More than $17 million in questionable costs have been unearthed in the financial practices of Eastern Gateway Community College following a state audit for one of its last operational years, Keith Faber, Auditor of State, revealed on Tuesday. The audit exposed a bleak landscape of fiscal negligence, where college officials allegedly mishandled federal student aid programs due to serious deficiencies in recordkeeping and financial controls.
According to a report released by the Ohio Auditor of State Keith Faber's Office, the college is accused of spending funds without proper verification of their legitimacy and borrowing money without full disclosure of the details to lenders. The former chief financial officer of the college, who was supposed to prepare a monthly reconciliation of accounts, appeared to have been neglecting this duty, leading to a cash flow crisis that contributed to the school's eventual closure.
The auditors identified 44 findings in their report, which covered the period from July 1, 2022, through June 30, 2023. "This goes beyond sloppiness and honest mistakes," Auditor Faber said, signaling an outrage the public should feel toward the handling of funds earmarked for education. Additional financial audits are slated for release in the months ahead, which will provide further examination of the college's concluding years of financial activities.
The list of infractions runs deep, with the audit detailing unauthorized expenses and reporting errors. The report found that paperwork supporting expenditures through federally funded financial aid and other programs was patchy at best, drawing from "unreliable data systems." The audit uncovered that the college's former chief financial officer did not seek a certificate of estimated resources, nor did the college's former board of trustees adopt a formal appropriations measure. Disturbingly, as a result of the former chief executive officer's failure to provide an accurate appraisal of a parking garage facility, college officials were led to authorize issuance of bonded debt that notably included funds for an investment where the demolition cost outstripped the land value.
An investigation is currently in progress by the Auditor of State’s Special Investigations Unit (SIU), with potential for the issuance of findings for recovery in upcoming reports. The SIU, accompanied by authorities from various Ohio law enforcement departments, executed a search warrant in January 2024. These actions underline the severity of the mismanagement shaking the foundations on which Eastern Gateway Community College's financial integrity was presumed to stand.
