Tax Records Show AIB’s Financial Problems

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DES MOINES, Iowa -- We're learning more about the proposed merger between the AIB College of Business and the University of Iowa.  Thursday we discovered several discrepancies between what AIB President Nancy Williams told students and the press, and what she shared with her board of trustees behind closed doors.

Friday we received a copy of the memorandum of understanding between AIB and the University of Iowa.  It's basically an agreement between the two schools to negotiate in good faith for the possible merger.

According to the document, the deal will not go through unless it is, "Approved by the board of trustees of AIB and the Iowa Board of Regents."

We know from confidential meeting minutes we obtained from AIB that trustees are on board with the plan. The minutes show AIB is struggling financially. The document shows board member Dick Rollin said, "This is an excellent opportunity to go out in glory on our terms before it becomes a crisis. In two years we may have to take the first deal to come along."

In terms of AIB's finances, during a Monday press conference,  Williams assured us that the school is in good financial shape.  "AIB College of Business is not seeking any kind of financial relief. In fact the college is virtually debt free."

But the meeting minutes say the college is "1.4 million dollars in debt" with "2-point-5 years of cash to fund things."

Tax records we obtained show a steady decline in revenue. For the fiscal year ending in August of 2011, AIB made $1.3 million. That fell by more than $1 million the next year to $336,000. The year after that, the last year that we have records for, the fiscal year ending in August of 2013, the school was operating $393,000 in the red.

Kyah Drake is a freshman at AIB. She says she would have never gone to AIB in the first place if she knew the business college was considering going out of business.  "How can you give me a business degree when you can't run your business," she asks, "I would have gone somewhere way far away from AIB because I wouldn't have wanted my tuition money going there and I wouldn't have wanted to invest in a year of credits that are basically useless."

The University of Iowa says it will accept AIB students and honor any scholarships.  But Drake says she may not want to transfer to the University of Iowa,  and she says her credits won't transfer to any schools she wants to go to. With the semester ending in March, her mother says the lack of transparency by AIB leaves her leery about writing another check to the school.

"There's a lot more to this story than what the students, the professors are being told and the parents..,you know, we're writing a check and we know nothing," Kim Renaud says, "We have to watch the news to find something out."

View the tax records below:

View the Memorandum of Understanding below:

10 comments

    • Thomas

      AIB is being squeezed from the top by UNI/Simpson/Central and undercut from the bottom by DMACC. I actually remember wondering about how a college like AIB can survive a recession like the last one. I’m very surprised they made it this far.

  • Thomas

    “Tax records we obtained show a steady decline in revenue. For the fiscal year ending in August of 2011, AIB made $1.3 million. That fell by more than $1 million the next year to $336,000.

    1. REVENUE is NOT declining, they were 11.4m in FY2012 and 11.7m in FY2013. Aaron, please get familiar with an income statement before your next report AIB report.

    2. Nancy is not the most eloquent person in the world, nor is she good at lying. Even Stevie Wonder saw what she was up to during Monday’s press conference.

  • hawkeyeandbuckeye

    Anyone else find it funny the girl mentioned in the article doesn’t what to be a UI student? I hate to break it to you Kyah, a degree from Iowa is 10x more valuable than your AIB degree. You’re given a chance to go to a top 30 university for heaven’s sake. Back in 07, my friends and I had to apply to get into the business school. Dont kids realize they’re given a free lunch here?

  • Derrick Ramsey

    Kind of weird to see a college that is supposed to be teaching it’s own students an education on successful business and they can’t even seem to run one right themselves.

  • marcopolish

    I think Thomas has put it well. Then the negotiations may be wise and for the best. Anyone remember what happened to those colleges in Davenport and Dubuque, and LeMars? Remember “Taicho” (sp?)? Sold to rascals who converted them into worse-than-worthless fraudulent diploma mills and in the end went away? At least this way there is some legitimate effort to take what the students have and incorporate it into definite potential while taking over some definitely good assets. This may beat other alternatives when things get “dicier” later. Changing times have made their place and model like that of Dahl’s for much the same reason.

  • marcopolish

    It might be wise if some of the students and parents got together and discussed with an attorney whether they are at risk of or have sustained some damage, because if there is a potential there then they could file a civil suit to intervene the process as interested parties and secure some kind of involvement and standing, which they could use to negotiate with UI or AIB a joint venture to safeguard their interests. This would be the time to do it and the secrecy the basis for justifying a petition, usually secrecy is involved with some sort of intent to evade or disadvantage some potential competing interest. This could allow some time for the students to actually learn a little and discover whether they aren’t actually getting a better deal in the end. It would be too bad if they turned down what is actually a significant advantage because of ignorance to the real alternative they get with a sale to UI. With legal representation in the process, they could be sure that what they were finding out is trustworthy.

  • Martini

    Aaron’s getting his hands on some incriminating documents.
    Obviously the President has lost the staff and the students; and endowment. The AIB Board (hand picked yes people or asleep at the wheel?) should buy out the President and bring in a qualified administrator to lead the transition from AIB to a U of I campus. In any other Board setting where the President/CEO has misled the Board, heads generally roll.

    • John Smith

      Point out the “crime”, then. Including the exact laws “broken”. I still can’t see any more to this story than that shocking expose on egg prices a while back.

      From what I can tell, a proprietary school has decided that the time for them to get out of the business is at hand. The manner in which they’ve done so appears to give at least some of their students an opportunity to attend a top-tier university instead. If you can point out the “crime”, I would more than willing to reconsider.

      Hint: Insinuations by news personalities or anyone else are not the same a “incriminating documents”.

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