The Southern Association of Colleges and Schools Commission on Colleges has placed Birmingham-Southern College on warning status because of what SACSCOC says was a failure to comply with principles of accreditation.

Birmingham-Southern remains accredited during the warning period and will be up for review by SACSCOC in December 2024.

The SACSCOC Board of Trustees took the action on Sunday. SACSCOC posted a disclosure notice on its website Wednesday.

Birmingham-Southern officials have acknowledged financial problems and have sought money from the state, city of Birmingham, and Jefferson County in an effort to sustain the 167-year-old private college.

Most of the problems cited by SACSCOC concerned finances. The notice states Birmingham-Southern failed to comply with four core requirements:

• Governing board characteristics
• Financial resources
• Financial documents
• Financial responsibility

Birmingham-Southern issued a statement Thursday about the accreditation warning, saying that President Daniel Coleman had reached out to SACSCOC after the college’s financial problems became public in December 2022. The college said SACSCOC asked for reports on its financial status in May and again in October.

Birmingham-Southern applied for a $30 million loan from the state under a new distressed colleges fund created by the Legislature in response to Birmingham-Southern’s request for state assistance. State Treasurer Young Boozer denied the application in October and told Coleman the college did not meet the law’s minimum requirements to qualify for the loan, including adequate collateral and an adequate restructuring plan for repayment of the loan.

In late November, the Birmingham City Council approved $5 million in loans of city funds to Birmingham-Southern. Coleman said that should allow the college to stay open in the fall of 2024. Coleman said he planned to seek funds from the Jefferson County Commission.

“When BSC’s financial challenges were made public in a news report in December 2022, President Daniel B. Coleman contacted SACSCOC – as well as many other stakeholders – to provide context and outline the plan for returning the College to financial stability,” the college said in its statement today about the accreditation warning status.

“The news coverage and the President’s outreach resulted in a request by SACSCOC that the College submit a response demonstrating consistent and ongoing compliance with its required financial standards by May 2023.

“At that point, the legislation that would provide bridge funding for BSC was in process, But it was not passed and signed into law until June, after BSC had met the deadline to submit the report in May.

“SACSCOC then requested additional information by October 2023. BSC had fully expected to receive the state funds by that point but, as has been reported, received a denial letter from State Treasurer Young J. Boozer III dated October 13 after months of discussion.

“The warning citation BSC has received – which SACSCOC describes as the ‘less critical’ of the sanctions it may issue – is based on the October 2023 response, which was submitted prior to the recent positive changes to the College’s financial position. BSC is preparing an update for SACSCOC that will be reviewed in December 2024.”

SACSCOC’s warning disclosure described the expectations for colleges under the core requirements:

• Has a governing board that exercises fiduciary oversight of the institution.
• Has sound financial resources and a demonstrated, stable financial base to support the mission of the institution and the scope of its programs and services.
• Provides the following financial statements: An institutional audit for the most recent fiscal year, a statement of financial position of unrestricted net assets, an annual budget that is preceded by sound planning, is subject to sound fiscal procedures, and is approved by the governing board.
• Manage its financial resources in a responsible manner.

The warning disclosure outlined what actions the SACSCOC Board of Trustees could take after the December 2024 review. Those options include removing the warning, continuing accreditation with a warning, placing Birmingham-Southern on probation, a more serious sanction than the warning, or removing the college from membership.

As of this fall, Birmingham-Southern had 731 full-time students and 284 employees. The college has sought taxpayer funds as a bridge while it seeks to raise private funds to rebuild its endowment. Coleman the college has raised $45 million in pledges to hopes to increase that to $150 million to $200 million.

Read more: BSC president: ‘No personal animosity’ over Young Boozer $30 million loan denial

Birmingham loans BSC $5 million to stay open