GEORGETOWN, Ky. (ABP) — Georgetown College has been placed on a one-year probation by its accrediting association due to financial concerns.
Georgetown officials expressed disappointment with the action by the Southern Association of Colleges and Schools, noting they have made recent progress in addressing the school's financial challenges.
SACS is the primary accrediting body for higher education institutions in an 11-state region and Latin America. It has 787 accredited schools, including 14 on probation, according to the association's website.
SACS' Commission on Colleges placed Georgetown “on probation for good cause for 12 months.” The report states that the school “failed to demonstrate compliance” with the requirement that “the institution's recent financial history demonstrates financial stability.”
On the positive side, probation “with good cause” means the school “has demonstrated significant recent accomplishments in addressing non-compliance” and has provided evidence to indicate “it will remedy all deficiencies within the 12-month period,” the report adds.
Georgetown College President Bill Crouch said, “We're very disappointed at being put on probation, but we're not panicked and it's not putting us in any different situation than we were.”
Janice Shelton, who chairs Georgetown's board of directors, noted, “We're disappointed because we don't believe it is a full picture of where we are.”
Emphasizing that she “would never minimize” SACS' action, Shelton added, “After the economic downturn, every private institution has had difficulty. I think part of their concern was restoration of endowment funds, which of course is occurring.”
Georgetown's probation follows a two-year monitoring period by SACS officials. “The institution was placed on probation because it had reached the end of its maximum allowable two-year monitoring period without demonstrating complete compliance with the (SACS) Principles of Accreditation,” the report states.
Crouch said part of Georgetown's financial concerns can be traced to the nation's economic downturn after the Sept. 11, 2001, terrorist attacks.
From 2001 to 2003, Georgetown's net assets declined by more than $16.5 million, from $61 million to $44.5 million, according to published audit reports. Net assets increased by almost $4 million during the school's 2003-04 fiscal year, but still reflect a net loss of more than $12.6 million since 2001 for a net asset decrease of 20 percent.
The school's long-term endowment, which topped $30 million in 1998, dropped to $21.2 million by 2002. Endowment has increased each of the past two fiscal years, reaching $24.6 million last year.