By Martha Nodar

Oglethorpe University remains under the scrutiny of its accrediting association but is on track to be in full compliance and preserve its accreditation, university officials say.

The main issue for the Southern Association of Colleges and Schools (SACS) is the operating budget deficit Oglethorpe President Lawrence Schall inherited when he arrived at the Brookhaven institution 3½ years ago.

Schall said that in the fiscal year ending June 30, 2007, the university ran a deficit because his administration was still executing his budget action plan. As a result, the Commission on Colleges of the SACS found Oglethorpe noncompliant with its “Principles of Accreditation” on Dec. 7, 2007, and placed the university on a warning status for 12 months.

A college must be in full compliance with the core requirements, federal requirements and comprehensive standards in the “Principles” to get reaffirmation of its accreditation.

Under the warning status, Oglethorpe remains fully accredited. Neither federal funding nor financial aid has been affected.

A warning status with SACS means an institution has shown “good cause” to receive additional time to achieve full compliance. On Dec. 8, Oglethorpe again received the warning status, giving the university an additional 12 months to achieve full compliance.

The university was found to be noncompliant with two of the commission’s 15 core requirements and three of its 54 comprehensive standards, including 3.10.1, which requires an institution’s “recent financial history to demonstrate financial stability.”

A spokesman from the commission said a college must show financial stability during the most recent two to three years. When the warning status expires next December, the university expects to be in compliance.

Schall said the fiscal year that ended June 30, 2008, showed a “positive cash flow in excess of $500,000” because his plan of adding revenue, decreasing expenses and internal quality control was in full swing.

Schall credits the Oglethorpe community with pulling together to boost revenue by more than $1 million and reduce operating expenses $1.7 million. The savings came from reorganizing staff, negotiating lower prices with suppliers, and outsourcing groundskeeping, housekeeping and maintenance.

Marilyn Fowle, Oglethorpe’s vice president for business and finance, said she expects “the operating budget for the fiscal year ending June 30, 2009, to be in the black as well, thus establishing two consecutive years of recent history of financial stability.”

Joe Shelton, a 1991 graduate and member of the board of trustees, said: “With a strong president and an excellent leadership team, Oglethorpe’s best days are ahead of us. We are addressing the financial issues noted by SACS, successfully, and will continue to do so.”

For the past two years, Schall said, the university has received an overwhelming number of academically accomplished applicants, and fundraising the past three years has set Ogle­thorpe records and surpassed expectations.

“Oglethorpe has been an Atlanta icon for almost 200 years,” he said. “We plan on being around at least that long into the future.”