Central State University has been placed under fiscal receivership by Ohio Department of Higher Education Chancellor Mike Duffey.

Central State, Ohio’s only Historically Black public university, will adopt a financial recovery plan “that will outline a path to financial stabilization with the goal of ending fiscal oversight within three years,” according to ODHE.

“In the post-pandemic, higher education institutions nationwide are facing tight finances,” Duffey said in a statement. “Through today’s fiscal oversight statement, Central State University will receive assistance in adapting and positioning itself to become an even stronger and more competitive institution.”

I am eight criteria under Ohio law that would prompt a tax watchdog designation, and the central state has met five of them, ODHE spokesman Jeff Robinson said. The five criteria are:

• The state university requested an advance of state grant money in the reporting quarter.
• The state university has not made any payment to vendors when due during the reporting quarter as a result of a cash deficiency or a substantial deficiency in the state university or college’s payment processing system.
• The state university has revised its original budget for the fiscal year, and the revision will result in a substantial reduction in the ending fund balance or a larger deficit.
• The state university projects a significant negative variance between the most recently adopted annual budget and actual revenues or expenditures at the end of the fiscal year.
• The state university is identified by the federal government or a regional accrediting organization as being subject to enhanced reporting standards or special monitoring status, including, but not limited to, the Department of Education’s enhanced cash monitoring process. United States.

The state auditor will consult with the central government and the university must provide quarterly reports to its Board of Trustees and Chancellor. ODHE will also work with the Central State, providing additional accounting support.

Morakinyo Central State President AO Kuti became the university’s 10th president in July and said that He first noticed something was wrong with the university’s finances when he called for a financial review during the presidential transition. After becoming president, Kuti asked the university’s CFO at the time questions about finances, but Kuti “wasn’t satisfied with the answers he was giving me.”

“We thought the university had a lot more money in the reserves than he told us we had,” Kuti said.

Kuti said he “relieved (the CFO) of his debt” 30 days after becoming chairman and hired an interim CFO in August, who found “the situation was worse than we thought.”

He informed ODHE oas soon as he became aware of how dire the financial situation was and hThe goal is to get out of tax supervision in 18 months.

“(The) The fiscal oversight is due to the fact that our financial operations were not functioning in a proper manner,” said Kuit. “The future is bright at Central State … There is a lot of opportunity at Central State University, and we needed to get our fiscal house in order to achieve our goals.”

He met with members of the AAUP-CSU Executive Committee on Monday.

“Dr. Kuti was honest and forthright about the challenges we face, but he was optimistic that CSU will meet the financial goals necessary to lead the university back to fiscal health,” AAUP-CSU said in a statement. “AAUP-CSU has hope for Dr. Kuti’s leadership and looks forward to working with him to meet the challenges ahead.”

Ohio Governor Mike DeWine met with Duffey, Kuti and Central State Board Chair Jacqueline Gamblin.

“We all agree that there are sufficient grounds to warrant the chancellor placing the institution under fiscal watch,” DeWine said in a statement. “As the only public HBCU and one of only two land-grant universities in the state, Central State and its students are a unique and important piece of Ohio’s higher education landscape.”

Registration of the central state has had its ups and downs over the past decade.

Enrollment remained steady at about 1,700 students from fall 2014 to fall 2017, then increased in fall 2018 by 2,066 students, according to ODHE data. Enrollment doubled in fall 2020 to 4,066 and peaked at nearly 6,000 students in fall 2021.

Since then, enrollment has been declining. It decreased by 34% in the fall of 2023 and the university Preliminary enrollment this fall is 2,719 — down 23 percent, according to ODHE.

“That decrease was part of the reason our budget was not aligned,” Kuti said.

Part of their enrollment growth was due to an increase in online students through a partnership Central State had with the soon-to-be-shuttered. Eastern Gateway Community College. Eastern Gateway will close on Thursday after financial and legal problems in recent years.

When the partnership ended, Central State’s online enrollment dropped.

“Because we didn’t get the revenue we expected from these online students, our expenses exceeded our revenue,” Kuti said.

A little more than half of Central State students are in five majors — business administration, criminal justice, family education, psychology and exercise science, Kuti said.

Wilberforce University is the state’s only other HBCU, but it is a private school. Central State began as a department of Wilberforce University in 1887 and became an independent university in 1951. The universities are down the street from each other.

Central State became a land-grant institution in 2014. The Ohio State University is the only other land-grant university in the state.

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