Trustees of Mid-Continent University disagree on whether the school will have to close its doors this semester because of financial problems.
Board member Gale Hawkins said trustees and members of the finance committee along with chairman Tom Butler had a conference call with federal government officials Thursday afternoon regarding concerns about the school's financial standing. Hawkins said he requested the call directly with government officials because of a lack of information from Butler and other school leaders to the board.
Following the call, Hawkins said he believes that because of ongoing financial oversights, the Mayfield school will close.
"There is no money coming in, the government doesn't owe us any," he said. "We have just been trying to survive until graduation."
The school's problem revolves around a lack of required documented information to justify student loan and grant expenses. The school has had to return all federal funding since 2007, he said. The magnitude of the problem came out last fall after a consultant working to correct the fiscal issues was fired by the school administration, according to Hawkins.
"You don't expect your committee to be kept in the dark about issues of this magnitude," he said.
School funds dipped from $7 million to the $100,000 range quickly because money had to be loaned to students. Since November 2010, Mid-Continent has had to lend between $46 and $90 million to support its students, he said.
"You have to be honest with the government," Hawkins said. "When you have a budget of only $22 million, you can't screw up."
Butler called it a "serious situation" but expressed a more optimistic view Thursday following the call with Department of Education officials based in Kansas City. He said leaders are now preparing a new submission of student financial aid and grant paperwork that has been rejected by the U.S. Department of Education twice since October.
"We are working to consider steps toward an action plan that is aimed at buying us some time and possibly assuring our future," he said. "If the funds are unlocked, we are in good shape but we have to consider how to get through the next one to two weeks."
Because the school is currently accredited by the Southern Association of Colleges and Schools (SACS), any past credits earned by students would be transferable to other institutions. However if the school is closed mid-semester students wouldn't receive credit for ongoing classes.
Mid-Continent was placed on the accreditation warning list in December 2012 and remained after a review last December, according to the SACS school disclosure statement issued Dec. 19. The statement reads that Mid-Continent was put in the warning category because of non-compliance with core requirements, comprehensive standards, or federal requirements of accreditation. The maximum amount of time a school can be monitored is two years, which would end this December.
Hawkins said many questions remain such as - how information flow was restricted to members of the Board of Trustees, how the same mistakes in paperwork were repeatedly made without correction and where the money has gone.
He pointed to the leadership of university president Robert Imhoff and inaction on the part of key decision-makers to take heed of the warning signs that appeared as early as 2004. Butler confirmed that Imhoff has agreed to step aside, which will not be official until approval from the board.
"Well, when there is no money and the school is closing, it's a pretty easy decision to step down," Hawkins said.
Another concern that has been raised is the number of Imhoff relatives working at the university.
Other employees listed on the school's electronic staff directory with the same last name include - Jackie Imhoff, vice president for adult programs; Keegan Imhoff, online pathway program manager; Ruth Imhoff, athletic budget director; Kevin Imhoff, director of athletic advancement; and Laia Imhoff, head spirit squad coach. Hawkins said in total there are nine relatives of the current president working at the school for a total cost of about $1 million per year.
The next Board of Trustees meeting is set for 11 a.m. Saturday in the Advantage building at the school, according to Butler. He said the board will meet to discuss possible plans and hear judgment from members during an executive session that will last several hours. He wouldn't elaborate on details of the agenda or whether Imhoff's status would be discussed.
"The meeting will focus on what will keep us open and going now and other items will be moved down the list of priorities," Butler said.
Messages left Thursday at Imhoff's office and with school chief of staff Bill Bartleman were not returned.
Contact Kathleen Fox, a Paducah Sun staff writer, at 270-575-8651 or follow @kathleendfox on Twitter.