Antioch College officials have credited the school’s chief financial officer with uncovering a $5 million accounting error – just a short time after he was hired last fall. Unfortunately, the discovery doubled the Ohio-based school’s projected deficit, and could push the troubled organization into bankruptcy by 2008.

After conducting a cash flow analysis in November 2006, CFO Tom Faecke uncovered what previous audits had missed: $5 million in restricted funds, that the college thought it had access to, had been spent already. As a result, the school is forecasting a $10 million deficit, according to the Dayton Daily News.

“Faecke came in and lined up the numbers and found a series of problems unfolding,” board vice chair Dan Fallon told the regional paper. “It’s sort of like someone robbed Peter to pay Paul … there was certainly no criminal behavior but nonetheless the numbers ended up in different columns.” Since the finding, Faecke “has put his foot down” to get the numbers to line up, Fallon added.

This is not the first time that officials declared the 155-year-old college — which is part of the six-school system of Antioch University — in a financial crisis. The school suspended operations during the 1881-1882 school year citing financial difficulty. Now, more than a century later, Antioch may have shut down again. The college’s board of trustees agreed last month to close the private liberal arts school next July, with the hope that they will re-open the doors in 2012.

Over the past few years, the college has operated at a loss, while officials worked to cut costs through staff layoffs and postponed capital investments. But those actions have led to further erosion of student enrollment numbers. To cover the deficit, the college also tapped into a $10 million gift that had been designated for scholarships, and it has relied on $1.5 million annual subsidies from its sister schools since the early 1990s.

With a $21 million operating budget, Antioch College has largely blamed its financial troubles on low, restrictive endowments and decreasing enrollments; the school projects to have a little more than 300 students on campus next year, down from 577 students in 2002, and 2,470 in 1972.

Still, despite its dire future, the college saw Faecke — who had worked in various finance roles in higher education for the past 30 years — as someone who could give the college financial stability, Fallon told the Dayton Daily.

Currently, Antioch is considering whether to hire an independent auditor. A consulting firm hired by the college found that a turnaround effort would be unsustainable.

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