aid office in a report presented to the Legislative Joint Auditing-Educational Institutions subcommittee. After a small amount of discussion about the progress the university had made, the subcommittee approved filing the audit Thursday.
Auditors found, among other things, that the university failed to reconcile accounts and often improperly awarded or used federal financial aid.
Those findings pertained to two fiscal years, from July 1, 2017, through June 30, 2019. During that same time, delays in financial-aid verification had frustrated students, parents, educators and community members who had urged students to attend the university.