ULV Athens campus closes abruptly

Chrissy Zehrbach
Editor in Chief

The University of La Verne severed ties this week with its Athens campus and the Somateo Collegio La Verne, the non-profit organization with whom it was contracted to run that campus for more than 10 years.

Financial concerns had plagued the overseas campus, which led to a financial viability study that was conducted over a three-week period by the independent public accounting firm Deloitte and was finished Sept. 16.

Deloitte found that the Somateo had a negative net equity of 2.4 million euros that was projected to increase to 2.7 million euros at the end of 2004. The Somateo’s assets totaled 1.3 million euros, but its liabilities were 3.7 million euros, Deloitte reported. (One euro is approximately $1.23)

In ULV’s partnership with the Somateo, ULV was responsible for the curriculum, degree programs and degrees from an accredited U.S. university. The Somateo’s responsibilities included employment of faculty and staff, the facilities and working with the Greek government to make sure it was operating under Greek law. Under Greek law, the two are separate entities with separate boards of trustees and bylaws. Therefore, ULV is not financially responsible for the Somateo’s debts.

Deloitte also found that the Somateo had missed 158,000 euros in payroll, 101,000 euros outstanding tax liabilities for employee taxes, overdue 294,000 euros to the Greek Social Security. The negative cash flow was also determined by Deloitte to reach 366,000 euros by the end of October despite expected income from the fall semester.

“It was very evident they were not in a position to survive their fall term,” said Controller Lori Gordien, who had traveled to Athens in July along with Executive Vice President Phil Hawkey to do a preliminary review.

The need for a financial review became evident in April. The ULV administration began questioning the situation in Athens because communication was poor and it did not know the status, said ULV spokesman Charles Bentley.

While Athens sent ULV an annual financial statement, it often came in Greek and was hard to get translated. It was after the July visit that the administration decided to hire Deloitte.

“We have the responsibility to make sure the Somateo was financially viable to deliver academic programs,” Gordien said. “If that was not to be done it was a risk to our students.”

The review revealed that the situation was far worse than anyone had imagined, thus the final decision to cut ties was made Sept. 17 by the Executive Committee of the Board of Trustees, Provost Richard McDowell, Hawkey and University President Steve Morgan.

“It was a decision we agonized over,” Morgan said. “In the end we felt we had no other choice if we were going to put our students first and make sure that they were protected.

We tried to take into consideration all of the information we had at the time knowing we were coming very close to a deadline, and we worked feverishly to find other alternatives we could explore but as the deadline drew closer, as we got the financial report, we realized that we were talking about millions of dollars. It was not realistic to think that we could do anything to save that organization,” he said.

Morgan said they had looked into alternatives to improve the Somateo’s financial situation, but the need to make a quick decision presented itself with the beginning of the fall semester only days away.

Classes were scheduled to begin at La Verne Athens Monday. Instead, students received a notice the weekend before that there would be a delay.

“We had no idea, in fact we registered at ULV Athens on Thursday planning on attending classes the next Monday,” said Kenny Colby, a junior who had planned to spend the semester in Athens. Colby said he was in disbelief and was worried he would have to return home and start classes mid semester or fall behind.

In all, approximately 600 students were registered to attend La Verne Athens this fall. All students were given the opportunity to transfer to the University of Indianapolis, which also has an Athens campus.

UI Athens has agreed to accept all 600 La Verne Athens students if they wish to continue their studies in Athens. UI Athens also said it will start its semester a week later to accommodate the transition. Classes will start this Monday.

For Brethren Colleges Abroad students currently in Athens who decide they would rather return home, ULV has offered to pay their transportation expenses. Students who wished to stay will not have to repay costs they have already paid to the Somateo. Funds already paid to the Somateo will most likely not be returned, Bentley said, but ULV will cover costs that have already been paid.

“The University is willing to make sure that these students have no problems financially or educationally in terms of making this transition,” Bentley said, adding that students would have lost out on money as well as time and units if the organization had collapsed mid-semester.

“The University is going to take a monetary loss for this,” he said. “But by deciding not to start the term is going to cost us is less now than it would have.”

Colby said all four undergraduate students from ULV plan to attend UI Athens. There is one graduate student, however, who will be returning because the program does not fit her needs, he said.

A ULV team consisting of Dean Adeline Cardenas-Clague, Registrar Marilyn Davies and Hawkey have been in Athens assisting the students with the transfer process. They are operating out of the Athens Plaza Hotel because they are not allowed on campus, and are working with three La Verne Athens employees, the only faculty on site employed by ULV itself.

With the split from the Somateo, ULV took its name and accreditation through the Western Association of Schools and Colleges from the Somateo. The Somateo has plans to teach the semester, but their courses will not be accredited. UI Athens is also an accredited American institution and units are guaranteed transferable, Bentley said.

Bentley said that any student of junior or senior standing at La Verne Athens who continues work on their degree at UI Athens will have the choice to have their degree read University of La Verne if they so desire. Students of freshman or sophomore standing who finish their degrees at UI Athens will not have this choice, however, but they will have a degree from an accredited American university.

The decision has been hard on the students as well as the faculty in Athens, and many at ULV predict there will be legal action taken against the University.

“Some students could attempt to sue us,” Morgan said. “I think faculty and staff from the Somateo might sue us claiming that we have responsibility.”

“I’d be shocked if we don’t have lawsuits coming at us,” Bentley said. “A lot of the anger right now is being pointed at us from the faculty. I don’t believe the faculty knows financially what we know. They haven’t seen the report that we’ve seen.”

Jonathan Reed, professor of philosophy and religion, expressed concern for his friends in the faculty at ULV Athens, who are left jobless at a poor time in a country that has a high unemployment rate.

“I feel very bad for the students at ULV Athens and I feel terrible for the faculty and staff who have devoted their life to ULV Athens,” Reed said.

“I thought it was a very solid academic program that offered students from the US and from Europe a high quality education,” said Reed, who took a group of 11 students to Greece for a five-week summer session in July. “It’s a tragedy we had to sever our ties. The students that I brought this summer had great experiences and I was planning on bringing students back next year.”

Chrissy Zehrbach can be reached at sqweet@aol.com.

Journalism operations manager at the University of La Verne. Production manager and business manager of the Campus Times.

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