Audited statements show Pittsburgh Technical College violated standards of financial responsibility
In roughly two weeks, a new semester will begin for students, faculty and staff at Pittsburgh Technical College in Oakdale, but there are major questions about the financial standing of the college and what its future looks like.
>> 11 Investigates obtains copies of report conducted after complaints at Pittsburgh Technical College
This comes after 11 Investigates first reported on turmoil at the technical college in October, including an independent investigation, suggesting potential misconduct and an autocratic leadership style among the President and CEO, Dr. Alicia Harvey-Smith. There was also a vote of no confidence.
Now, 11 Investigates was able to get a copy of these audited financial statements from Pittsburgh Technical College. Right on the first page, the report makes it very clear there is “substantial doubt about the college’s ability to continue.”
The audited financial statements ending in June of 2023, show PTC is losing a lot of revenue and the college violated the general standards of financial responsibility. The technical college is down 42% of its revenue from tuition, fees, housing, food service and the bookstore since 2020. This is despite millions of dollars in COVID-19 funding awarded to PTC.
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Additionally, financial statements show the college lost $8 million in the year ending in June of 2023.
According to the report, PTC also earned a composite score of 0 out of 3.
The auditor’s report says, “the College entered into a Forbearance Agreement (Agreement) with the holders of the bonds on September 14, 2023 ...” “as part of the agreement, the college is required to consult in good faith with advisors of the bondholders to consider any merger acquisition or sale of substantially all of the college’s assets.”
The Department of Education says PTC failed to report the default and forbearance agreement to them in a timely manner, “to monitor the institution for compliance with the general standards of financial responsibility.”
PTC accreditor, the Middle States Commission on Higher Education says the college also failed to meet a November 15 deadline to submit a supplemental report to them. The accreditor moved the deadline to 1-5-24. PTC says all information has been provided to the accreditor and that extension was not needed.
We reached out to PTC for comment on the auditor’s report. The technical college says they remain fully accredited and have no plans to close, adding:
“Similar to other higher education institutions, PTC is facing declining enrollment and higher costs. Therefore, the college is exploring a variety of different scenarios, including mergers, acquisitions, partnerships and other creative thinking to ensure financial stability for the future.”
As for that composite score of 0, PTC says they have not received an official score from the Department of Education.
Multiple sources tell 11 Investigates, PTC is in talks with Penn College of Technology, which is affiliated with Penn State and that a special board meeting is scheduled for next week.
We asked PTC several questions about the auditor’s report. Below are the questions and responses in full:
Q: WPXI
MSCHE says PTC failed to meet the November 15, 2023 deadline to submit a supplemental report. Has PTC submitted the report with the new due date of 1/5/24? If so, are you able to provide a copy?
A: Kirkpatrick Group & Dr. Alicia Harvey-Smith
All requested information to Middle States Commission on Higher Education accreditors has been provided. The January 5 date represented an extension that was not needed.
Q: WPXI
“The audit report for the year ended June 30, 2023, indicates a substantial doubt about the college’s ability to continue as a growing concern.” What is PTC’s response to this statement and what message does the college want to send to faculty/staff/students and key stakeholders?
A: Kirkpatrick Group & Dr. Alicia Harvey-Smith
First and foremost, Pittsburgh Technical College remains a fully accredited College and has no plans to close. We do not take for granted that we are educating the next generation of workers in Pittsburgh and the surrounding areas. Now and forever, our focus is on PTC students and their success.
Nearly every college and university across the U.S. is currently dealing with stagnant enrollment as a result of the global pandemic and increasing costs. At PTC, we are focused on developing and implementing strategies to improve both enrollment and retention of students. Such strategies include expanding outreach to high schools and CTCs, creating additional dual credit pathways, and developing a strategic enrollment management plan to guide improvements.
Each year, as a matter of standard practice PTC completes an independent audit. The findings of the audit support our near- and long-term planning processes.
Q: WPXI
PTC lost over 8M in the year that ended with June 30. “The College entered into a Forbearance Agreement (Agreement) with the holders of the bonds on September 14, 2023, as the College was going to fail debt covenants ...” “As part of the Agreement, the College is required to consult in good faith with advisors of the bondholders to consider any merger acquisition or sale of substantially all of the College’s assets.” Has the college been consulting with advisors to consider mergers or acquisitions?
A: Kirkpatrick Group & Dr. Alicia Harvey-Smith
It is standard operating practice to regularly evaluate all potential operating models that would allow us to strengthen our mission and educational services, ultimately for the continued success of current and future students.
It is smart business practice for all different types of organizations to always consider all options. Similar to other higher education institutions, PTC is facing declining enrollment and higher costs. Therefore, the College is exploring a variety of different scenarios, including mergers, acquisitions, partnerships and other creative thinking to ensure financial stability for the future. All of these different scenarios, regardless of outcome, include remaining accredited and prioritizing current and future students.
Q: WPXI
“As of June 30, 2023, the College had a composite score equal to 0.0 out of a possible score of 3.0. As a result of the score for the year ended June 30, 2023, and the going concern, it is likely ED will require the College to post either a 10% or 50% letter of credit to be placed on Heightened Cash Monitoring 2 which requires ED to approve the student Title IV disbursements before the College receives the funds.”
What is the college’s response to the composite score equal to 0.0?
A: Kirkpatrick Group & Dr. Alicia Harvey-Smith
PTC has not received its official score from the Department of Education (DOE) for 2023. For the purposes of determining an institution’s financial responsibility score, the only valid score is calculated and communicated by the Department of Education. PTC has met the financial responsibility score requirements (1.5 or higher) for the last several years. To reiterate, the score you reference above did not come from the Department of Education.
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