FOR IMMEDIATE RELEASE
After feeling he had no choice but to close the doors of the school his parents founded in 1992, ACT College president Jeffrey S. Moore fights for change and for rights for all students in the nation’s career colleges
April 10, 2012, Arlington, VA —Jeffrey S. Moore explained today why the for-profit vocational school his parents founded in 1992, ACT College, was required to close its doors on April 3.
“We feel terrible for the 361 students who were enrolled, and the 54 employees on our payroll,” says Moore, who has been president of ACT College since 2002. “We have always been focused on the students. We tried desperately to keep the school open, but could not overcome the Department of Education’s refusal to reimburse the school for money it had earned for teaching the students since December 2011.”
Moore’s attorney, Gerald Ritzert of Ritzert & Leyton in Fairfax, VA, indicates that the total being withheld is $1,444,974.
“The lack of reimbursement by the Department of Education ultimately caused the closing of ACT College,” Ritzert says. “Even though the school’s administrators worked hard to keep the doors open and continued to teach its students, it wasn’t feasible without payment from the Department of Education. Like any business, ACT College couldn’t survive having its main revenue source cut off for months while being expected to stay open.”
The Timeline of Events
February 17, 2011: ACT College was put on a heightened cash monitoring (HCM2) method of payment by the Department of Education to address some regulatory issues involving the calculation of refunds.
July 2011: ACT College identified a problem with its internal student information system, which made it difficult to identify student credit balances, and reported the problem to the Department of Education. Moore then implemented new accounting processes to better track credit balances for current students.
He and his team also began working closely with the Department of Education to resolve the HCM2 issue. In turn, the Department of Education required the school to provide additional information in its monthly submissions for reimbursement.
December 2011: Additional information about the credit balance discrepancies was discovered by ACT College’s accounting firm and reported to Knutte & Associates in Illinois—the group that conducts the school’s annual compliance audits and reports the financial information to the Department of Education.
December 2011 through Present: The Department of Education refuses to reimburse the school multiple requests for reimbursement totaling of $1.45 million as of March 30.
March 9, 2012: ACT College received a letter from the U.S. Department of Education called a Denial of Recertification Application to participate in the Federal Student Financial Assistance Programs. In a response letter on March 13 to the allegations of the Department of Education, Ritzert wrote:
“In reading the denial, it is apparent that the main concern causing the Department to issue the denial is a lack of trust in the school. The school has been working with the Department since last year to eliminate some credit balance and the school has been keeping the Department fully informed in that process including explaining the administrative limits that created the situation. As a result, it appears the denial was primarily prompted by the Department’s conclusion that the school provided incorrect information to its auditors.
“Specifically,” Ritzert continued, “the denial maintains that the school provided a spreadsheet with a false notation about checks having cleared the school’s bank account to its auditors and that the auditors subsequently provided the spreadsheet to the Department. It is unclear why the Department concluded that the school inserted the notation on that spreadsheet, but I have investigated the issue and conclude that the school did not make that inserted statement. It does not appear the auditor told the Department that the school made the notation so it appears to be a unilateral conclusion by the Department.”
March 15: Moore found an interested party who was hoping to assume the school’s operations.
“I had actively been looking for someone to assume school operations,” Moore says. “The school needed $750,000 to get through the transition, and I couldn’t convince the Department of Education to release any additional funds that we were owed. It was the only thing we could think to do to keep the doors open.”
March 30: Moore was informed by the Department of Education that it would transfer only a portion of the money they were holding, $500,000. Moore’s attorney appealed again to the Department of Education, to no avail. Then, on April 2, Moore left a voice message again to the Department of Education pleading for assistance.
April 3: Moore concluded there was no choice but to close the three campuses and posted this notice on ACT’s website and campus doors: “We are very sorry to inform everyone that ACT College has been forced to close its doors. We will make every possible effort to provide information that will help our students complete their programs of study. Please keep an eye on the website, and on your mailbox for further information.”
The Big Picture: Are Career Colleges at Risk?
“Another real concern is that career colleges, in general, are being unfairly targeted,” suggests Moore, citing that ACT College has long had a combined student retention and job placement rate averaging 80 percent.
“For anyone who is following the career college issue at the national level, it’s clear that some schools are not doing right by their students. That was not the case at ACT College, and I worry that this is a situation in which we are the scapegoat.
Moore explains that his parents’ goal—the role he took over in 1999 after finishing his 13-year career as a Ballistic Missile Technician and Submarine Supply Officer with the US Navy—has been to help students.
“I promise to do everything I can to make good on the promise my family and I have made to the students, staff, and employers who know we are excellent educators, and turn out successful students,” Moore shares. “I regret any mistakes the Department of Education feels our organization may have made in complying with their rules and regulations. Our goal has always been to do the right thing. I will continue to work hard in the coming weeks and months to ensure that all of our students are taken care of.”
For more information visit http://actcollege.edu.