State agency approves Cheyney’s proposed budget, but questions remain

Cheyney University’s budget figures don’t add up and school officials won’t say why.

The 2019-20 proposed spending plan that Cheyney’s Council of Trustees approved this month shows $6 million more in expenditures than the anticipated budget the Board of Governors for the Pennsylvania State System of Higher Education (PASSHE) approved last week.

And while Cheyney President Aaron Walton has touted a surplus for the financially distressed school for months, the budget approved by the Board of Governors does not show one.

Walton declined multiple requests for comment; his assistant did not offer an explanation for why he would not comment.

PASSHE spokesman David Pidgeon said Cheyney “appears to be following the protocols that are in place for all 14 universities” in submitting its proposed budget submitted to the state.

Yet Pidgeon could not definitively account for the differences in Cheyney’s projected spending.

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“It’s Cheyney’s choice to tell you that breakdown because I don’t speak to individual budgets per university,” he said. “It’s Cheyney’s choice to tell you how and when that divide is broken down.”

Janelle Williams, an expert on historically Black colleges and universities at Rutgers University’s Graduate School of Education, said the gap between Cheyney’s proposed spending plans did not raise any red flags — yet.

The additional anticipated funding could stem from a number of sources, including donations and endowments, but Williams, a Cheyney alumna, could not say for certain with the limited information provided by the university. She hoped Cheyney officials would reveal that in the future.

“By the next council of trustees meeting,” she said, “the context should be provided. … If at that point there’s no explanation from them, it would be, to me, a red flag.”

Cheyney leaders have remained tight-lipped about their proposed budget and fundraising dollars for months.

Last week, the Board of Governors for PASSHE approved a proposed $23.3 million spending plan for Cheyney, as well as spending plans for the 13 other schools in the Pennsylvania system to prepare for next year’s state funding request, among other things.

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The PASSHE-approved budget shows $27.3 million in revenues, but $4 million — nearly 15 percent — is set aside to pay off future debt. Cheyney is the only state university to set aside any portion of its revenues to pay off debt, according to state data.

Cheyney’s revenue projections include $5.4 million in tuition, $1.8 million in fees, $13.5 million in state funding and $6.6 million from “all other revenue,” according to state documents.

The school was expected to spend $11 million for salaries and benefits and $8.7 million for services and supplies, among other things.

Only two universities — Millersville University and West Chester University — anticipated surpluses, according to state documents.

The figures Cheyney submitted to PASSHE were well short of the proposed $29.1 million spending plan the school’s Council of Trustees approved on Oct. 8. That budget showed $33 million in revenue with a $4 million surplus, according to a one-page budget summary provided in response to a Right to Know request filed by The Philadelphia Tribune.

Robert Bogle is the president and publisher of The Philadelphia Tribune and chairman of the university’s council.

The annual spending plans submitted to the Board of Governors are limited to education and general expenditures, which include salaries and benefits. The state-approved plans do not account for revenue from so-called restricted and auxiliary activities, which include funding from financial aid, sponsored programs and campus book stores, among other sources.

The one-page budget summary might have included revenue from restricted and auxiliary activities, though that is not clear and Cheyney officials have declined to provide additional details.

University officials and each school’s council of trustees are responsible for managing funding for restricted and auxiliary enterprises. While PASSHE has policies in place regarding these enterprises and eventually becomes aware of the revenue sources, the agency cannot take enforceable action regarding them.

Cheyney has racked up $40.3 million in debt to PASSHE. But 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.

In the coming weeks, the Middle States Commission on Higher Education, the regional accrediting body, will 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, although the school could appeal the decision.

The U.S. Department of Education also continues to monitor Cheyney over administrative oversight issues related to the spending of $29.5 million in federal funds it received between 2011 and 2014. The department first put Cheyney on a watchlist in 2015.

The commission is scheduled to meet Nov. 21 behind closed doors in an undisclosed location in Philadelphia to decide Cheyney’s accreditation status. A decision is expected to be handed down within several days after the meeting, but could take up to 60 days.

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