YOUNGSTOWN, Ohio – State Auditor Keith Faber is asking a federal court to pause the civil case between Eastern Gateway Community College and the company with which it contracted for its free college program.
“The auditor has a statutory duty to determine whether public money has been illegally expended,” a recent filing reads. “If the auditor determines that public money has been illegally expended – by either public or private entities – he is required to incorporate the findings into a certified audit report.”
Student Resource Center filed the lawsuit in 2022 in U.S. District Court in the Southern District of Ohio Eastern Division against Eastern Gateway, citing breach of contract.
The auditor’s filing said the Ohio Revised Code gives the auditor certain investigative powers to carry out such duties.
“Pursuant to this authority, the auditor is conducting an ongoing investigation into the use of public funds by Eastern Gateway Community College and related officers, directors, employees, contractors, entities, and other business associates,” the filing reads. “The scope of the auditor’s investigation, by necessity, includes contracts and business dealings with numerous private individuals and companies.”
Identification and recovery of ill-gotten or illegally expended public funds is of paramount importance, the filing adds.
It asks that proceedings in the civil case be stayed for six months.
Last January, the state auditor’s office special investigations unit, along with the Jefferson County Sheriff’s Office, the Ohio State Highway Patrol’s Computer Crimes Unit, the U.S. Secret Service, the Columbus Division of Police’s Digital Forensics Unit and the Ohio Narcotics Intelligence Center, searched offices at the Steubenville campus related to then-ongoing investigations concerning Eastern Gateway.
The college is dissolving because of financial issues, many of which stem from the free college program. The program allowed union members from across the country to take classes and earn degrees from Eastern Gateway at no cost to them. Students took classes virtually, and enrollment grew from about 4,000 to more than 40,000.
In August 2022, the U.S. Department of Education placed Eastern Gateway on Heightened Cash Monitoring 2, meaning the college had to use its own resources to credit student accounts and wait for federal student aid reimbursements from the federal department.
Also in 2022, the U.S. DOE ordered the college to end the free college program, saying that Eastern Gateway was charging students who received Pell grants more than those who didn’t. The program ended in August 2023, and enrollment dropped.