By Michael D’Onofrio
Days before the regional accrediting body is scheduled to meet to determine whether Cheyney University can keep its accreditation, doubts remain about whether the university has the $4 million surplus its president reported.
“I wouldn’t [call it a surplus] either,” said Cynthia Ashford Moultrie, the university’s executive director of finance and administration, noting that the revenue is in fact budgeted to pay off the school’s debt. “I am reluctant to call it a surplus.”
Marybeth Gasman, an expert on historically Black colleges and universities (HBCUs) at Rutgers University who looked over Cheyney’s financial documents obtained by the Tribune, also hesitated to call the money a surplus, but acknowledged it was murky.
While Cheyney may expect to raise more revenues than administrators expected to spend on operating expenses, Gasman said, the school’s past debt would wipe that out.
“That’s not a surplus to me, but it could just be an accounting technique,” said Gasman, who is a member of Paul Quinn College’s board of trustees, an HBCU in Texas.
“At the end of the day, they don’t have extra money.”
Kirk Dorn, a university spokesman, maintained the school had a surplus in an email.
Dorn said the Pennsylvania State System of Higher Education, which oversees Cheyney and 13 other schools in the system, instructed Cheyney officials to use the $4 million in excess revenue as “Planned Use of Carryforward,” a newly created line-item by the state that allows universities to set aside revenues for future spending.
“We were instructed by [the state System’s] Office of the Chancellor with our submission to offset that surplus in the Planned Use of Carryforward line item to zero out the surplus,” Dorn said in an email.
David Pidgeon, a spokesman for the state System, said in an email that officials support Walton and the progress Cheyney is making on behalf of its students but declined to confirm Dorn’s statement.
“That progress is evident in proactive budgetary measures like its carry forward line item, which will address in a meaningful way some of its financial obligations and allow the university to continue its student success-focused mission,” Pidgeon said.
Robert Bogle is the president and publisher of The Philadelphia Tribune and chairman of the university’s council.
New budget figures
The discrepancy over the school’s surplus comes after Cheyney officials released the university’s full proposed spending plan for next year following a Right to Know request by The Philadelphia Tribune.
Cheyney’s overall $39.8 million spending plan includes $10.8 million for salaries and wages, $4.7 million for scholarship discounts, and $16.8 million in other non-personnel costs.
Revenues in the budget include $5.4 million in tuition, $13.5 million in state funding, $9.7 million in federal grants, and $6 million in gifts. Enrollment was expected to increase by nearly 32% (149 students) over last year.
The new budget figures represent a nearly 8% increase over last year’s estimated spending plan, according to the university, but less than the schools 2017-18 budget ($41.3 million).
The 2019-20 spending plan was $10 million more than Cheyney officials acknowledged last month following a council of trustees meeting, when trustees voted to approve a $29.1 million budget.
The Tribune incorrectly reported on Oct. 11 that trustees passed the school’s full budget because Walton and school officials declined numerous requests to explain the budget at the time. Cheyney provided the Tribune a one-page summary of the $29.1 million spending plan in response to a Right to Know request.
Dorn said the trustee-approved budget was limited to educational and general budgets, as well as so-called auxiliary activities (e.g. dining, housing and student center revenues), but did not include restricted activities (e.g. sponsored programs and financial aid).
Comparatively, the Board of Governors for PASSHE approved a $23 million spending plan for Cheyney in October that was limited to educational and general budgets, precluding both auxiliary and restrictive activities.
Cheyney’s state system-approved budget does not list a surplus.
The only two universities showing a surplus next year were Millersville University and West Chester University. Cheyney also was the only state university to post a negative “Planned Use of Carryforward,” which Cheyney will use to pay off future debt.
Dorn said the school had one comprehensive budget, components of which were sent to different places to be approved.
“There’s one budget with three components and those components are pulled out and given based on the need from the approving party,” he said.
State Sen. Vincent Hughes, D-Philadelphia, said he supported Walton but declined to address the new budget figures during a brief interview in City Hall last week. Hughes is a member of Cheyney’s council of trustees and was instrumental in whipping up state support for the school.
“I’m not doing that,” Hughes, whose district includes Cheyney, said in response to questions around the validity of Cheyney’s surplus. “I’m confident in President Walton’s numbers.”
Cheyney has racked up $40.3 million in debt to PASSHE. But if the university balances its budget in the coming years and pays a total of $5.9 million of that debt, PASSHE will forgive the remaining $34.4 million.
Decision on accreditation approaching
On Thursday, the Middle States Commission on Higher Education, the regional accrediting body, will meet to decide whether Cheyney can maintain its accreditation.
The commission put Cheyney on probation in 2015. The commission 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.
The commission is scheduled to meet behind closed doors in an undisclosed location in Philadelphia to decide Cheyney’s accreditation status. A decision will be handed down within 60 days.
Gasman said Walton has made progress in recent years to turn the university’s past financial and academic issues around. The narrative around the school has been “more forward-thinking and hopeful than the conversations two, three years ago,” she said.
Gasman hoped the commission would take into account Cheyney’s progress, but was uncertain which way the commission’s decision would fall.
“Not everything is fixed at this point,” she said, “but [Cheyney] is getting stronger and stronger by the day.”