H.O.P.E. Center directors were apprised of the "serious" nature of the center's finances during a meeting with representatives of the state office of the Comptroller and the Department of Finance and Administration - Division of Mental Retardation Services on May 1. The local center's finances have been the subject of an audit by the Department of Finance and Administration and the Comptroller of the Treasury in recent months.

Mary-Margaret Collier, Director of the Division of Bond Finance of the Comptroller of the Treasury and Sandra Sturgis with the Department of Finance and Administration, Division of Mental Health attended the meeting to relate some of their findings and to set a new deadline to comply with the internal financial controls and to correct the serious cash flow problems being experienced by the center.

"We want to work with you if possible," said Sandra Sturgis. "Your care has always been good quality care." She added that the state was "not here to run" the center.

The center provides a multitude of services for mentally challenged adults including work enclaves, transportation, and residential services. H.O.P.E. is an acronym for Helping Our People Excel. The organization operates from headquarters on Paris Avenue, Huntingdon and has group homes in McKenzie and Huntingdon.

In a surprise to board members, the representatives announced that a requested extension of the center's payment schedule on a "pooled" loan with the state had been denied. The outstanding balance on that loan is approximately $259,289. The representatives said the loan extension was denied after the state comptroller's office learned of a second lien against the center's real estate by the Internal Revenue Service to secure unpaid payroll taxes totaling more than $350,000. If granted, the "pooled" loan extension to 18 years would have reduced the center's monthly payment from $7,803 to less than $2,000, providing needed cash flow to better manage the center's finances.

Ms. Collier said the center was $32,979.84 in arrears on its "pooled" loan. She described the center's payments as "irregular" in nature adding that the center had been in arrears as much as 7.5 months. The H.O.P.E. Center is the "only center" in the state having this kind of financial problems, said Ms. Collier. All others are current or near current on their loan. Their respective state departments asked the two representatives to come back to Huntingdon to talk to the board, but noted it was not the state's responsibility to solve the center's financial problems. "The loan is in default," said Ms. Collier, who added the board needs to make plans to correct the situation.

"This is my first knowledge of this," said Barbara Gray, Executive Director of the H.O.P.E. Center. She said she had not received such information.

"I understand," said Ms. Collier, who added that the center was aware of the loan situation at the first of April and the amount should not be a surprise to anyone. "Research takes time," responded Ms. Collier to Mrs. Gray's statements. She noted that the Ms. Sturgis' staff, the Attorney General's office, and several lawyers had reviewed the situation. She said the lawyers had opined that a change in the payment schedule on the loan would relegate the state's first lien position to that of a second lien, behind the I.R.S.

"I am surprised," said Mrs. Gray of the amount.

"We have no knowledge of (state) audit findings," said Marie Burzler, who added it's hard to develop a plan of action without knowing the specific findings.

Laddie Lollar, PhD, who serves on the center's Financial Oversight Committee said the committee was first approved in July 2001. The first three attempts for the committee to meet were not possible. "We have been constantly stymied," said Lollar. "We can't get figures that are reliable." In some meetings, Lollar said the committee was presented two sets of financial reports that did not match. "I can sympathize with you - you don't have facts, we don't have facts," Lollar told Ms. Sturgis and Ms. Collier. Lollar said the Financial Oversight Committee is strong, however, their recommendations have been voted down by the full board. He noted he had questioned the auditor, Mr. Charles McLean of Memphis about errors in the accounting. "I welcomed the auditors from Nashville," said Lollar of the team that came from the Comptroller's office to conduct an independent audit. Lollar said the Financial Oversight Committee has had difficulty getting accurate accounts payable reports. Often times, the amounts were understated - a fact discovered after the committee conducted some random checks of creditors. Some of the larger creditors were understated by as much as $6,000 to $8,000, said Lollar. "It seems we are being bluffed."

"We are attempting to get a true balance," said Mrs. Gray of the accounts receivable. She noted the fluctuations in balances were because the center had paid some of the creditors.

Ms. Sturgis noted that the required financial control conditions set out in her February 7 letter to the board had not been met. She said her department had asked for "internal control changes." Specifically, the center has not provided (1) monthly review of requisitions, payroll, payroll taxes, employee health and retirement contributions, monthly IRS payments, pooled loan payments and the approved operating budget by a qualified party external to the agency's management; (2) delineated by policy the finance committee's role and responsibilities; (3) arranged for training for board members from an organization acceptable by the Department of Mental Retardation Services (DMRS).

Mrs. Gray said a training session for the board had been scheduled but cancelled by the trainer. She also noted the April 30 payroll did not clear the bank because state funds were not directly deposited in the account on that day as indicated. Henceforth, she said she would wait until the first day of each month to distribute payroll checks.

The memorandum from Sturgis questioned "whether the financial information provided to DMRS is a 'complete and accurate representation of the agency's financial position'. It also recommended the board to consider a management contract with an experienced and successful agency to assume financial control of the organization.

Ms. Sturgis said the money is wired by the first day of each month. The payments are paid in full for services provided 60 days earlier. She noted that the center has a stable population and the payments vary little from month to month.

Mrs. Gray said the fluctuations in reimbursement are as much as $20,000 to $25,000 monthly.

Chairman Burzler requested additional time to meet the mandates, especially in light of the recent resignation of newly appointed internal bookkeeper Linda Reynolds. The new bookkeeper is supposed to be on duty by mid-May. The representatives from the state were unyielding on the compliance dates. (1) The plan of action must be in writing and delivered to the state no later than May 16, 2002. (2) The proposal must demonstrate that the state will receive all payments due under the loan agreement; (3) the proposal must demonstrate that the state's lien position is maintained; (4) depending on the proposal, the center may need to get an endorsement to the title policy insuring the state's lien position; (5) the center must demonstrate that it is a viable entity and can successfully manage its finances, (6) the center must become current and timely pay its debt obligation to the state.

Chairman Burzler told board members to consider the information for their next meeting, scheduled for May 16.
 

Bethel College President Robert Prosser, citing strong statistics regarding the growth of the college within the past four years, on Saturday, May 4 announced plans for the expansion of facilities.

Mr. Prosser stated Bethel:
(1) Has the only accredited Physician Assistant Degree Program in West Tennessee, with only two in the entire state;
(2) Has received the Governor's Quality Interest Award two years in a row;
(3) Was the first "IBM ThinkPad University" in the State of Tennessee;
(4) Has been ranked 19th in the nation in "tech savvy" by Yahoo Magazine in Bethel's category of colleges;
(5) Has doubled its enrollment in the past four years;
(6) Has doubled its endowments in the past four years;
(7) Has doubled revenue from services rendered in the past four years.

Contrasted with these achievements is the obstacle of adequate housing, with students living three to a room in the dormitories. Other improvements are needed as well, Mr. Prosser said, stating the alternative to growth is stagnation.

"Bethel's mission is to urgent; Bethel's economic, social, and spiritual impact upon this area is too important to allow Bethel to stagnate," he asserted.

Bethel is already in the forefront in some areas, educating many working adults, thanks to the Success Program, with 500 students currently enrolled in adult programs.

"Without a college degree, thousands upon thousands of people in this area have encountered vocational, financial, personal, social and even spiritual roadblocks," he said. "Bethel's mission is to help people get over, around, or through these roadblocks."

Immediate plans include the construction of a new dormitory proposed to open in the fall of 2003. The building is to be placed near the center of the campus between the library and student center, facing the new College Drive that is currently under construction. A new entranceway on Highway 22 will highlight the college.

Other plans are underway for a completely new or renovated science complex, a fitness center, a state-of-the art- student center, and a football stadium.

"Fine facilities cannot replace Bethel's resourceful and caring professors," said Prosser, "but adding state-of-the-art facilities to Bethel's state-of-the-art technology and highest quality faculty will be an unbeatable combination.

Consultants routinely advise that modern fitness facilities attract students' attention more than any other improvement, Prosser said. Concerning the need for a football stadium, he said, "The Bethel College Wildcat football team needs a home." The team currently plays on the McKenzie Middle School/High School football field. Dirt work to prepare the playing surface for the field has already been pledged.

A new student center will free the current facility for renovation into classroom and office space while the new center will provide food court dining, recreational activities, student government offices, and interactive space or "living room" in which students may gather as "the Bethel family."

On the academic front, branch campuses are being contemplated, with locations in Paris currently being explored.

Enthusiasm for the prospective changes was stoked to excitement by a challenge gift of up to $600,000 by an un-named local donor who pledges to match any gifts up to one-half of the cost of the new dormitory.

"Bethel College can realistically, for the first time in 30 years, look forward to expanding physical facilities," said President Prosser. "Missing this opportunity for advancement means an uncertain future... only a commitment to a vital future by interested people such as you can sustain that progress into the future."

President Prosser invites ideas for Bethel's future development and challenges citizens to determine how each one may help Bethel by supporting these endeavors.

On hand at the announcement to press home the need for Bethel's advancement was former Wal-Mart President and Chief Financial Officer Jack Shewmaker. Mr. Shewmaker shared that there are times when opportunity is lost because, at the time, it cannot be seen. As an example, he told the story of a time, just when Wal-Mart was going public, that he spent $1600 on a new car rather than investing in Wal-Mart stock, 100 shares of which at the time could be bought for the same amount of money. "What was worth $1600 back then is now worth several million dollars," he said, "I thought I had to have a new car - that was the most expensive car anyone ever bought."

Observable opportunity, he related, should not be wasted. "I believe in the future people going into the work force must be substantially better educated than they are today," he said, stating his travels have shown that jobs are moving to other countries not because of cheaper labor but because of a more skilled work force. "If you don't do more to stay ahead you will fall behind of what I have seen in the rest of the world," he said.

He said that Wal-Mart's success was built largely on reinvestment in people through education in technology. "When you do that, what you will experience is that a higher level of education will improve the workforce here which will attract (more industry). You will do more to ensure the standard of living and quality of life through that one effort than anything else I can think of. Your children and grandchildren deserve that opportunity."

Shewmaker almost missed the opportunity to work for the Wal-Mart Corporation, crediting the combined vision and humanity of Mr. Sam Walton for his good fortune. He had been traveling the countryside searching for a job when he interviewed at a Wal-Mart store in Arkansas when the chain was only about 12 stores long. Mr. Walton was not in the store that day, but upon his return that evening, his associates briefed him on the interview, adding they didn't believe Shewmaker was interested in the job.

Mr. Walton tracked Shewmaker down at his sister's home in Missouri, asking him to return for another interview. "Mr. Walton, I really enjoyed meeting the people there but I really don't see a lot of merit in driving back to Arkansas," Shewmaker replied.

"Will you meet me halfway?" Mr. Walton asked, giving Shewmaker his first startling insight into the character of the man who built the world's largest corporation.

The people of every community in the Tri-counties and beyond have an unprecedented opportunity for growth not only of Bethel College, but for the entire region, says President Prosser, echoed by Jack Shewmaker. For more information about how to contribute to the future of Bethel College, call 731-352-4000.

Phone (731) 352-3323 or Fax (731) 352-3322
washburn@mckenziebanner.com