Omissions and inaccuracies marring Gila Community College’s recently passed budget are leading some board members to fear for the college’s credibility.
A county attorney is looking into the matter. However, the budget debate has reactivated old fissures on the board as votes and political maneuvering pits north against south.
Recent problems have also forced into view the painful limitations board members face because they have little power to make decisions. Eastern Arizona College runs GCC because Gila County does not have the legal authority to operate its own college.
GCC’s latest problems include a deficit of unknown magnitude — anywhere from $500,000 to $2 million — and omissions in the budget, including blank spaces where tuition revenue should be listed.
In mid-June, the board passed a $6.17-million budget that listed $2.1 million in reserves. Eastern Arizona College Chief Business Officer Tim Curtis said at the time that the money was not actually there, and that he guesstimated many of the budget’s numbers because of legislative uncertainty. When asked how much money the college had in reserves, he said, “little if any.”
However, board members Larry Stephenson and Tom Loeffler both said they were under the impression that the college did have $2.1 million in reserves, and were shocked just weeks later when Senior Dean Stephen Cullen told the board the college actually had a $2 million deficit. The purported deficit has since shrunk to $500,000, although nobody knows the true number. The board will hold a work study session soon to discuss the topic.
The budget the board passed was the budget published in the Roundup newspaper for public perusal, and Loeffler worried about misleading taxpayers. Also, if inaccuracy becomes a larger issue, state and federal money could be at risk. He says the best solution is to conduct an audit.
Loeffler showed the budget to various school administrators, bankers and accountants.
“The comments ranged from misrepresented to fraudulent. I would prefer to use the term misrepresented, because I do not believe any misdeed is intended,” he wrote in an outline of points to the board.
Stephenson is also frustrated. “I have to go with those numbers that came from EAC,” he said.
“We have to go on trust at a certain point.”
Board chairman Bob Ashford did not respond to a request for comment.
It’s unclear if GCC has the authority to hire an auditor, and it likely cannot hire its own financial manager. GCC staff are technically EAC employees.
At a recent board meeting, members discussed conducting an audit to preserve credibility, however, the topic was listed for discussion only and no action was taken.
County Attorney Bryan Chambers is investigating whether the published budget’s vacant spaces violated any laws.
Cullen said at the original budget hearing that tuition figures were unavailable. Curtis, who created GCC’s budget, said previously that he doesn’t list the income because EAC receives tuition fees directly. Curtis did not return calls for clarification before press time.
Still, several GCC board members say they want to see the figures on paper.
A budget must account for the “total amount of revenues by source,” according to a state statute that Loeffler found.
The budget contained several other inaccuracies.
Besides the deficit question, this year’s budget lists the wrong number for last year’s spending ceiling, and Curtis listed an erroneous figure for state capital funds for 2008/09 on this year’s budget — $133,000 is listed, although Curtis said the correct number is $0.
Although the errors are seemingly minor, they could cast doubt on other numbers, as well.
The deficit prompted EAC to furlough GCC employees four days each month to save $526,000. “They’re concerned about not getting paid, and rightfully so,” Stephenson said.
“They’re also the ones that got us into this.”
In the budget, expenses are also not broken down into spending by program. Blank spaces remain after expenses for instruction versus student services and academic report. The sole expenditure listed is the $5.9 million that GCC will pay EAC for operating the school.
Meanwhile, EAC is building a $2.5 million nursing facility and received the most per-student state funding of any other rural community college in the state, before budget cuts. GCC receives less than half of what EAC receives per student, and must pay the college 25 percent overhead on all expenses.
Stephenson has repeatedly asked for the board to receive summaries of regular financial statements that he says are too detailed to provide an overview. The documents reveal how much the college spent on pencils and notebooks for administration, Stephenson quipped, but not how large the deficit is.
Despite frustration in this house of mirrors, Stephenson said positives have appeared.
For the board to decide on its own to recently raise tuition 30 percent and eliminate some wavers for senior citizens, they engaged in defining their future. The recent furlough stands in contrast because EAC decided and GCC followed.
Although the tuition vote was divided — north versus south, three votes to two — it still demonstrates first steps toward existing independently, Stephenson said.
Board members have spoken often about the need to develop a plan for gaining independence, but have taken few concrete steps toward turning the idea into reality.
At a recent meeting, board members agreed they needed to raise tuition, but disagreed over how. Southern board members agreed with the percentage increase. Northern board members, Stephenson and Loeffler, lobbied for a dollar increase based on credit hours.
Stephenson called the difference a “philosophical” one. However, the philosophies diverged along geographic boundaries.
The college board has a history of this geographic divide, and when board member Don Crowley resigned in January for health reasons, the county schools superintendent who picked Loeffler as his replacement said she wanted someone who could increase board unity.
Whether GCC’s rifts are too imbedded to overcome remains unknown, but the college’s quest for independence could turn on whether board members can join forces.
Divisiveness has already impeded the journey, Stephenson said. He pointed to another north/south vote — the decision to extend GCC’s contract with EAC before it even expired.
The board voted on the new contract because it decreased the college’s overhead costs and saved $300,000. Stephenson, who says he’s pro-GCC and not anti-EAC, hopes the contract can be re-negotiated to allow GCC to perform some functions like registration.
The move would allow the college to incrementally take on responsibilities and work toward independence.
“The contract right now precludes us from doing it in steps,” Stephenson said. He hopes this experience will become a catalyst, spurring long talked about change.
It has, already, illuminated substantial issues that Loeffler and Stephenson are determined to solve.