SC historically black tech school under fire for misspending $500K in state money
South Carolina’s only publicly-funded historically black technical college is facing fresh scrutiny after lawmakers learned Wednesday that $500,000 the state gave to the school to buy equipment was instead improperly spent on payroll.
At the same time, lawmakers challenged Denmark Technical College’s new president, Willie Todd, to help come up with a plan to turn around the cash-strapped school, on probation since December, as legislators debate its future.
On Wednesday, the state’s president of the S.C. Technical College System, Tim Hardee, told House lawmakers responsible for higher education spending that money reserved for Denmark Tech in last year’s budget paid for personnel, rather than its stated purpose of high-demand job skill training equipment for programs including welding.
Denmark Tech is one of 16 schools under the jurisdiction of the Technical College System.
“We heard testimony from them about the dire need for equipment,” said Rep. Gilda Cobb-Hunter, D-Orangeburg. “It was not the intent of the $500,000 to be spent on operations.”
The $500,000 in question is roughly 15% of the $3.4 million in state support the school received in the 2018-19 school year. It also is emblematic of a larger problem facing the school, whose dwindling enrollment and financial struggles have raised questions about whether the state should help it stay open or close it.
Serving three rural counties — Allendale, Bamberg and Barnwell — Denmark Tech has been unable to dig itself out of a financial hole while enrollment has dropped to fewer than 500 students and the school has lost hundreds more to neighboring schools.
To cover Denmark Tech’s budget shortfall, the Technical College System set aside $2 million to keep the school’s operations afloat, Hardee told lawmakers Wednesday, noting the school’s budget shortfall is currently about $900,000. Half of that was given to Denmark in December, attached with provisions including a hiring freeze and no out-of-state travel. That money would have otherwise gone to the 15 other tech schools, Hardee said.
“Fifteen other colleges wound up taking from their own budget and putting it into a contingency fund to cover Denmark Tech’s shortfall,” Cobb-Hunter said. “Enrollment is declining. The expenses are not being reduced. It’s why I am in a quandary about what the solution is.”
Those financial problems could have serious consequences if they are not fixed this year, lawmakers heard Wednesday.
The school has been put on a one-year probationary status period up from a warning, risking its accreditation through the Southern Association of Colleges and Schools Commission, Hardee told lawmakers Wednesday. The college’s next review is in December.
Hardee also said the college reports an average monthly payroll of about $480,000 and has 68 full-time employees.
Whether the college needs that many employees for its student body of about 480, he said, “Quite frankly, the answer to that is no.”
Todd told lawmakers this week his goal is to raise enrollment to 1,100 by 2021 and rebuild the college’s financial infrastructure.
“What I’m excited to do is to is to have the opportunity to rebuild the financial infrastructure of the college and also to increase enrollment and to collaborate better with the community,” Todd told The State.
Denmark Tech’s future
This year, the state’s Technical College System has requested lawmakers budget more than than $10 million for Denmark Tech.
Gov. Henry McMaster’s executive budget recommended spending $471,291 for “maintenance and care of state-owned assets.”
State Rep. Justin Bamberg, whose Bamberg district includes Denmark Tech, told The State Wednesday the state needs to step up.
“For years, the state of South Carolina has left Denmark Tech out to dry,” said Bamberg, a Democrat. “You have to ask certain people why it’s been like that. To the extent that money was used to cover salaries or operating or whatever, that’s the state of South Carolina’s fault. It’s a state institution ... and it is the state’s responsibility to make sure that it can run as it needs to run.”
That argument took center stage last spring in a lawsuit the school filed against the state’s Board for Technical and Comprehensive Education. In the suit, Denmark Tech argued while the college gets more state dollars per full-time student than other technical colleges, the area counties — some of the poorest in the state — are unable to contribute as much as others.
That lawsuit was dismissed when the Legislature ultimately decided to keep the school open.
Bamberg also expressed frustration that neither he nor Democratic state Rep. Lonnie Hosey, whose Barnwell district also includes the college, knew about the misuse of state money until The State newspaper reporter asked for his reaction.
“I should not be finding this out from the newspaper,” Bamberg said.
Other state lawmakers told The State they don’t want to see Denmark closed or changed from its technical college status.
“Absolutely not,” said state Sen. Brad Hutto, D-Orangeburg, who sat in on the budget subcommittee meeting Wednesday. “Students in every county deserve a quality technical education. They should not have to drive great distances to get that.”
And lawmakers said they want to give the college’s new president — hired just this month — a chance.
“The problem with us, House and Senate, is we’re political animals who yield to pressure and so we’ll say, ‘Yeah keep it open and not provide you with any direction, not provide Denmark Tech with any direction,’ and it’s like an instant high and then you come down off that high, and I think that’s probably what Dr. Todd is feeling some of,” said Cobb-Hunter, who supported restructuring efforts last year. “I want to be fair to him, and I don’t think it’s fair for us to put the whole burden on him to come up with a solution.”
But the revelation that Denmark Tech misused state money could raise new questions for the General Assembly this year after it adopted a budget last year that did not OK restructuring of the college, which critics argued would have ultimately closed the school.
“For Denmark Tech to close or go away ... it’s got to pass through this body (the House),” Bamberg said. “And if you want to see a fight, let something like that cross the table up here.”
This story was originally published January 17, 2020 at 5:00 AM with the headline "SC historically black tech school under fire for misspending $500K in state money."
