Four months after a former trustee sought to oust him from office, Johnson C. Smith University President Ronald Carter said he has no regrets about the way he has run the historic campus in west Charlotte.
Carter said the school is “financially sound” and is moving along a path of “radical transformation” – a path that will leave it financially and academically stronger.
Carter’s comments, made during a 90-minute meeting with Qcitymetro, were some of his first media statements since the former trustee, Talmadge Fair, alleged last fall that the school was being financially mismanaged. Fair also accused Carter of ruling through fear and intimidation.
To buttress its financial claims, the university provided Qcitymetro with portions of audited financial statements. Monroe Miller, who chairs the board of trustees, also attended the meeting, along with Greg Petzke, the school’s chief financial officer, and Shelline Warren, financial aid director.
The JCSU documents show that, from fiscal year 2008-2009 to fiscal year 2014 –2015, the university spent $28.7 million on “unfunded aid” to assist hundreds of students whose parents could not afford tuition. Without that university assistance, Carter said, those students would have been sent home.
Carter said those annual outlays – which peaked at $6.6 million in 2012-2013 – were responsible for draining a $9.5 million unrestricted cash reserve he inherited in 2008, the year he arrived at the school.
Despite the financial strain, Carter said spending the money was a moral imperative.
“We can’t sit here and say, ‘We’ve got this money,’ and then watch a student leave for $250, or even for $1,000,” Carter said. “Do we allow those students to just go home? Do we purge them?”
At one point in 2013-2014, the school’s unrestricted cash reserves had dwindled to $35,181. (The following year it bounced back to $1.4 million.)
‘Unprecedented Financial Pressures’
Carter said JCSU takes seriously its mission to educate low-income students of color, many of whom are first-generation college attendees. Overall, he said, JCSU students come from homes where family income averages $37,000 and 86 percent receive financial aid.
Carter said JCSU is not unique among historically black colleges and universities (HBCUs), nearly all of which are facing “unprecedented financial pressures.”
In 2009, enrollment at JCSU dipped by 105 students, to 1,466, because of the so-called Great Recession. The following year, it dipped even further, to 1,331 students. But the worst was yet to come.
In 2012, when the federal government imposed tighter eligibility standards for Parent PLUS loans, JCSU was faced with losing 300 students in a single week. Carter said the school was able to save 180 of those students by again dipping into its unrestricted reserves.
“It’s coming from operating expenses,” he said. “…But it’s our commitment. It goes back to that commitment we made in 2008 that all this radical transformation is for the common good of our students.”
$1.8 Million Penalty
Not all of JCSU’s problems have been external.
Carter said the school is being forced to repay $1.8 million to the Department of Education following a federal audit of the university’s records in May 2013. The audit involved a sample of 35 student records from the two previous academic years.
The federal agency found that JCSU could not verify the eligibility of some students who had received financial aid.
Carter blamed the problem on recordkeeping, which he said had been outsourced repeatedly, with each company using its own methods to collect and store documents. Carter said the case is now closed and that the university agreed to repay the money over six years.
In a separate incident, JCSU also found itself on a Department of Education list of more than 500 colleges and universities that are subject to “heightened cash monitoring.” Critics had pointed to JCSU’s placement on the list as proof of financial troubles.
Carter dismissed those claims.
JCSU officials said the school met the federal government’s initial deadline but had to resubmit the audit because the Department of Education requested a minor chance. It was that resubmission, Carter said, that caused the agency to declare the school’s audit was late.
JCSU will remain on the “heightened cash monitoring” list for five years.
“That’s a draconian penalty for a late audit,” Carter said.
Carter said that in 2014, the federal government gave JCSU its highest possible composite financial score.
Carter said JCSU is “financially sound” and is not operating at a deficit.
The school’s endowment, which funds scholarships and programs designated by donors, grew from $47 million in 2008 to $64 million last year, and reached $66 million in January.
The university also has raised $122.5 million in a “Comprehensive Campaign” launched six years ago to pay for academic resources, scholarships, facilities, and a special JCSU fund, which pays for various needs to assist low-income students.
Carter said the school is moving along a pathway of goals laid out for him by trustees in 2008. Those goals include attracting a more diverse student body, developing new academic programs and new revenue streams, and a taking on a more visible role in the community.
Those changes have not always been popular, especially with some of the school’s older alumni. But Carter said he is undeterred.
“When I was appointed the 13th president of Johnson C. Smith University, the board of trustees made it very clear to me that they wanted to see a radical transformation,” he said.
Carter said the decision to build Mosaic Village, which provides off-campus housing, was part of that “radical transformation.” While some critics have questioned the move – the project was built on property not owned by the university – Carter called it a “good fit” for the university and the community.
“We saw a lot of our students out at University City,” he said. “So if we’re going to have a vital campus, we’ve got to bring these students back. They don’t want to live on campus. We’ve got to give them an option, so Mosaic Village served that option.”
As a “totally engaged” trustees chair, Miller said he spends considerable time talking with faculty, students and administration. He said he understands the angst that some faculty and alumni have expressed. However, he said, he continues to have confidence in Carter’s leadership.
As HBCUs continue to lose their monopoly on black students, he said, JCSU had no choice but to engage in “radical transformation,” which has meant recruiting diverse students, hiring new faculty, launching new degree programs and instituting online and adult learning.
Over time, Miller said, these changes will pay dividends for JCSU, leaving it better situated to compete in the 21st century.
“It’s not something you just kind of impulsively do,” he said. “It is hard. It’s difficult. For the people who are involved in it or affected by it, it’s disruptive. And for some people it’s threatening. So it takes courage to say we’re going to stay the course.”
Miller said he has told the board of trustees that the process of “radical transformation” on the campus will be completed in 2017.
“It’s like flying an plane – it’s been airborne for seven, eight, nine years,” he said. “We’ve got to land on some runway.”
Meanwhile, Carter said he has no regrets about the way he has handled the school’s transformation, including his level of engagement with critics.
“My commitment is to addressing the overall goals of the university, and that’s what I engage in day to day,” he said.
Carter said time will be the judge of his effectiveness.
“You would have to ask me that question maybe 10 years down the road when everything is seeded and I myself can look back and see it all,” he added. “…That question can be answered only when you are able to stand back and see all that has been accomplished.”