Saint Augustine University in Raleigh, North Carolina, is in an ongoing battle with the IRS and the Southern Association of Colleges and Schools board after the historically black school’s former finance department “mismanaged” a $34 million budget, university officials say.
Historically, Black colleges and universities (HBCUs), both public and private, have been underfunded due to lower endowments, less alumni support, and underinvestment at the state and government level federal.
Recently, HBCUs have faced several challenges. During a funding crisis, Tennessee State University saw its board of trustees eliminated as part of a complete overhaul by state lawmakers. In Mississippi, lawmakers proposed a bill that would have closed the state’s only public HBCUs.
Now, teachers and staff at Saint Augustine’s have not received a salary for three months, following the institution’s $32 million debt. The dire financial situation puts the university at high risk of losing its accreditation, a crucial aspect of its credibility and reputation.
“We’re still unpacking, but the biggest piece starts with our missing 2021, 2022 and 2023 audits,” St. Augustine’s interim president Marcus H. Burgess told ABC News in a March interview . “A $34 million budget. There was only $130,000 that could be accounted for. So a new finance team was brought in, and they” had to literally recreate all of these financial statements. And it took them about two years to get there. »
Saint Augustine University’s accreditation appeal has been denied.
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Christine Johnson McPhail, the former president of Saint Augustine University (SAU), was fired on December 3, 2023, when the Southern Association of Colleges and Schools Board of Trustees voted unanimously to revoke the status of Saint Augustine as an accredited institution. On Feb. 20, the school had an appeal hearing with the board of trustees. The committee that heard this appeal rendered the decision to dismiss McPhail.
ABC News contacted McPhail’s attorney, who declined to comment on SAU’s financial problems.
Dr. Christine Johnson McPhail is the 13th president of Saint Augustine University in Raleigh, North Carolina on March 18, 2022.
Mauricio Richardson
“We are not at liberty to discuss the financial condition of Saint Augustine University. We believe that Saint Augustine’s termination of Dr. McPhail is unrelated to the financial condition of the school.”
According to the Southern Association of Colleges and Schools Commission on Colleges (SACS), the university’s accreditation is currently suspended due to financial and governance issues. The institution was placed on probation and, in response, the university sent an arbitration letter to SACS on March 11. The school will retain its accreditation until the arbitration process is completed, according to a statement on its website.
“That gave us 90 days. So in that 90 days, we’re still accrediting it,” Burgess said. “This allows our seniors to earn a degree from an accredited institution.”
If SAU loses its accreditation, 85 percent of its students will lose financial aid.
“Transferring is just not something I would have ever thought about,” said SAU student Tinaya Eason. “And I’m still thinking about it. Nothing’s really finalized yet.”
The SAU must raise nearly $32 million to pay its debts and remain operational.
The university received a nearly $7.8 million tax lien from the IRS for unpaid payroll taxes dating back to 2020, putting the university’s financial stability at risk.
Due to school debt, Burgess and her team have been working without compensation since February.
“The staff hasn’t been paid, but they’re still fighting for this institution,” Burgess said. “They continue to teach our students. They want to see this class make it to graduation day, but they are hurting.”
Despite the outpouring of support from alumni and donations from the community, the amount raised is barely enough to solve the problem.
“We need capital and liquidity,” Burgess said. “I don’t want to have to sell our land. In the black and African American community, we know how difficult it was to get this land.”
“I remember my senior year forever: $1,200 is what I needed to graduate,” Burgess said. “One of our board members, Barrett Jackson, was on campus and handed me an envelope containing several checks from his Sunday school class. And he told them about this young man from Claflin University who just needed a chance I am a living testimony to why you should always be looking to help someone. We need this opportunity.
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