Now-defunct Eastern Gateway Community College in Steubenville, Ohio, allegedly mishandled more than $17 million in federal student aid before closing in 2024, according to State Auditor Keith Faber. 

Faber recently released an audit of Eastern Gateway Community College’s finances from July 1, 2022, through June 30, 2023.

Forty-four issues were in the report including unauthorized expenses, financial reporting errors, issues with financial aid, and accounting problems, among others.

The audit said many of these issues led to the college’s financial issues and ultimate closure. 

Eastern Gateway closed in the fall of 2024 after financial and legal troubles. 

“This goes beyond sloppiness and honest mistakes,” Faber said in a statement. “The public should be outraged.”

The auditors are questioning all of Eastern Gateway’s Title IV Pell disbursements during fiscal year 2022-23, which total $17.28 million.  

“An institution’s record-keeping practices are paramount to ensuring a proper administration of Title IV programs,” according to the audit.

“The college failed to provide adequate source documentation … hindering a thorough review of the college’s distance education programs, including evidence that students commenced attendance.”

The college’s former chief financial officer and controller did not make a monthly reconciliation of all accounts which “led to inaccurate reporting in the annual financial statements,” according to the audit. 

“The college was unable to identify, assemble, analyze, classify, and record its transactions correctly or to document compliance with finance related legal and contractual requirements,” according to the audit. 

The audit revealed a lack of policies that led to unauthorized expenses and financial reporting errors.

There was no list of who had access to the college’s credit cards. The college had an Amazon account used to make purchases, but there was no policy for the account. There was no travel rental car policy, “which was a significant part of the college’s travel expenses,” according to the audit. 

The college opened a PayPal account in June 2023, but there was no policy for use of the account. 

“There is no evidence that the former chief financial officer and former controller approved or otherwise knew about college’s PayPal account,” the audit said. 

Some of the other issues in the audit include: 

  • The former chief financial officer did not get a certificate of estimated resources or certify the total funds from all sources available for expenditures to the county auditor. 
  • The college’s former board of trustees did not adopt a formal appropriation measure, meaning the expenses the college’s former chief finance officer and former controller made violated state law. 
  • Documents to show compliance with federal programs, including TRIO and adult education grants, were “incomplete and inconsistent and based on unreliable data systems,” according to the audit. 
  • The college did not form a records commission and public records were not properly handled, violating the state’s open records law.
  • The former board of trustees authorized a $13.6 million bond issue to pay for a Youngstown parking garage even though demolition costs would exceed the property’s value.

Ohio’s Special Investigation Unit is continuing to investigate the college. 

The U.S. Secret Service, the Ohio State Highway Patrol’s Computer Crimes Unit, the Ohio Narcotics Intelligence Center, the Columbus Division of Police, the Jefferson County Sheriff’s Office, and Ohio’s Special Investigation Unit all executed a search warrant in January 2024 related to the investigation.

Eastern Gateway Community College had campuses in Steubenville and Youngstown, and it mainly served students in Trumbull, Mahoning, Columbiana, and Jefferson counties. 

The college was placed on probation by the Higher Learning Commission in November 2021. 

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This story is republished from the Ohio Capital Journal. View the original article.