Oversight Committee on Education hears update on financial struggles of Alderson Broaddus University
By Matthew Young, RealWV
CHARLESTON, W.Va. – The August Interim Session began Sunday with a meeting of the Legislative Oversight Committee on Education Accountability, who received an update from W.Va. Higher Education Policy Commission Chancellor Sarah Armstrong Tucker regarding the financial calamity which has befallen Alderson Broaddus University.
“Alderson Broaddus has been on provisional authorization because of their finances with the (Higher Education Policy) Commission for over a year-and-a-half,” Tucker told committee members. “We have talked pretty openly about concerns with their finances for several years, and we’ve been concerned whether or not they had the ability to stay afloat.”
According to Tucker, late in 2022, the previous leadership team at Alderson Broaddus inferred their intention to close the university after September of this year due to their “out of control” financial situation. Since that time, however, the university’s president and all members of the board of directors had been replaced, with the new leadership team opting to keep the university open.
“At that point, we were to re-authorize them in June based upon the finances that I had received,” Tucker said. “It was very inconsistent financial information. There was simply no way that the commission was going to be able to do that, so they pushed that meeting, and asked for additional financial information.”
Tucker explained that the university informed the commission of a $1.1 million federal tax credit which they would be receiving.
“We were actually told that that tax credit had been sent in by the IRS erroneously to the university, and the university had mailed the check back and was expecting to receive the real check anytime soon,” Tucker noted.
“We were also told that the board-chair was going to resign her position on the board because she had become disfavored by other board members,” Tucker continued. “As a result of that, the university would receive $500,000 in donations.”
“Neither the refund, nor the $500,000 in donations have come to fruition at this point,” Tucker added.
According to Tucker, the university’s cash-flow projections included the $1.1 million in tax credits for the month of July.
“If they had received that $1.1 million, their cash-flow at the end of July would have been $609,000,” Tucker said. “But they did not receive it, so that means that their cash-flow was negative $500,000.”
Tucker further explained that Alderson Broaddus has “significant long-term debt” in excess of $30 million, including multiple lines of credit, and a more than $800,000 debt to the City of Philippi.
“They owe Sodexo, which is a food service company, nearly $2 million,” Tucker noted, adding that the university did pay the City of Philippi approximately $67,000 in order to avoid termination of utilities. “It took a very vigorous fundraising campaign for them to raise that $67,000.”
“I can keep going on about these financial issues, but at the end of the day, the conclusion we came to was that this institution was not going to be able to stay open for this semester,” Tucker said. “There was no financial-indicator that caused us to believe that they were going to be able to stay open. So the commission met on July 12, and then again two weeks later. At that meeting the commission voted to revoke the authorization for Alderson Broaddus to confer degrees in the State of West Virginia. They’re allowed to teach-out any students who can graduate by Dec. 31 of this year.”
Tucker praised West Virginia’s other institutions of higher learning for “stepping up” and transferring Alderson Broaddus students into their programs.
“We believe most of those students have now been transferred,” Tucker said. “ Our main issue now is our first year physician assistant (PA) students – I believe there are about 8 to 10 of those students. AB (Alderson Broaddus) starts their PA cohort in May, which is before any of the other institutions in the state.”
“There is a cap on the number of PA students you are able to take, and all of our institutions which offer those programs are at their cap for first year students,” Tucker added. “That’s the group of students I’m most concerned about right now.”
The Legislative Oversight Committee on Education Accountability is next scheduled to meet during the September Interim Session. RealWV will provide updates regarding Alderson Broaddus University as additional information is made available.
