Cheyney University approved a budget – but how much does it really say about what they’re spending?

Cheyney University’s Council of Trustees approved its 2019-20 spending plan this week in its last meeting before it finds out whether the university will keep its accreditation.

President Aaron Walton and Robert Bogle, the president and publisher of The Philadelphia Tribune and chairman of the university’s council, declined to provide details about the budget, saying they could not share the budget figures until the Pennsylvania State System of Higher Education (PASSHE) reviews the state college budgets next week.

“We have to submit the budget to the system before we say anything about the budget,” Walton said.

Cheyney’s budget should be available to the public at this point, said Erik Arneson, executive director of the state’s Office of Open Records.

Cheyney is a state university, so it is subject to the state’s Sunshine Act (open meetings law) and Right to Know Law.

“It would be an extremely rare situation where an agency — again, any agency — votes on a budget, adopts that budget, and then can’t release it,” Arneson said. “We’ve never had a case like that before us and it’s hard for me to envision circumstances where that would be a result.”

When the Tribune filed a Right to Know request for the “2019-20 proposed spending plan and/or budget which Cheyney’s Council of Trustees discussed and voted on” after the meeting, Cheyney provided only a one-page summary of the budget with numbers that appeared to differ from Walton’s previous public statements about the school’s budget projections.

Final agency budgets are typically multi-page documents that lay out categories of revenue and spending for the upcoming year, Arneson said. Although Arneson did not see the one-page summary budget provided by Cheyney, he said he doubted Cheyney’s response was adequate.

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“If an agency votes on a full budget that is in the tens of millions of dollars, and then receives a request for the budget that was voted on, it would be very surprising to me if the appropriate response would be that,” Arneson said.

Walton did not respond to multiple requests for comment about the budget summary.

The budget summary

The budget summary shows Cheyney officials expect to spend about $29.1 million in 2019-20 — down about 11.8 percent from last year’s estimates. The projected expenditures represent an ongoing decline in expenditures, which were $43.9 million in the 2016-17 school year.

The budget summary also shows Cheyney officials expect to have a $4 million budget surplus — nearly $2 million more than what Walton said in August and during his prepared remarks on Tuesday.

Walton reiterated on Tuesday that a fundraising campaign raised $4.4 million through June, which allowed Cheyney to balance its budget for the first time in nearly a decade and attain a surplus. However, documents previously obtained by the Tribune through a Right to Know request appeared to show the school received far less in donations during that time period. Walton has not responded to multiple requests for comment on those figures.

A $4 million projected surplus would represent a remarkable turnaround for the school that anticipated no surplus in 2018-19, and had deficits of $3.9 million in 2017-18 and $6.9 million in 2016-17, respectively, according to university data.

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The summary of Cheyney’s proposed budget also included:

• $7.2 million for tuition revenue — up about 84 percent from the previous year
• $25.9 million for non-tuition revenue — down about 21 percent from the previous year
• $12.5 million for personnel costs — down about 9.8 percent from the previous year
• $14.3 million for non-personnel costs — down 32 percent from the previous year

Bogle said he expected PASSHE to approve Cheyney’s budget.

“It’s a budget that shows a surplus,” Bogle said. “It shows that we’re fulfilling the academic requirements that we intend to provide for our students. There isn’t any sound reason that we wouldn’t [have the budget approved].”

The university’s debt

Cheyney owes PASSHE $40.3 million, a state system spokesman said in an email this week.

If the university balances its budget this year and for two more consecutive years, and pays a total of $5.9 million of that debt, PASSHE will forgive the remaining $34.4 million.

The budget summary the university provided shows Cheyney expects to make $2.28 million in debt principal payments in the 2019-20 school year, but it does not indicate who will receive those payments.

Enrollment is up

Cheyney officials said the university’s fall enrollment was up nearly 32 percent (149 students) over last year, said Erika Shehata, director of institutional advancement.

That figure represents the largest increase in enrollment for any school in the state system, according to figures released by PASSHE this week.

Overall enrollment for the state system was down 2.6 percent for the fall semester, according to PASSHE. Three other schools saw enrollment increase, but each by 2 percent or less.

Cheyney still has the lowest enrollment of the 14 universities in the state system.

The school, which is the oldest Black university in the country, has 618 students enrolled for the fall semester in 2019. The state school with the next-lowest enrollment is Mansfield University, with 1,683 students.

The freshman retention rate (the number of first-time students last year who returned this fall) hit a two-decade high of 70 percent, Shehata said.

However, the latest enrollment figures were the second-lowest at the school in the last decade. Enrollment at the school has been on a downward trend for 10 years — from a high of 1,586 in 2010. In 2018, enrollment at the school plummeted 38 percent from the previous year, according to state figures.

A federal whistleblower lawsuit filed in July alleged Cheyney has inflated enrollment figures and misused federal scholarship dollars.

Accreditation at risk

PASSHE’s Board of Governors will meet on Oct. 16 and 17 to review financial audits for 2018-19 spending plans and 2019-20 proposed budgets for the 14 member schools.

Weeks later, on Nov. 21, the Middle States Commission on Higher Education, the regional accrediting body, will decide whether Cheyney will be allowed to keep its accreditation.

The commission put Cheyney on probation in 2015, citing concerns with the way the university has managed its finances.

That same year, the U.S. Department of Education began monitoring Cheyney over administrative oversight issues regarding $29.5 million in federal funds it received between 2011 and 2013. The department again placed Cheyney on its“Heightened Cash Monitoring 2” list in the most recent update in September.

The Middle States Commission on Higher Education has twice given the university an extension to balance its budget, pay off its debts and develop better financial practices. There is no mechanism to extend the probation for a third year.

Daniel Greenstein, chancellor of the state system, said last year that Cheyney would likely lose its accreditation this year due to mounting debt.

If Cheyney loses its accreditation, the university cannot participate in federal aid programs, cutting off millions of dollars in federal funding to the school and its students. Approximately 72 percent of first-time students received federal grants and 78 percent received federal loan aid in the 2017-18 school year, according to federal data. Loss of accreditation and federal funding would effectively shut down the university.

Walton said university officials are doing what they can to prevent that outcome.

Bogle said the challenges facing Cheyney were “probably the most critical” in the school’s history.

“I believe, not only have we come a long way, but we will be successful,” he said.

Asked what he would tell Cheyney students about the issues facing the university, Walton said he and university officials were “staying focused on what is in [students’] best interest.”

“Our role,” Walton said, “is to make sure we provide a quality education and wholesome experience for the students. … Their role is not to try to worry about what’s going on at the university. That’s my job.”

Michael D’Onofrio is a reporter for the Philadelphia Tribune, where this story first appeared.