Following his resignation on the heels of Georgia Perimeter College's massive deficit earlier this year, former president Anthony Tricoli said he feels vindicated after a special audit found that the deficit didn't fall solely on him.
A September audit by the University System of Georgia found that although Tricoli initially alleged fraud by his fellow former employees following the announcement that the school had to make more than $25 million in cuts to balance this school year's budget, auditors did not find any instances of fraud.
"We concluded that senior GPC administrators failed to perform certain key fiduciary duties," the September audit stated. "Chief among these fiduciary duties was responsibility to understand and manage the institution's fiscal affairs. Responsibility for the institution's management rests with the president." The audit concluded that Tricoli's and other administrators' emphasis on enrollment growth and program expansion took precedence over sound fiscal practice as management and leadership priorities.
However, according to legislative Representative Karla Drenner, "GPC's former fiscal leadership team relied on inaccurate, internally generated spreadsheets that did not correspond to the General Ledger. Specifically, it appears that members of GPC's cabinet, to include the former president, and both the president's council and the strategic budget committee were provided incomplete and inaccurate budget presentations made by the CBO and the budget director at various group meetings... To summarize, it cannot be determined where the budget was overspent because it was not allocated correctly and contained errors and omissions... It is clear from our review that GPC's CBO did not provide GPC's president with timely and reliable financial information for the president's use in managing the institution."
Tricoli said Thursday that University System of Georgia Chancellor Hank Huckaby initially contacted him and offered him a position at the state level if he would step away from his position at GPC. Tricoli said he agreed to do so and within days of making the agreement, the chancellor called him back and told him there was no other position for him.
"I would have thought that the chancellor and the board would have wanted the facts of the situation to be known by them before they made a decision to not renew my contract," said Tricoli.
"I think the findings stand on their own whether or not people believe whether or not I was inappropriately treated by the university system... Their actions were certainly not in line with the findings," he said.
"Each year, the University System holds budget hearings with each college president and the college leadership team to review how the college is doing financially. During each of the years between 2006 and 2012, not one time did the USG Chancellor, two-year college sector head, vice chancellor for fiscal affairs, associate vice chancellors, or USG Auditors ever indicate they had any concerns about GPC's budget, not once, never. The University System called these hearings and led these budget hearings annually, and they asked dozens upon dozens of questions, but they never once raised any concerns about GPC's budget.
"Yet the associate vice chancellor for fiscal affairs told me on April 26, that the office of fiscal affairs knew for three years that GPC's budget director was spending down the budget. Nor did they tell me he was inappropriately managing the budget, or that he misreported and misrepresented the facts of the budget to me and the college's executive team," said Tricoli in an email.
"The University System staff has a responsibility to communicate these issues with the college presidents, especially if they are going to hold college presidents accountable for information the University System had for three years. I agree with what many have said over the past eight months - the University System's budget oversight process failed GPC, it was weak, insufficient and ineffective and if they had been on top of their game none of this would have happened at GPC. At any point between 2009 and 2012, the University System could have stopped this situation at GPC from occurring with one phone call to me. The fact that on June 5, the chancellor completely rewrote the USG's budget oversight process should communicate to all that he recognized the USG's budget oversight review process was a failure, and it was that process that enabled the situation at GPC to occur in April of 2012."
Tricoli denied that his sole focus during his time at GPC was in growing enrollment as some have suggested, saying he focused instead on increasing access for students who wanted to come to college. The enrollment grew from 13,000 students to 27,000 during his tenure. It has since fallen to roughly 24,000 students.
"When you run an operation the size of GPC with 27,000 students, five campuses and 3,000 employees and a budget $170 million, it is a very complicated organization to lead. As a result of those issues that surface it is reasonable that I should have been able to rely upon the data that was presented to me by the budget team to be accurate. It was not reasonable for me to assume that the budget I received from the budget information team was false. Nor that the human resources office was mismanaging calculations of fringe benefits for every single employee at the college," he said.
Tricoli is currently working with other college leaders across the country to assist them in some consulting services.
"I'm in the process of looking for a new position. I love the job and the work of leadership in higher education and I would like to continue that work at some administrative level at a college or university in the future," he said.
"I have tremendous respect for Representative Drenner and I am pleased that she has the fortitude to stand on the principle of truth and justice, as well as being innocent until proven guilty."
SACS sanctions
This year has been tough on Georgia Perimeter College, and the latest bad news came this week when the college was sanctioned by the Southern Association of Colleges and Schools after an audit found the school was operating with a $25 million budget shortfall caused by chronic overspending and lack of financial oversight.
The Atlanta Journal-Constitution Tuesday reported the college is still accredited, but has been warned because of the financial shortfall and lack of fiscal oversight.
GPC is the state's fourth-largest public college with an enrollment of around 27,000 students at campuses in Alpharetta, Clarkston, Decatur, Dunwoody and Newton County and online. The college is a popular option for many students who attend in order to get their core classes out of the way prior to transferring to another institution.
In May, former president Anthony Tricoli resigned as president following the disclosure that the school had a roughly $9 million shortfall at the end of the 2011-2012 school year and a projected $16 million shortfall for the current school year. Months later, the college was forced to reduce its staff of 3,000 by 282 employees, including 26 from the Newton campus.
Adding onto the situation was a required 3 percent cut from all state agencies, which trimmed another $1.6 million from spending.
In addition to a cut in state funding, the school could see less in tuition fees as well. The Board of Regents instituted a new requirement for learning support students, creating a cutoff score for reading and math. Those students who fall below a score of 78 in reading, a 60 in English and/or a 40 in math, must take learning support classes at a technical college before attending a university-system college.
What happened?
The college has been spending beyond its means for several years. Reserve accounts have been wiped out by overspending over the last several years. At the end of fiscal year 2009, GPC had $20.7 million in reserves. That dropped to $12.4 million with just $4.9 million heading into the 2012 fiscal year, in spite of $42.4 million in revenue growth over the last four years.
Despite the obvious overspending, each member of GPC's former financial team claimed to be unaware of the overspending, according to an audit done in September, essentially passing blame down the line. However, the audit found that officials not only should have known but could have prevented the issues.
The audit, conducted by University System of Georgia officials, was long-awaited as school officials and the public sought explanation for how the school ended up having to make more than $25 million in cuts to balance this school year's budget, according to a previous story in The News.
"In summary, GPC's fiscal challenges were preventable. The shortfall in any given year leading up to fiscal year 2012 was not insurmountable. Management attention to GPC's actual spending would have allowed the institution to curtail the growth in spending," the audit stated. "Unfortunately, key leaders at every level charged with actual responsibility for GPC's fiscal management did not exercise all of their assigned duties."
"We concluded that senior GPC administrators failed to perform certain key fiduciary duties," the audit stated. "Chief among these fiduciary duties was responsibility to understand and manage the institution's fiscal affairs. Responsibility for the institution's management rests with the president."
The audit's conclusion is what many suspected - namely that Tricoli and other's "emphasis on enrollment growth and program expansion took precedence over sound fiscal practice as management and leadership priorities."
That financial responsibility and blame, also rested on the chief business officer, assistant vice president for financial and administrative affairs and the budget director.
However, state Representative Karla Drenner recently defended Tricoli's responsibility in the fiscal fiasco.
"Several statements made in the final audit report suggest the problem was not solely at the presidential level. Other departments suggested to be involved were the human resource and budget offices," Drenner said in a statement. "GPC understated the fringe benefits that corresponded with each employee on the payroll. This understatement has been estimated at $6.7 million."
Drenner said that since both the human resources department and the budget office both reported to the same vice president, the problems with budget is centralized "in this one area under this one vice president."
"Presidents in all organizations are ultimately responsible for the organizations in which they have been charged to run but, presidents must rely upon their staff to provide them with accurate information, so the best decisions can be made in a timely fashion," she said.
Based on numerous interviews conducted by auditors, each official ultimately held another official accountable for the fact budget deficits were going unnoticed.
What happens now?
Since the University System of Georgia's September audit found that the school's senior fiscal leaders either ignored or didn't notice the school's dire financial straights, the school has been given one year to resolve their issues. A warning was issued to the school earlier this week.
"A warning is not unanticipated in this situation," said Barbara T. Obrentz, chief public information officer for GPC, in a press release. "It is expected that the college will be able to demonstrate to SACS that these issues have been completely resolved within 12 months.
"Georgia Perimeter College has already made
"Notable strides to correct budgeting issues and return the institution to solid financial footing," Obrentz said in the release. "We will continue to implement and strengthen the controls put in place during the summer of this year so that we may resolve any remaining deficiencies and bring the budget back into balance... We value the standards that SACS sets for its members. These standards allow us to achieve our mission as Georgia's largest access institution."
Although the college has retained its accreditation status, making sure they comply with the issues raised will determine if they receive just one warning, or two. A second sanction could mean that the school is placed on probation, according to the SACS website.
Obrentz added in a message Thursday that the school's budget office is addressing each individual issue SACS has and looks forward to regaining full accreditation at the end of that time.
