State leaders grill interim Tennessee State University officials for running out of money

Tennessee State University’s main campus. (Photo from TSU) 

State leaders criticized Tennessee State University for financial and operational mismanagement during a Thursday State Building Commission Meeting, amid recent fears that the university is running out of money.

According to Jim Grady, managing director for the consulting firm Alvarez and Marsal, TSU has experienced major enrollment and financial swings in the wake of COVID-19. He said in a presentation during Thursday’s meeting that the university experienced a 23 percent increase in enrollment from fiscal year 2022 to 2023, bringing enrollment up to over 8,000 students. By fiscal year 2024, that number dropped to about 7,250 at the university, which is one of Tennessee’s seven historically Black colleges and universities (HBCUs).

Grady noted that this sudden spike in enrollment stressed auxiliary services, such as housing and cafeteria services.

“Those expenses rose to a point where the revenues coming in could not cover them, and they had to come into the operating accounts to seek relief,” he said.

House Speaker Cameron Sexton, R-Crossville at Thursday’s Building Commission meeting. (Screenshot) 

Grady said this abrupt increase and decrease in enrollment could be explained by the fact that many students received one-time scholarships. Tennessee Secretary of State Tre Hargett said he believed there should’ve been a better plan in place to keep students with those federally-funded scholarships enrolled at TSU. 

“I traveled the state a lot and there was a lot of excitement when I came in – I may choke up about it,” he said. “You’ve got families who had never had a child that had an opportunity to go to college, who were told, ‘You’ve got a full ride at Tennessee State University.’

“To have the rug yanked out from under them with no plan at all for what’s going to happen in years two or three or four, that is the most heartbreaking, saddest thing in this whole situation.”

State leaders also took issue with the fact that the university has continued to pay a $800,000 contract to former President Glenda Glover, who was head of the university amid much of the mismanagement. House Speaker Cameron Sexton, R-Crossville, asked university leaders why they were still paying her.

“So, she was the leader of the institution during all this time, and we just had the report on the financial [audit]. Why would you keep her on as someone who would advise you on things going on at campus?” he asked of that advisory contract.

TSU Senior Advisor and Interim Executive Vice President Dr. Daarel Burnette said he was unable to provide clarification on that advisory contract, which was organized under previous leadership.

“I’m not at liberty to answer that question, but I hear where you’re going,” he replied.

According to board officials, the state has provided TSU with over $30 million in recent months to keep the university afloat. They said the university failed to make payroll this fall, which led to over 100 layoffs in October.

“The point is the university is out of money,” State Treasurer David Lillard said.

TSU Interim President Dr. Ronald Johnson at Thursday’s Building Commission meeting. (Screenshot) 

TSU Interim President Ronald Johnson said officials’ questions about financial management were “fair” and acknowledged TSU’s financial difficulties. However, he said much of the university’s financial difficulties are not unlike others in today’s higher-ed landscape.

“Like many higher education institutions nationwide, TSU faces financial pressures. The sector is contending with structural budget deficits and sustainability challenges. Even prominent institutions, including Big Ten universities, have reported substantial operating deficits signaling a broader issue,” he said.

“At TSU, persistent financial operational difficulties including budget deficits and outdated financial practices have challenged our stability.”

The meeting comes after lawmakers ousted TSU's board in March following concerns about mismanagement. University supporters have continually made the case TSU has been underfunded compared to historically white colleges, however, Sexton said he believes Thursday’s financial audit showed that state leaders made the right move.

"I appreciate you coming in and showing us exactly what was going on to reiterate that what we did was the right decision,” Sexton said of vacating the board in the spring.

The commission is set to meet again with TSU officials next month to find out more about its plans for 2025 and Glover’s contract. For more information on the commission or to watch the meeting, visit www.tn.gov.