Crouse Hospital's School of Nursing flunks financial test

The Crouse Hospital School of Nursing in Syracuse is one of 149 private nonprofit colleges that failed the U.S. Department of Education financial responsibility test based on its financial condition in 2009, data published by The Chronicle of Higher Education shows. All private colleges that award federal student aid must participate in the education departments financial responsibility test, which...

The Crouse Hospital School of Nursing in Syracuse is one of 149 private nonprofit colleges that failed the U.S. Department of Education financial responsibility test based on its financial condition in 2009, data published by The Chronicle of Higher Education shows.

All private colleges that award federal student aid must participate in the education departments financial responsibility test, which is based on information from audited financial statements. The department develops a composite score for each school on a scale of 3 to minus 1, based on financial ratios that include net worth, operating losses and the relationship of assets to liabilities. A passing grade is 1.5 to 3.

Crouse's score was -0.3.

Bob Allen, a Crouse vice president, said the low score was puzzling.

The school is considered a department of Crouse Hospital, and the score was based on a review of the hospital's financial statements, Allen said. He said it appears the low score reflects an increase in the hospital's pension liabilities caused by the downturn in investment markets.

Crouse's overall financial health is strong, he said. The hospital has operated profitably for the last seven years, Allen said. The school also is doing well, he said. Its enrollment, currently 262, has increased by more than 100 percent over the last six years.

The National Association of Independent Colleges and Universities said prospective students should not rule out a college simply because it is listed. In many cases, colleges only appear on the list because of accounting methods that do not consider the schools' overall resources, according to the association. It also said many colleges end up on the list because of endowment losses that happened when the recession hit.

Other Upstate schools that flunked include Keuka College, in Keuka Park; Ellis Hospital School of Nursing, in Schenectady; and Albany Medical College.

Institutions that fail come under closer monitoring by the education department and must post a letter of credit equal to 10 percent of the federal student aid that goes to its students annually.

Contact James T. Mulder at jmulder@syracuse.com or 470-2245.