MONTGOMERY, Ala. (AP) -- Moody's Investors Service downgraded Alabama State University's bond rating after preliminary findings from a forensic audit raised questions about financial waste and conflicts of interest.
Moody's said Friday it downgraded the university's revenue bond rating from A2 to A3 due to the university's deteriorating financial profile, uncertainty surrounding the university's relationship with the state following the governor's initiation of a forensic audit, and the diverted attention the investigation poses to university trustees and management.
University spokesman Ken Mullinax said the governor's release of the audit findings triggered the downgrade. He said the university has increased its debts in recent years to enhance facilities and develop new academic programs to remain competitive.
The governor, who is president of the ASU board, has called a meeting Oct. 28 to discuss the audit.