St. Augustine’s University Faces $32 Million Debt And IRS Battle

In various investigations dating back to July 2023, WRAL discovered several financial issues.

Saint Augustine’s University has been tightening its belt amid its attempts to stave off the loss of its accreditation, which would carry a tremendous penalty for its students. The IRS and the Southern Association of Colleges and Schools Board of Trustees are watching the university closely after the HBCU’s previous finance board allegedly mismanaged a $34 million budget, resulting in a $32 million debt.

“We’re still unpacking, but the biggest piece starts with our missing audits from 2021, 2022 and 2023,” Marcus H. Burgess, the university’s interim president, told ABC News in March. “A $34 million budget. There was only $130,000 that can be accounted for. So a new finance team was brought in, and they literally had to recreate all of those financials. And it took them about two years to do that.”

According to WRAL, St. Augustine’s faced the loss of its accreditation over the course of four years, from 2014-2018, when it was removed from accreditation probation and regained its accreditation.

In various investigations dating back to July 2023, the outlet discovered several financial issues, including the university taking out a $7 million line of credit, a $7.9 million lien against the university for unpaid taxes by the IRS, and employees and students not receiving employment and tuition reimbursement checks from the university early in 2024.

Dr. Christine McPhail, the university’s last appointed president, was fired in December 2023. As reported by WRAL, McPhail alleges that the university fired her after a contentious board meeting, which the university board denied, before hiring Burgess as the school’s interim president. In April, an alumni group, Save SAU, called for the resignation of the current university board.

According to John Larkins, a former board member and current member of Save SAU, the organization is looking at several things at once.

“In this coalition, besides wanting to replace the leadership at the university’s Board of Trustees, we’ve been looking at other ways to improve the university, depending on what happens with our accreditation,” Larkins said. “We’re looking at, ‘How do we set up organizations and groups to help the university get out of this substantial financial hole?’ But also looking at ways to alter the curriculum and programs at the school to make the students more successful.”

Larkins continued, “It’s been a revolving door of presidents, which creates chaos, [and] instability in the staff. They don’t know what direction the university is going in. If you keep changing the leadership or bringing in somebody new, who has different ideas on the way to do things, they just destabilize the university in our opinion. Right now, most of the board members who come on are by referrals, which tends to generate a group with the same mindset, as opposed to getting a lot of diverse views and diverse capabilities.

“The institution has been victimized; the students and parents have been victimized. They bring their young people there with high potential, make a significant investment in their careers and life…It bothers me, it really bothers me to see the university in the current situation where it’s at and may not survive.”