June 10--South Carolina State University has drawn out about $847,000 of a $6 million loan approved by the S.C. Budget and Control Board on April 30.
Scott Hawkins, the agency's public information officer, reported on Monday that the budget board has made two cash transfers to the university, $600,000 to meet recent payroll expenses and $246,903 for debt service.
Hawkins noted that up to $500,000 of the loan is to be used by the budget board to retain auditing/consulting services to assess the university's financial needs and management.
The university has applied for the remainder of the loan to be spent in the following order of priority: debt service and other secured obligations, payroll and other critical operating expenses, and vendor payments.
Earlier, S.C. State President Thomas Elzey reported that funds were reserved for payroll through June and would not have to be taken from the loan funds. However, at a recent board meeting, he told trustees there had been a "miscalculation" and monies were being drawn down from the loan for payroll as well as debt service.
Hawkins said the budget board is working to verify how much the institution owes to vendors and which invoices meet standards set up by the board's April 30 resolution authorizing the money for S.C. State, he said.
He reported that "the board continues to work with SCSU to monitor their cash-flow situation to ensure that the university will be able to meet its payroll and debt-service obligations. This will be an ongoing review," he said.
S.C. State has operated with a deficit for at least eight years.
In February, Elzey reported to the budget board that he anticipated the university would end fiscal year 2014 with a deficit of more than $13 million. He called on the Legislature to appropriate funds to pay it off.
The April 30 loan, called a "Band Aid" by some, was designed to help the university meet its most pressing bills while waiting on the Legislature to take action on the university's request.
The $6 million must be collected by the university before the end of June, and the university will have to begin repaying the loan by the beginning of the 2015-16 school year.
Last week, the Legislature passed a bill creating a committee to create an accountability plan and specific steps to ensure financial stability at S.C. State. The bill also provides bailout money for the university once the accountability plan is in place.
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