The D-G has the scoop this morning on an internal report that states that Arkansas Baptist College misspent $475,000 in federal grant money and may owe the federal Education Department more than $500,000 it spent on financial aid. The report, from a Georgia accounting firm specializing in historically black colleges hired by the school, stated that Arkansas Baptist was “in a serious financial crisis.”

According to the report, for example, $150,000 in federal funding (with a $150,000 college match) that was earmarked for an endowment fund was instead drawn or spent for other purposes. It’s unclear what the money was in fact spent on.

From the D-G, which acquired a copy of the report:

The private, historically black Little Rock college compounded its cash-flow problems by leaving money on the table year after year, says the scathing “operational assessment” by the Wesley Peachtree Group, a Georgia accounting firm that specializes in higher education and historically black colleges.

Dated June 30, 2017, and marked “strictly confidential,” the 60-page document adds more context about Arkansas Baptist’s long-standing financial struggles — including problems with the type of money at the heart of an ongoing crisis that has left faculty and staff members without paychecks.

Arkansas Baptist recently failed to make payroll, which the college’s interim president Howard Gibson blamed on “delayed” payments of federal money. The college — which has struggled with financial difficulties, including periodically failing to make payroll, for years —  is heavily reliant on federal funding such as student loans to make ends meet. The D-G reports that the administration is now looking for other sources of funding to pay employees, such as a short term loan.

The college, which went through a leadership upheaval last year, has been divided internally in recent years, with controversy arising over personnel and business decisions, real estate investments, and the lapsing of tax-free status for the college foundation.

This is a complicated story, and I suspect there’s more to come. There’s much more in Eric Besson’s story in the D-G, which is quite strong — a thorough and detailed account of the current troubles and the backstory. My guess is that it’s the tip of the iceberg.