The university’s designation will not affect students, nor what goes on in the classroom, Gov. Mike DeWine said Friday.
“Students are going to be able to go to school, professors are going to be able to teach,” he said.
Central State alerted the state about discrepancies in its finances in mid-September, DeWine said.
Central State President Morakinyo Kuti assumed the role of president in July. Soon after he took office, he began reviewing the university’s finances, and was “unsatisfied” with what he found, including that Central State was not paying certain vendors on time, and the university’s 2023 audit had not been completed.
“It‘s not something that any university wants to be on,” Kuti said. “When I came on, I knew that things were not what they were supposed to be, so we wanted to inform the state as soon as possible, and we also wanted to get their assistance as soon as possible.”
Additionally, Central State’s online enrollment has plummeted, from about 4,000 students to 1,000, Kuti said.
DeWine said he has met with Duffey, Kuti and trustees Chairwoman Jacqueline Gamblin and that all are in agreement there is sufficient cause to warrant the chancellor placing the university under fiscal watch.
“It really does two things. It gets them some help. It also requires them to come up with a plan how they work out of this, out of this problem. So first you have to figure out how big the problem is, which we don’t know today. Second, once you figure that out, then they’ve got to come up with a plan to work their way through that,” DeWine said.
Ohio law designates eight items that could prompt a fiscal watch designation as part of a quarterly financial report. Central State has met five of them, said Jeff Robinson, director of communications for the state’s department of higher education.
The first is that Central State, which is in Wilberforce just north of Xenia, requested an advance of state subsidy money during the quarter covered by the report. Additional conditions include:
- The university “failed to make any payments to vendors when due...as a result of a cash deficiency or a substantial deficiency in the payment processing system.”
- The university has revised its original annual budget, so that it would result in “a substantially reduced ending fund balance or larger deficit,”
- The university “projects a significant negative variance between its most recently adopted annual budget and actual revenues or expenses,”
- The university is identified as subject to “heightened reporting standards or special monitoring status.”
Some steps already have been taken to address the issue, Kuti said, including leadership changes in “key areas of university operations,” as well as laying off 12 employees associated with the school’s online programs. The university also is postponing or limiting hiring to certain departments.
This is not the first time Central State has been placed on fiscal watch. The university was placed on fiscal watch in 2015, with leaders at the time citing declining student enrollment and students’ difficulty in qualifying for federal financial aid. Central State was removed from fiscal watch in 2017, after making sweeping budget cuts.
Kuti’s goal, he said, is to replicate or best the university’s previous two-year timeline.
“My goal, our goal as a university, is to get out as soon as possible,” he said. “We asked for the state support and assistance, because the future is bright at Central State University, but in order for us to get to that bright future, we have to get our house in order.”
DeWine also expressed confidence in the university’s ability to resolve the situation.
“Central State is very important to the Miami Valley. It supports the whole State of Ohio. It has not only a storied past, but it’s got a great future. We’re optimistic about Central State’s future, but this is certainly a bump in the road, … The quicker it can get dealt with, the better,” DeWine said.
The fiscal watch process requires consultation with the Ohio State Auditor’s Office, which will allow the university to take advantage of technical expertise and recommendations to strengthen their budgeting, financial accounting and reporting procedures, and the ODHE also will work in collaboration with Central State for additional accounting support.
“The department looks forward to working with Central State and the Auditor of State in navigating this challenge and restoring Central State University to a solid financial position,” Duffey said. “It is our hope that this work will position the university for a strong and successful future.”
Central State is the only public historically Black university in Ohio and one of only two land-grant universities.
Staff Writer Jen Balduf contributed to this report.
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