By John Lyon
Arkansas News Bureau

LITTLE ROCK — Gov. Mike Beebe today directed the state Department of Higher Education to release an additional $5.9 million in lottery proceeds to fund college scholarships for nontraditional students.

Beebe said he made the decision after learning today that the state lottery’s net proceeds in its first nine months were $5.9 million higher than he had been told previously. He said higher education officials believed the lottery netted $76 million in that time, but in fact it netted $82 million.

The additional money is expected to provide scholarships for all of the 391 students on a waiting list for scholarships to attend a two-year institution and for nearly 1,000 of the 4,842 students on a waiting list for scholarships to attend a four-year institution.

Beebe noted that the only one category of students — nontraditional students — was not fully funded.

“Every incoming freshman who qualified for a lottery scholarship has received one, as have all current college students who have sustained enough credit hours throughout their time in school,” he said.

Beebe added that he may release more money if he can do so while still following the law. If he can, he will do so “as soon as possible” since classes are about to start, he said.

The cause of the confusion over the lottery’s proceeds was unclear today. Beebe said lottery officials had reported the $76 million figure to the Higher Education Department in what apparently was “a mix-up.”

State Lottery Director Ernie Passailaigue said lottery officials report their account balances to higher education officials every month, as required by state law. He said the account containing lottery profits had a balance of about $76 million as of June 30, but a July 14 deposit, which covered the month of June, brought the total to $82 million.

“My guess is that somebody wanted to know the trust account balance at June 30, which would have been for eight months,” and higher education officials kept using that number after it was updated, he said.

But Beebe spokesman Matt DeCample said that until recently, lottery officials had been using the lower number as well.

“As recently as last week there was correspondence between higher ed and the Lottery Commission that discussed the lower number,” DeCample said.

State Department of Higher Education Director Jim Purcell did not immediately return a call seeking comment today.

Higher education officials recently notified 25,445 students that they would receive the first Arkansas scholarships funded by the new state lottery. Of the more than 29,000 students who were not initially awarded scholarships, 5,251 met all the qualifications but were placed on waiting lists because of limited funds for nontraditional students.

The Legislature set aside $12 million for scholarships for nontraditional students, an amount that was outstripped by demand. The Legislature also set aside $41.5 million for what it classified as “current achievers,” or traditional students already in college, and ended up awarding $23.5 million in scholarships to those students.

Lawmakers placed no spending limit on scholarships for traditional incoming freshmen. The Higher Education Department awarded $52.4 million worth of scholarships to those students.

Beebe said the 2011 General Assembly will need to consider making adjustments to the scholarship program based on what’s been learned in the first year, which he said is not uncommon for a new program.

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Stephens Media reporter Jeff Arnold contributed to this report.