A Times Editorial

Eckerd College's financial crisis

© St. Petersburg Times, published June 22, 2000

The financial crisis that Eckerd College board members became aware of only in the past week has its roots in questionable decisions Eckerd President Peter Armacost and his confidants made years ago. Armacost and Webster Hull, Eckerd's vice president for finance, are stepping down. Hull's predecessor, James Christison, whom some Eckerd officials now blame for the school's most egregious mistakes, has been gone for years. However, solving Eckerd's problems will require changes in policy, not just in personnel.

First, Eckerd officials have a responsibility to bring discipline and accountability to the stewardship of the college's finances. It is simply inexcusable that most board members were unaware until now that Eckerd's endowment had shrunk from $34-million to less than $13-million over the past 18 months. The quickest way to restore confidence would be to bring in independent auditors to make a top-to-bottom review of Eckerd's finances and internal accounting procedures. Whatever the findings of such a review, Eckerd officials need to develop a competent and fully staffed business office, and college trustees need to establish a more rigorous system of oversight.

Beyond that, Eckerd officials need to take a hard look at the policy decisions that put the school in financial jeopardy. Armacost is an innovative entrepreneur who pioneered several successful programs, such as the Academy of Senior Professionals, that have since been emulated by other colleges and universities. Eckerd has grown in size and stature under his leadership. However, Armacost also led the college into dubious business ventures far removed from what should be its core educational mission.

The College Harbor and College Landings developments were glorified real estate projects that wound up in bankruptcy. During the same period, Christison pitched an inappropriate investment scheme involving Eckerd endowment funds. The embarrassments and financial losses associated with such undertakings should have alerted Eckerd trustees to the need to develop stronger accountability. Instead, they were unprepared for the news that the school's endowment had shrunk to alarming levels.

Armacost's closely held management style allowed Eckerd to act with agility in the increasingly competitive world of higher education. However, no public university would tolerate the inadequate system of oversight under which Armacost has operated. Eckerd is a private college, but it is an asset whose future is important to all of Tampa Bay. Armacost, who announced his retirement this week, oversaw a period of impressive growth and innovation at Eckerd. It will be left to his successors to bring comparable maturity to the college's operations.

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