Pay complaints mount at Saint Augustine's University, credit agreement announced up to $30M

As Saint Augustine's University gears up for another school year, the educators and staff who are still working are doing so without a paycheck.

WRAL News has followed the pay issues since last year.

On Friday, Durham-based Gothic Ventures announced it would provide the university a line of credit of up to $30 million. The school faces tax liens and lawsuits totaling more than $10 million. WRAL News has reported that a Charlotte design firm and a maintenance and janitorial services provided both filed suit against the university citing unpaid bills.

The initial credit allocation from Gothic would be for $7 million, which the university will use to address important short-term, cash-flow requirements so that classes can begin on Sept. 3. for the 2024 fall academic semester.

The credit agreement is secured by a deed of trust against the university’s real estate holdings.

Saint Augustine's University may receive additional funding to support capital requirements, operating expenses, capital expenditures and real estate development.

“This loan significantly affirms our commitment to our students and staff," interim President Marcus Burgess wrote in a statement. "We are grateful for the belief that Gothic Ventures has a place in our vision, allowing us to focus on enhancing the academic experience while showcasing our resilience in the face of adversity.”

In July, Burgess told WRAL News that the university was in the final stages of securing a $7 million bridge loan.

Pay complaints pile up at Saint Augustine’s University

As of Thursday, the North Carolina Department of Labor had received 29 complaints against Saint Augustine’s University since September 2023. That includes three complaints filed this month.

WRAL Investigates went through the complaints open to the public. Complaints that are still under investigation are not available for public viewing.

One complaint says the university initially blamed the pay issues on bank error. It goes on to claim the university paid other employees while delaying paychecks for adjunct faculty. It says the interim president told the complainant, “On one hand, I could pay you … but that would only place a bandage on the situation.”

WRAL Investigates reached out to the university, regarding the claims in the complaints. We have not heard back.

One former employee describes the situation as "traumatic." She wants to remain anonymous in order to protect her career. She says also filed a complaint with the labor department, calling them extremely helpful.

“They have been able to reach HR when we have not been able to reach them,” she said.

The former employee said she still loves the school and hopes it can get "out of the bind they’re in."

“I see the potential," she said. "I hope they're able to find out who's causing the problem … Schools have closed down for less. I love St. Aug, but I also feel like I was done dirty by them.”

WRAL Investigates asked the former employee if she believed she would eventually get her money back.

“I am hoping that they're able to pay something back," she said. "I was able to get help from others with paying all these bills that stacked up and debts that I have now and my messed up credit score.

"[I’m] just trying to get back on track with life and just trying to keep life going.”

WRAL Investigates was the first to report that the university decided to delay the start of its fall semester by about two weeks. During that time, Burgess said the university was working to finalize funding in order to pay faculty, staff and student account reimbursements.

“We have been tightening our belts and refining our budget to make sure we’re not doing the same things that got us in financial trouble in the past,” Burgess said in a university-recorded video.

The chairman of the board also previously announced a "short-term financial solution" in order to address the pay issues.

Friday's announcement would appear to be a part of that solution.

A complaint filed back in March shows that a university representative also used similar language when responding to the department of labor.

An email reads, “We are diligently addressing short and long-term solutions to ensure the prompt and seamless payment of the March 8 paycheck and all future paychecks.”

The former employee told WRAL Investigates, “It was never a for sure, 'this is the day you're going to get paid.' It was a 'it might happen; it might not happen.'”

According to multiple sources, that March 8 paycheck went out more than five weeks later. It was also the last one received to date.

WRAL Investigates also confirmed the U.S. Department of Labor is still investigating the university.

As the university works through its financial issues, it also sent out a letter asking qualified alumni to consider working as adjunct faculty this school year.

The first day of classes is now scheduled for Sept. 3.