The Higher Education Coordinating Board today cleared the University of Central Arkansas’s $6 million line of credit with local banks. UCA obtained the credit line long ago, after a vote of the Board of Trustees, but officials said they had not been aware until recently that state approval was required first for such arrangements.
UCA also got approval from the Department of Finance and Administration for an advance on state funding to further shore up its ability to meet cash flow obligations. Jim Purcell, the director of the Department of Higher Education wrote a letter to the state’s chief financial officer, Richard Weiss, recommending that UCA be allowed to obtain the advance. According to Paul Louthian at DF&A, that advance was approved late yesterday afternoon.
“They asked for 3.6 million, we approved it for $3,550,000,” Louthian said. “They are guaranteed, in the revenue forecast that’s generated for the state, a certain amount of dollars. That’s given to them in 12 monthly allotments. The language says that they cannot have more than 85 percent of that monthly guarantee and that worked out to be $3,550,000.”
The university has until the end of the budget year June 30 to square state accounts. It incurs no interest charges for the advance.