Cheyney faces allegations of misspending in lawsuits by former top administrators

Still under scrutiny by the federal education department for mismanagement of millions in financial aid, Cheyney University is facing fresher allegations of misspending, this time lodged by the former leaders of its vaunted honors academy.

The university, under the direction of Aaron A. Walton, “raided” funds that were earmarked for Cheyney’s Keystone Honors Academy and redirected them for other purposes at the financially struggling institution, former provost Tara Kent contends in a whistleblower lawsuit. She alleges funds were used to support students who did not meet the academy’s criteria and to pay for unrelated marketing and recruitment.

Her suit also says Walton failed to follow procurement policies and “in at least one instance … awarded/approved the award of a substantial, six-figure vendor contract without requiring any competing bids." And that when she raised objections with Walton — concerned the actions could jeopardize Cheyney’s state funding and accreditation — he fired her.

Months after Kent filed her claim early this year, a separate lawsuit raised similar claims. Filed in July by Nicole Rayfield, former honors academy director, it claims she was wrongfully terminated, in part, for complaining about misuse of scholarship funds, including that Cheyney “improperly gave scholarships with the purpose of inflating enrollment” so the university could keep accreditation.

Both suits name as defendants Cheyney, the historically black university in Delaware and Chester Counties. Kent also sued the Pennsylvania State System of Higher Education, which oversees Cheyney; Rayfield added Walton and Jeffrey Jones, the school’s executive director of enrollment management.

The state system, Jones, and Walton — a former Highmark executive who was hired in May 2017 to help turn around the troubled institution — have declined comment.

The allegations come as Cheyney fights to maintain accreditation, which has been jeopardized by its precarious finances. A 2017 Inquirer investigation found more than a decade of unstable and at times questionable leadership, as well as lax oversight and mismanagement. In 2016, an audit found that Cheyney had improperly diverted more than $3 million in scholarship money, research grants, and other restricted funds and used it to plug a hole in its budget, the investigation found.

By last fall, Cheyney, down to just 469 students, had lost two thirds of its enrollment.

The Middle States Commission on Higher Education plans to rule in November on whether Cheyney will keep its accreditation. A loss would mean the school no longer would be eligible to receive state and financial aid on which many students depend.

In a court filing to Kent’s suit, the state denied many of the allegations. On the procurement allegation, the system said Walton believed the website upgrade by Landesberg Design in 2017 was permissible as a “sole source” contract and did not require bidding. “But later it was determined that procedure was not applicable to the project, which was remedied by [the system],” said the filing.

Cheyney is still under scrutiny by the federal education department for mismanaging more than $29 million in financial aid, some or all of which it could be asked to repay. The school remains on “heightened cash monitoring,” which means it no longer receives advance payments for student financial aid but must request reimbursement.

Walton said Friday he expected a resolution with the education department within weeks. He said enrollment is up over 600 and the university is off to a good start this semester. And he said a recent review by Middle States went well.

“We still have a couple issues we need to resolve, but I don’t see any barriers to us resolving them by the end of October,” he said.

Walton said last month that Cheyney ended 2018-19 with a $2.1 million surplus, thanks in part to a $2.5 million unrestricted grant from the Pennsylvania Department of Education. The state system said a final ruling on Cheyney’s budget won’t be available until an audit is complete.

Kent’s lawyer, Thomas Sprague, called her “a highly respected educator with an impeccable reputation, who was dedicated to upholding professional standards throughout her 16-year tenure” and who "was unlawfully terminated for blowing the whistle on significant waste and wrongdoing at Cheyney.”

Kent spent her first decade as dean of the honors academy, which enrolled more than 100 students, according to the suit. She became assistant vice president, associate provost, and provost in August 2017, maintaining academy oversight for all.

The academy, long considered Cheyney’s bright spot, awards full tuition and room and board scholarships to state students with promising academic records. The state this year gave the program nearly $4 million, up from $2.3 million.

Students have been required to have a minimum GPA of 3.0 and SAT of 1080 to be admitted, according to the suit. (In its response, the state system acknowledged the requirements, but said it was “free to revise” them.) The academy for years has boasted a more than 90% retention rate, which it was able to maintain by adhering to rigorous admission standards, the suit said.

In summer 2018, Kent gave Walton a list of ineligible students who received scholarship funds, totaling $300,00 annually or $1.2 million over four years, the suit said. Such lapses could jeopardize the school’s accreditation, she told Walton. Walton, the suit said, became “irate” and accused her of being an “obstructionist.”

Kent disclosed her concerns to state system leaders. She was fired last September.

In her suit, Rayfield said Jones took control of the honors academy shortly after he was hired in May 2018 and “unlawfully and inappropriately awarded scholarships to unqualified students, denied scholarships to qualified students … and directed that certain scholarship funds go to unauthorized and improper sources.”

Rayfield’s attorney, Jennifer Bell, said they would have no comment.