Panelists to request testimony on HSU

Financial reports subject of review

Arkansas lawmakers will ask numerous current and former Henderson State University employees to testify in the coming months about the university’s financial reporting discrepancies, nonpayment of invoices and possible violations of procurement law.

The Legislature’s Joint Performance Review Committee approved sending the invitations, and subpoenas if necessary, in a 15-minute meeting Thursday. The House and Senate portions voted separately and without opposition.

The committee’s review of the university will include investigating whether criminal or other legally actionable activities took place.

The audits in question for the Arkadelphia university cover the 2018 and 2019 fiscal years, largely overseen by leaders no longer working at the school.

Among Arkansas Legislative Audit’s findings: The university overstated what was likely collectible from student accounts receivable by $2.3 million.

A significant contributor to the university’s financial hardship was students not paying what they directly owed the school. Students were allowed to accrue up to $4,800 in debt before the university would prohibit

next-term course registration. Auditors found several students who accrued more than that and were still able to register, and that the university

was not actively pursuing debt collection.

Last week, those former leaders — President Glen Jones Jr. and Brett Powell, who was vice president for finance and administration — answered under oath questions from the Legislature’s Joint Auditing Committee. Committee members were dissatisfied with their answers and voted to send the matter to the Joint Performance Review Committee for further investigation.

“We’re here based on the testimony and the lack of understanding still as far as the things that occurred,” Sen. Jimmy Hickey, R-Texarkana, told lawmakers Thursday as

he presided over the Joint Performance Review Committee meeting.

After the meeting, Hickey said he plans to ask Henderson State business office employees to testify, to gather information beyond Powell and Jones. But the investigation won’t be limited to those people.

He said Henderson State has assured him that he won’t have difficulty getting employees to cooperate.

Beyond sworn testimony, Rep. Mark Lowery, R-Maumelle, said the committee should consider accessing employee emails or something that would indicate who knew what and when.

Lowery said, from watching Thursday’s meeting, that he understood lawmakers may believe the testimony on Feb. 28 had a “lack of candor on the part of the people sworn in.”

“There were fingers pointing different directions, but there really was no clarity,” he said. The committee should find out “who fell asleep at the wheel or maybe did more than fall asleep” by committing “malfeasance.”

“I believe we need to dig deeper,” he said.

Hickey anticipates four or

five meetings of testimony, but he doesn’t plan to limit it.

He’s also asked Maria Markham, Arkansas Division of Higher Education director, to find out what correspondence her staff members have had with Henderson State officials about the university’s finances.

The financial misstatements consistently painted a rosier picture of the university’s finances than was reality, audits showed. Once they were discovered, and a $5 million budget shortfall revealed, the state advanced $6 million to the university and Moody’s Investors Service downgraded university bonds, costing investors millions in the market value of their purchase.

The university won’t be able to operate on $6 million less this spring, and leaders are working out a repayment plan with state finance leaders.

The budget picture led Jones to resign and university trustees to seek outside help to mitigate a crisis, eventually voting to merge the state’s only public liberal-arts university into the Arkansas State University System.

Henderson State enrolled about 4,000 students last fall.