By Stephanie Irwin Gottschlich
Staff Writer
Published Wednesday, July 11, 2007
YELLOW SPRINGS — Accounting irregularities in Antioch University finances discovered by a recently hired chief financial officer led to Antioch College’s projected $10 million deficit, which forced the board of trustees’ decision to close the college in July 2008.
A cash flow analysis, conducted after financial officer Tom Faecke found a “five-million dollar hole” shortly after he was hired in fall, revealed the university system faced bankruptcy by 2008, board vice chair Dan Fallon confirmed Tuesday.
Fallon first made the statements Monday night, when he met with alumni at a New York City chapter meeting. His statements were a topic again Tuesday night at a town hall meeting in Yellow Springs.
Nearly 200 village residents, alumni, staff and faculty, crammed into a hot and steamy church hall, criticized the trustees’ decision and previous financial arguments for the decision to close the college.
“We can’t possibly let this happen,” said Miguel Santiago, a Dayton attorney and member of the college’s alumni board. “My kids need to come here.”
The alumni board, which is circulating a petition demanding an autonomous board of trustees for the college, has raised $525,000 for a revival fund it plans to use as a bargaining chip.
Antioch’s announcement in June that the college would close cited recent enrollment drops from around 500 students in 2005 to 300 students today and a small endowment as the source of financial problems that made it unsustainable.
Fallon told the Dayton Daily News that previous yearly audits of university finances did not detect that $5 million had been spent at some point out of restricted funds and could not be put back.
“Faecke came in and lined up the numbers and found a series of problems unfolding,” Fallon said. “It’s sort of like someone robbed Peter to pay Paul, but from a bookkeeping standpoint. There was certainly no criminal behavior, but nonetheless the numbers ended up in different columns.”
Faecke was on vacation Tuesday and not reachable for comment.
College spokeswoman Lynda Sirk, also in a separate interview with the newspaper, said she was not familiar with what Faecke had uncovered, and could not answer why previous financial officers “had a different way of looking at the numbers.”
Faecke was hired in fall “to bring some stability to the finances” along with university chancellor Toni Murdock, she said.
“Their mission is to get clarity in the finances. Tom has put his foot down and said these numbers have got to line up.”
The university may hire an independent auditor to get an accurate picture of its finances.
“I think we need to get an outside auditor in here because we’re at a point where everyone’s credibility is compromised,” Sirk said.
Fallon said hiring an independent auditor would bring more transparency in the wake of faculty criticism that trustees kept finances a secret.