Ohio HBCU Piled Up $204M in Leases Its Board Never Approved
Summary
Central State University, one of Ohio's two historically Black public universities, has been in state fiscal watch since October 2024 -- its second time in a decade. An Ohio Auditor of State report found the university had committed to $204,017,538 in leases and lease-like debt, most never brought to its own Board of Trustees for approval, including $86.3 million across three of four multi-decade student-housing agreements. At the same time, $34,873,701 in tuition sat uncollected with no bad-debt process running, the university's primary bank account had not been fully reconciled since June 2022, and both of its fundraising foundations lost or risked losing their federal tax-exempt status for failing to file required paperwork. The state's own recovery-plan math shows the university's cash reserves running dry by June 2025.
A second fiscal watch, worse than the first
This is not Central State's first time under state financial supervision. The Ohio Board of Regents placed the university in fiscal watch on April 21, 2015⧉, after its composite financial-ratio score fell to 1.0 -- well below the state's 1.75 threshold. The university worked its way out: the Auditor of State's office certified an effective accounting system that April 2017⧉, and fiscal watch was lifted. Seven and a half years later, on October 25, 2024, the Ohio Department of Higher Education declared Central State in fiscal watch again -- and the numbers behind this second declaration are far larger than anything documented the first time around.
$204 million in leases, most the Board never saw
The Auditor's report devotes a section to what it calls "Potential University Debt" -- agreements the university entered after its last completed financial statements (fiscal year 2022) that still need to be evaluated for proper accounting treatment. Starting in fiscal year 2018 and continuing through fiscal year 2024, the university signed four separate leases with University Housing Solutions, LLC for the construction of student housing, running 25 to 31 years and totaling $197 million in required payments. Only the fourth of those four agreements -- the largest, at $110,713,430 -- was ever approved by the Board of Trustees. The other three, worth a combined $86,319,358, were not. Separately, during fiscal years 2023 and 2024 the university took out four cash-advance agreements structured as leases with TEQLease, Inc., using university equipment as collateral, totaling $6,801,296; none of those four went to the Board either. University policy requires Board approval for any lease exceeding $50,000 in total payments -- a threshold the report notes one of the university's own vehicle leases crossed without ever receiving it.
View data as table
| Student housing lease, Board-approved | $110,713,430 (54.3%) |
|---|---|
| Student housing leases, not Board-approved | $86,319,358 (42.3%) |
| Cash-advance leases, not Board-approved | $6,801,296 (3.3%) |
| Vehicle leases and laundry-services lease | $183,454 (0.1%) |
| TOTAL | $204,017,538 (100.0%) |
Money nobody is collecting, and a ledger nobody can close
The lease commitments sit alongside a parallel failure to collect what students owe. As of December 31, 2024, the university's own tuition aging report showed $34,873,701 outstanding -- and university policy requiring an annual Controller and Bursar review of that balance, with unpaid accounts referred to the Attorney General for collection, was not being followed at all: no review, no referrals, no bad-debt allowance calculated. The university's basic bookkeeping was in a similar state: the last time its primary operating bank account was fully reconciled was June 30, 2022, and every reconciliation attempted since turned up unresolved differences. By February 2025, the account's own outstanding-check report listed 47,061 uncleared checks totaling $329,432,136 -- a figure the report itself frames as evidence the account had gone years without being properly cleared, not money actually owed.
The recovery plan the university filed with the state to end this second fiscal watch projects its cash reserves running out by June 2025, a shortfall of more than $1.19 million. Separately, the university also failed to file or remit school-district income tax for 2022 and 2023 -- $2,179.15 and $2,096.43 respectively, each including a $500 failure-to-file penalty -- and the state referred the matter to the Ohio Attorney General's Office, resulting in a Greene County Common Pleas Court lien over the 2022 tax year. The university had, prior to 2024, also been paying avoidable penalties and interest for submitting employee pension withholdings to the state's retirement systems late.
View data as table
| Tuition left uncollected (as of Dec. 31, 2024) | $34,873,701 |
|---|---|
| Lease commitments made without Board approval | $93,120,654 |
| Projected cash shortfall by June 2025 | over $1.19 million |
The university's own foundations lost their tax-exempt status
Central State relies on two affiliated nonprofits to raise money on its behalf. Neither had filed the paperwork required to keep that fundraising tax-advantaged. The Central State University Foundation had not filed a Form 990 for fiscal years 2020, 2022, 2023, or 2024; after three consecutive years of non-filing, the automatically revoked its 501(c)(3) status on November 15, 2024. The university's other affiliate, the Central State University Innovation and Development Foundation, had missed the same filing for fiscal years 2023 and 2024 and faced the identical automatic-revocation clock. The paperwork gaps compound an accounting error: when the Foundation gave the university a $1 million gift in fiscal year 2021, the university recorded the money arriving in its own General Fund but never recorded it leaving the Foundation's tracked balance -- leaving the Foundation's funds in the university's books overstated by $1 million ever since.
The takeaway
- Central State University committed to $204,017,538 in leases and lease-like agreements, most never brought to its own Board of Trustees for approval -- including $86,319,358 across three of four multi-decade student-housing leases and $6,801,296 in equipment-collateralized cash advances.
- $34,873,701 in tuition sat uncollected as of December 2024, with the university's own bad-debt review, collection-referral, and allowance policies simply not being followed.
- This is the university's second fiscal watch in a decade -- placed under state supervision in April 2015, released in April 2017, and declared in fiscal watch again on October 25, 2024, this time with far larger numbers behind it.
- Basic financial controls had broken down: the primary operating account hadn't been fully reconciled since June 2022, and the state-mandated recovery plan itself projects a cash shortfall of more than $1.19 million by June 2025.
- Both of the university's fundraising foundations fell out of compliance -- one had its 501(c)(3) status automatically revoked in November 2024, the other faced the same clock -- while a separate accounting error left $1 million in foundation funds double-counted in the university's own books.
The lease-category subtotals, percentages, and the $329 million outstanding-check framing reflect this outlet's own arithmetic and reading of the Auditor of State's printed figures (methods and caveats in analysis.json); the report itself prints the individual line items and the $204,017,538 grand total but does not itself group them into the categories charted here. archive.org's Save Page Now returned a usable snapshot for the main Financial Accounting Report and the 2017 fiscal-watch-release release; its existing snapshot of the 2015 press release had a malformed capture URL, so that citation points directly at the Auditor of State's own hosted copy instead. A blind adversarial verifier, working from the primary documents alone with no access to this draft, independently checked every itemized fact; see verification.json.
Sources(3) ▾
- Ohio Auditor of State (Keith Faber), Central State University, Greene County, Ohio -- Financial Accounting Report (Report on Accounting Methods) (2025-07-03) — Mandatory report required by Ohio Administrative Code 126:3-1-01(D)(1)(b) after the Ohio Department of Higher Education declared Central State University in a state of fiscal watch on October 25, 2024 -- the University's second fiscal watch in a decade. Source for every dollar figure in this piece except the two fiscal-watch-history facts: the $34,873,701 uncollected tuition balance and absent bad-debt policy (p. 23-24); the $204,017,538 total across the University's catalogued lease and lease-like agreements, including the $197,032,788 across four student-housing leases with University Housing Solutions LLC of which only the fourth was Board-approved, the $6,801,296 in TEQLease Inc. cash-advance leases none of which were Board-approved, and the unapproved vehicle lease exceeding the University's own $50,000 Board-approval threshold (p. 47-50); the projected $1.19 million cash shortfall by June 2025 (p. 65-66); the unremitted 2022-2023 school district income tax and resulting county court lien (p. 42); the pre-2024 pension-withholding penalties and interest to OPERS and STRS (p. 43); the reconciliation breakdown showing the University's primary operating account was last fully reconciled June 30, 2022, and the resulting $329,432,136 in unresolved outstanding-check entries the University's own February 2025 report could not clear (p. 54); and the revoked and at-risk tax-exempt status and $1 million overstated balance of the University's two fundraising foundations (p. 70-75). ohioauditor.gov · original document
- Ohio Auditor of State (Dave Yost), Recommendations Provided to Central State University (2015-09-17) — News release documenting Central State University's first fiscal watch of the past decade: placed in fiscal watch by the Ohio Board of Regents on April 21, 2015, after composite financial-ratio scores of 1.30 (2013) and 1.0 (2014) fell below the 1.75 threshold set by state law (Senate Bill 6). ohioauditor.gov · original document
- Ohio Auditor of State (Dave Yost), Statement from Auditor Yost on Release of Central State University From Fiscal Watch (2017-04-27) — News release documenting the end of Central State University's first fiscal watch: the Auditor of State notified the Ohio Department of Higher Education in March 2017 that the University had implemented an effective financial accounting and reporting system, and the University was released from fiscal watch that April -- about seven and a half years before its second fiscal watch declaration in October 2024. ohioauditor.gov · original document
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An Ohio Auditor of State report⧉ on Central State University -- one of Ohio's two historically Black public universities, placed in state fiscal watch on October 25, 2024 -- found the university had committed to $204,017,538 in leases and lease-like financing agreements, most of which never went before its own Board of Trustees for approval. $197,032,788 of that total is four multi-decade student-housing leases with a single vendor; only one of the four was ever approved. At the same time, $34,873,701 in tuition sat uncollected with no bad-debt process running, and the university's own recovery-plan math shows its cash reserves running dry by June 2025.