The administration of Burlington College used $50,000 from a scholarship fund to pay for daily operating costs, according to documents obtained by VTDigger.
The tiny liberal arts college is financially strapped and the administration used scholarship money from the estate of G. Jason Conway to cover expenses, according to financial statements and people who managed his estate.
Burlington College is struggling to pay back a $10 million loan to buy 351 North Ave. from the Catholic diocese. Administrators and the board say the college’s financial troubles started in 2010 when Jane Sanders was president.
Sanders, the wife of Sen. Bernie Sanders, I-Vt., had a grand plan for the college and the diocese figured prominently in her vision of a larger, more prosperous institution, but she left the school shortly after the purchase and before the school’s financial problems began. Christine Plunkett, who is now the president, was the school’s chief financial officer at the time.
The 2010 purchase of the diocese hinged on doubling the school’s enrollment and an aggressive fundraising campaign. When Burlington College asked for a $7 million loan from People’s United Bank, school officials promised they would launch a capital campaign to pay back the loan.
Enrollment, however, has not increased and the millions of dollars in donations have not materialized.
Amid the turmoil, at least 25 staff members in the past three years have left. The college is currently without a full-time registrar, academic dean or admissions director and the human resources director is leaving.
The regional accrediting agency in June placed the college on a two-year probation for failing to meet financial standards. Financial woes were “exacerbated” under president Plunkett, the New England Association of School and Colleges said in its letter to the school.
Meanwhile, recently released audit reports of the college’s finances show that the school “borrowed” $50,000 of the $70,000 Conway scholarship.
The 2013 audit, the most recent financial data available for the school, shows the money has not been repaid. The endowment fund now contains $34,000, according to that audit.
G. Jason Conway and his wife Marcia Vance were longtime faculty at Burlington College. Vance helped to found the Vermont Institute for Community Involvement, which became Burlington College, then worked as a director of student services and then a director of financial aid, according to the college’s website.
Conway graduated from Burlington College and served as the admissions director. He also taught at the school for more than 30 years.
The $70,000 scholarship fund was to be put in a trust in perpetuity where it would earn interest. The money was supposed to support needy students majoring in the arts, humanities or social sciences programs, according to an agreement between Burlington College and the executor of Conway’s estate.
The 2012 audit shows that $166,500 in endowed scholarship funds were used to cover operating expenses at the college, including the money donated by Conway.
Burlington College was “out of compliance” with its own policy regarding scholarship funds, which requires that the money remain untouched in a separate bank account and only be used for scholarships, according to the 2012 audit.
The 2012 audit says a donor “changed the terms of their ($70,000) donation from temporarily restricted to permanently restricted student aid.” Then-chief financial officer Bill Breen said the audit is referring to the Conway scholarship.
However, Conway died in 2010, before the 2012 audit was complete.
Breen, who worked a year at the school starting August 2012, said he discovered that Conway’s scholarship was spent on operating costs when the estate executor inquired about who had received the scholarship that year. Breen also discovered that the board had approved that use.
Breen said the money was always supposed to be for scholarships. He then informed the board of trustees, who passed a resolution to repay the $50,000 in $3,000 monthly payments, but several months later the school could barely make payroll every two weeks, and that goal was abandoned, Breen said.
Conway’s worst fear was that his money would be used for something other than a scholarship, said Karen Lapan, a former faculty member who said Conway was her mentor and friend.
“This makes me incredibly sad that Christine (Plunkett) would dishonor such an honorable person,” Lapan said.
As these financial troubles have come to light, the school’s board of trustees has said it and Plunkett are victims of a financial mistake committed by Sanders, who led the charge to buy the 32-acre campus.
Plunkett, however, was chief financial officer at the time, and prepared financial documents as well as worked with the bank and the Catholic diocese to borrow $10 million.
Plunkett has declined multiple interview requests via her spokeswoman Coralee Holm. She has also not responded to a request for current financial information about the school.
The college is a private entity and therefore not obligated to release as much financial information as government entities, but the school still must report financial information to the government because it is a tax-exempt nonprofit. That data is only available through fiscal year 2012.
There was “literally no fundraising occurring” during the year he worked there, except by faculty, whom Plunkett asked to help raise money, Breen said.
“I really thought it was a place worth saving but their efforts are scattershot to say the least,” he said.
In financial documents, school officials have said they were in the “silent phase” of a capital campaign. The public phase of that campaign never materialized, former and current staff said.
A financial analysis from before the sale details how the school planned to raise $2 million in gifts in fiscal year 2011 and at least a million each year after that. IRS documents for Burlington College indicate the fundraising goals were not met.
The school now plans to sell about half of the land to developer Eric Farrell to build a 200-unit dorm as well as 30 single-family homes, a 120-unit apartment building, affordable housing units and senior living.
During his year at the school, Breen said Plunkett was reluctant to explain the school’s financial situation to him. She repeatedly rescheduled budget meetings with him to go over the budget line by line, he said.
Breen soon realized how cash-strapped the school was between payroll, bond payments, employee reimbursements and other bills. His suggested budget cuts went unheeded, he said. Plunkett instead suggested alternate revenue sources such as holding weddings and other events on campus.
“The bills are just ridiculous in terms of the revenue coming in,” he said.
Burlington College has around 200 students and about a $5 million annual budget.
