Wednesday is the deadline for Saint Augustine’s University to show federal agencies how it spent millions of dollars of grant money. The school was required to hand over documentation by noon.
We're talking about money that was supposed to go toward student improvement, renovations and high-tech expansion to help the school and surrounding communities. Several grants were awarded after the school's money troubles were known and federal agencies want to know where their money went.
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Record low enrollment, online only classes, millions and millions of dollars in debt, all led Saint Augustine’s University to file for Chapter 11 bankruptcy earlier this year. The school also lost its accreditation.
Now federal agencies are taking a deep dive into grants given to the historically Black university. In a federal court filing, the agencies listed the specific grants they have questions about.
Based on that filing, the school must turn over current debts to federal agencies, evidence of the proper use of grant money and provide a witness to answer questions about spending.
In total there are 34 grants listed on the government's request for information totaling more than 30 million dollars.
The department of education was the biggest giver, including three grants worth $13 million since 2020 to "strengthen their [the school's] management and fiscal operations."
The school received more than two million to restore and preserve historic buildings on campus, like the chapel. However, state court records show one company is suing Saint Augustine's for failing to pay for work on that chapel.
In 2023, the Department of Commerce provided almost 2 million to "...increase internet bandwidth capacity and connectivity to SAU."
We found two IT companies hired to improve and maintain the school's network say they're owed more than 25 million. Both have lawsuits filed in Wake County Courts for money owed.
About a month ago, an attorney representing multiple federal agencies peppered the school board chairwoman with questions about where all that money went.
In one exchange in court, Benjamin Higgins, the attorney representing four federal agencies asked, "My understanding is that those are also potentially related to the use of grant funds. Do you have any awareness of that?
Chair of the Board of Trustees Sophie Gibson responded, "I cannot say specifically... that's why we're doing our investigations as well. But I did hear that some of the funds were not used for malicious intent. It was used to do payroll."
The Department of Education grants to strengthen the school's management and fiscal operations may allow for spending that money on payroll. Under federal grant rules, none of the education, research, technology or renovation grants can be used for anything outside of the specific grant language.
WRAL Investigates also found several large grants that look like they could have helped the school on issues that are now listed as debts owed and the subject of lawsuits. Yet, the school never drew down a dime from those grants.
With today's deadline, those federal agencies may get answers not only about spent taxpayer dollars, but why some large grants were never drawn down.
Federal agencies hope to get their answers when this issue heads back to federal court next month on this issue. There's also a hearing set for June 30 where the school is asking for permission to obtain extra funding from a loan to keep the school open while the bankruptcy case plays out.