Central State closer to shedding ‘fiscal watch’ status

A report released Thursday by the Ohio Auditor’s Office moved Central State University one step closer to shedding its fiscal watch status.

The auditor’s office provided Central State with a list of financial and accounting practices that the university could implement to improve its financial health.

In April, Central State was placed on fiscal watch after its financial health score dropped below state requirements for two years in a row. Subsequently, the auditor’s office released an audit in September.

However, the office decided to conduct another audit, looking into the university’s enrollment practices. The concern was that the university let students take classes despite owing money for tuition and fees — possibly allowing the school to get state funding for students who shouldn’t be there.

The new report addressed those concerns. The audit discovered that in 2013, 2014 and 2015, the university had students enrolled who did not pay tuition and fees.

“It’s not unusual for Central State to have (students with) unpaid balances. They were not following there own policy, and then it became a reporting to Regents issue,” said Bob Hinkle, deputy chief auditor at the auditor’s office.

Hinkle said Central State’s policy is to remove students if they do not pay their bills or set up a payment plan after 14 days into the semester.

The audit found that the university did not inform the state about the students’ unpaid bills prior to receiving state funding for the students. But Hinkle said the school would still have received the funding for those students due to their “disadvantaged” status — a status that includes minorities, nontraditional and low-income students.

Central State told the auditor that its finances have improved.

“Central State University faced significant economic challenges during the FY13 and FY14,” CSU wrote in the audit. “In response to these challenges, the university aggressively reduced operating expenses, secured additional state capital funding, realigned departments and retired contingent liabilities.

“These actions resulted in an increase in net expendable assets, which is a key driver in the ratio compilation and an indicator of overall financial health.”

Central State also said it has already started to address some of the auditor’s concerns.

For Central State to shed its fiscal watch status, the Ohio Department of Higher Education and the auditor’s office must agree that the university’s finances are in order. Hinkle did not provide a timeline for such a scenario.

Central State and Owens Community College in Toledo are both on fiscal watch — the first higher education institutions in the state to receive that warning in the 15 years since the status was created.

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