Auditor identifies rampant waste of public resources at closed school: 'The public should be outraged'
Eastern Gateway Community College collapsed under financial mismanagement, illegal spending, and missing records.
Eastern Gateway Community College mismanaged over $17 million in federal student aid before shutting its doors, according to a scathing audit released Nov. 25 by Ohio Auditor of State Keith Faber.
The audit uncovered 44 issues, including illegal spending, nonexistent financial controls, and missing or flawed documentation for nearly every federal dollar the college handled during the 2022–2023 fiscal year.
Auditors say the institution failed to verify whether aid went to eligible students or whether students even attended class.
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“This goes beyond sloppiness and honest mistakes” Faber stated. “The public should be outraged.”
The now-defunct college reportedly operated with no formal budget, borrowed millions without disclosing risks, and failed to track how taxpayer dollars were spent. A $13.6 million bond issue to purchase a Youngstown parking garage proceeded despite warnings that demolition costs would exceed the property’s value.
Auditors also found that Eastern Gateway’s records were so disorganized that they couldn’t confirm compliance with federal programs, including TRIO and adult education grants.
The college never formed a public records commission, failed to maintain open records, and bypassed basic state law requirements for financial operations.
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The fallout from this audit isn’t over.
Ohio’s Special Investigations Unit is still probing the college, and a criminal investigation backed by the U.S. Secret Service, Ohio State Highway Patrol, and other agencies is ongoing. Authorities executed a search warrant in January 2024, and future recovery orders are expected.
Eastern Gateway, once a public institution funded by federal and state taxpayers, now serves as a cautionary tale of what happens when financial oversight collapses.
