US Education Department officials said yesterday that Roxbury Community College's $3.5 million student aid budget - the financial lifeline of the school - is in jeopardy of being cut off now that state auditors have documented evidence of mismanagement by officials there.

The department already has limited the school's eligibility for federal financial aid to the next two years, instead of the traditional six, putting the school on notice to improve management quickly. If it doesn't, the school could be ordered to pay student aid out of its own pocket and then ask for federal reimbursement, a penalty that has caused other colleges to shut down.

Such a penalty would wreak havoc on a cash-poor, aid-dependent school such as RCC, where the vast majority of its 2,400 students - many of them black and immigrant residents of Dorchester and Roxbury - depend on federal Pell grants and work-study money to enroll.

''There has to be systemic change to protect the interests of taxpayers and students,'' said a high-ranking US Education Department official who requested anonymity because the audit is ongoing. ''There has to be a guarantee that these problems are cleared up, or else the college will be in serious jeopardy.''

This official volunteered that if RCC's federal aid eligibility was limited or lost, students could still attend Bunker Hill Community College in Charlestown and receive federal aid there.

Federal officials are concerned that financial aid problems have persisted at the college under President Grace C. Brown, RCC's leader since 1991. In addition to the current problems, Stephanie Babyak, a department spokesman, announced yesterday that US Education Secretary Rod Paige has fined RCC $201,000 for giving Pell grants to ineligible students from 1993 to 1995, chiefly to attend English-as-a-second-language classes.

In recent days, federal officials have been especially worried about a new draft state auditor's report that says college officials violated multiple federal student aid regulations in 2000 and 2001, leaving an estimated $3.2 million in federal money officially unaccounted for.

But RCC leaders said yesterday that the state audit report is deeply flawed and that they are working to correct and resolve all of the auditors' findings.

The draft audit, and the college's response, both of which were provided to the Globe, give starkly contrasting views of how the school is managed:

The auditor's office says that the college could not show documentation for federal aid in many of the 25 aid files reviewed, charging that some money may have gone to students who did not take classes and others who were ineligible for the money.

But RCC says an independent review of 25 aid files by the Higher Education Assistance Group found proper documents in 20 of them - the same files that the auditor had said were unauditable. College officials also say they were still assembling aid documents when the auditors asked for them.

Countless student aid files are missing, the audit says. It also quotes RCC's new financial aid director, Ray O'Rourke, as saying that 1,025 files are ''problematic'' because of a lack of data about whether aid recipients enrolled, completed classes, or made enough academic progress to qualify for grants.

No aid files are missing, the college replied, because it is not required by law to have them for all students. The college also said that the problematic files identified by O'Rourke were different than the ones reviewed by the auditor.

The audit says that financial aid problems stem not only from a lack of a sophisticated student-records computer system, but equally from ''poor management practices and director oversight.'' College officials laid the blame on a lack of computer technology and on unusual turnover in the financial aid office - which is on its third director within a year.

State officials yesterday accused RCC of being increasingly uncooperative with auditors. One official involved in the investigation said, ''The college is stalling in letting us do our work and getting a corrective action plan back to us. We can't verify what they've done or are doing.''

Brown and the chairman of RCC's board of trustees, Harry Sterling, issued a joint statement saying they needed more money to do their job. ''While it is hard not to feel under attack from all the negative and inaccurate media, we take the governor, comptroller, auditor, and Board of Higher Education at their word that they are working to address the results of past inequities regarding a lack of resources at RCC,'' they said.

In interviews, a college spokeswoman and Sterling declined to specify which media reports or comments by state officials were inaccurate.

Brown issued another statement finding a silver lining in the $201,000 fine, noting that it had been knocked down from an original penalty of $2.2 million.

A US government specialist on federal student aid, Brian K. Fitzgerald, said yesterday that RCC needed to improve its financial recordkeeping and obtain a new computer system quickly, or else it could face grave consequences.

''These are serious problems that the college is facing,'' said Fitzgerald, director of the congressional Advisory Committee on Student Financial Assistance. ''The Education Department auditors have looked at audit problems there before, and now state auditors have found some again. It seems like an ongoing problem that hasn't been remedied.''

Meanwhile yesterday, the RCC Faculty Assembly announced a vote of no confidence in the college's board of trustees for a lack of oversight at the college. Of the 58 full-time tenured professors and five part-time faculty members who voted, 41 backed the no-confidence measure, 10 opposed it, and two abstained.

The faculty plans to take a similar vote next month on Brown. Professors voted no confidence in her in 1996, after the earlier Pell grant scandal. The Board of Higher Education considered trying to remove Brown from her job, but a lobbying campaign by black legislators and community activists swayed members into keeping her on.

''This is a terribly dangerous moment for our school - the financial aid problems could close us,'' said Nancy Teel, an English professor who leads the assembly.

Sterling said last night that he was not aware of the vote or the specific concerns of tenured professors, but that he would seek to meet with them soon.

Daily Globe

-- Anonymous, October 20, 2001