At San Diego Christian College in Santee, students paid $30,000 a year to attend a school that bills itself as one of the top Christian colleges in Southern California. And I new source investigation races -- raises questions about their money.Reporter: 700 students attend a private nonprofit school that offers dozens of online degree programs from business management to biblical studies. For finances have some doubting the college's future. Students complain of a lack of facilities and overworked investors. Staff feel they are underpaid. And previous vendor claims the school fell behind on payments.Our relationship with the college is $80,000 behind on payments.Reporter: And I new source review found San Diego Christian College failed to account for more than $20 million in expenses from fiscal 2012 to 2014. Money that is supposed to be detailed on public tax returns. The college is chief financial officer Steve Cheney told new source that he could not remember where the $20 million went but insisted students should not be worried. The institution is on solid footing. Money problems at the school mounted over the past few years. In 2012, and accrediting agency raised concerns about the college financial planning and what it called a very sketchy to your desk year budget. Last year and noted irregularities in his budgeting. And it was concerned about the college's financial sustainability. The U.S. Department of education issued the college a failing financial score in 2014. An outside audit found a dozen deficiencies. Marcus Owens is a former official with the Internal Revenue Service. He says the root cause of the school's problems comes down to management and Cheney working remotely from his accounting company in Northern California.If they had a chief financial officer on campus 40 hours a week, I suspect they would not have the gaps and problems they are facing which are in the order of somebody does not have the time to pay close attention to what is going on.Reporter: The money woes are affecting teachers and students. Caitlin Brooks is a part line -- former part-time professor. She says it was a common understanding that the college was operating on a tight budget. That led to flow teacher retention .they have qualified people to they have a problem keeping them.Reporter: He says students are better off three years ago then now .my first year here I had one professor for every discipline I have.Reporter: Now he says professors can teach up to three subjects. Cheney dismissed the concerns. He says the school serves up to 2000 students with its staff. That 20 million with expenses unaccounted for was qualified as other in the tax returns. The IRS requires documentation to explain the cost. None was provided. Cheney says he was aware of the mistake in 2014. He contacted the IRS and sitting documentation. But was told not to worry about to -- sitting in an amended tax return .that is not what the IRS does. The IRS will accept the missing schedule and associated with it -- the return.Reporter: Cheney tells us that he will have to refresh his memory about the 2012 and 2014 returns. He says he will provide them. He did not. The college's Board of Trustees which is responsible for the school's finances did not respond to requests for interviews or referred I new source to its attorney Tracy Warren. Warren wrote in emails that officials had no comment. The school would not provide documentation, and I new chores should cease and desist efforts to reach board members. Joining me now is I new source reporter Megan Wood. This is a school that a lot of people might not have heard of before. What is San Diego Christian colleges history. How long has it been around.San Diego Christian is a private school it's been in the county for 50 years. It offers degree programs online and on-campus. It was founded by three people. It was a creationist, priest, another, and the author of the book left behind.You talk about Christian -- San Diego Christian finances. Should you or other students be worried about the school's future.We sat down with the financial officer and he said no. It was just re-accredited by wasp for another eight years. But they brought up concerns about the school's financial sustainability. There are other things that show there might be issues like the school's financial score given by the U.S. Department of education and outside audits.You spoke with students. Were unable to determine with a $20 million went. He found signs that the school's financial situation is affecting students. What impacts did you find?One example I can give you is a professor Caitlin Brooks. She was a part-time professor in the communications department. She was promised she would be brought on full time. After a while, she realized it was not in the budget. That is what the students told us. They said over the past few years they noticed professors taking on heavy course loads. One student named Davey said his first year he had one professor for each subject. But now he has one teacher who teaches him three subjects.The school got a failing financial score from the Department of Education. Tell us about that.The U.S. Department of education, the number it gives out is for all private colleges in the U.S. It is an overall picture for schools. In 2014, San Diego Christian was giving -- given a [inaudible]. The agency found the school had irregularities in its reporting. At one point, it raised concerns about its budget. It was concerned about a sketchy multi-year budget.Students at San Diego Christian can no longer apply for federal grants.That is for this current year the 2017/18 school year. The grants, schools have to have a graduation rate of higher than 30%. They have to have a default rate that was lowering the loans of 50.5%. San Diego Christian did not get that.Where is the accountability on this. Is anyone looking over the shoulder of the financial picture of this college?The Board of Trustees is responsible. They referred us to their attorney who said the school had no comments.One of the takeaways is people thinking about attending a school especially a smaller college should check out a school's financial stability. How can they do that?We try to make that easier. We made a searchable base call data.Onion source.org. You can search every private college in the U.S. You can check financial score. There it explains their numbers. The financial score you see it tells them a little bit about the school's financials. With the U.S. Department of Education does is looks at schools outside audits. If they have no material weaknesses and no deficiencies, they will get a good score. That was the issue with San Diego Christian they got a .1 because the audit found 11 deficiencies. If you go ahead and look for another private school, you can tell whether they are handling financial aid correctly, if they are reporting all of their students correctly.-Speaking with Eye News Source Megan Ward, Megan, thank you.Thank you.
San Diego Christian College, a nearly 50-year-old nonprofit school in Santee, can’t account for more than $20 million in expenses that are supposed to be detailed on its public tax returns.
In the meantime, current and former students complain of inadequate facilities, former staff felt they were underpaid and a vendor claimed the school often fell behind on payments. Students who attend this religious-based college full time pay $30,000 a year in tuition.
The school’s chief financial officer, Steve Chaney, told inewsource in an interview he could not say what the $20 million – spent from fiscal 2012 to 2014 – paid for. He said records would be made available, but weeks later the school’s attorney said in an email that San Diego Christian College would not provide any documents.
“It's a symptom of a problem. Nobody’s paying attention,” Marcus Owens, a former top administrator with the Internal Revenue Service said after examining the school’s financial records at inewsource’s request.
The college president and the board of trustees, which is ultimately responsible for the school’s finances, either did not respond to requests for interviews or referred inewsource to the school’s attorney, Tracy Warren. She wrote in emails that officials had no comment and that inewsource should “cease and desist” efforts to reach the board.
Money problems at the school have mounted over the past few years. The U.S. Department of Education issued San Diego Christian College a failing financial score for fiscal 2014 based on findings from an outside audit.
In a 2016 report, a regional accrediting agency also highlighted irregularities found in the school’s financial record keeping and earlier raised concerns about its “very sketchy multi-year budget.”
Chaney attributed the failing financial score to money lost while moving the school to a new campus and dismissed concerns from the accrediting agency.
“They're supposed to come in and be concerned about everything,” he said, insisting students shouldn’t be worried. “This institution is on solid footings.”
Yet there are doubts about the school’s finances.
“It concerns me,” said David Oliveira, a senior and student-athlete. “I’m about to graduate and I’m worried about my degree.”
Since he enrolled in 2014, Oliveira said he has seen his scholarship drop from covering 90 percent of his tuition to 80 percent. Another problem is increasingly “overloaded professors,” Oliveira said.
The college’s graduation rate is also low — 30 percent in 2015, making the school ineligible to access state-funded Cal Grants.
Money woes follow school’s move
San Diego Christian College calls itself “one of the top” Christian colleges in Southern California.
The school was founded by three people — a creationist, a pastor and the author of the best-selling Left Behind series. San Diego Christian existed on church-owned land in El Cajon until 2014, when it moved to "establish its identity as an independent, faith-based liberal arts college.”
Documents from the school’s accrediting agency show the college lost $2.4 million in net assets that year because of unexpected relocation costs and poor record keeping. San Diego Christian College said in a 2015 report that those were “extraordinary issues” in an “isolated year.”
The new campus is five office buildings tucked behind a shopping center in Santee. Inside are classrooms, a library, a cafeteria, and a chapel where most full-time students are required to attend services every Monday and Wednesday morning or potentially pay a fine.
Are you a current or former teacher, faculty or vendor at San Diego Christian College? Contact the reporter on this story at meganwood@inewsource.org to share your experience.
Despite more than doubling the number of student-athletes at the college over six years, the school has no sports facilities of its own. Students use a nearby park, the Boys and Girls Club, and facilities at neighboring community colleges.
Last year, more than 700 students attended the college.
Kaitlin Brooks, a former assistant professor of communication at San Diego Christian, said academic rigor was “put on the backburner” at the college in favor of the religious experience — one of the reasons she said she left in 2016.
Brooks, a San Diego Christian graduate, recalled being told by a superior that her job was to “protect students from the outside world, which to me does not resonate with how I see my job as a college professor.”
More pressing, she said, was the low pay that pushed her and other professors away. There are no tenured professors at San Diego Christian – all are on one-year contracts, according to the U.S. Department of Education.
Brooks said she knows of more than a dozen other professors who left the school within the past year. “It seemed unusually high,” she said.
Depending on their positions, professors made about $40,000 to $67,000 in the 2015-16 school year.
Students said they’ve recently noticed professors taking on multiple subjects.
“I have a professor, she teaches me social media marketing and she teaches me entrepreneurship. And she teaches him another class,” said Oliveira, pointing to his teammate. He said it seemed like too much for one professor to teach three or more subjects a day.
“It makes it awkward for them and hard for them, and for us as well,” Oliveira said. “When you ask something it's, 'Oh, which class are you talking about?'”
Chaney, the CFO, said hiring more professors is not the school’s priority. Instead, the college is using software to expand, he said. The school has an online program that now offers bachelor's degrees in six subjects and master’s degrees in two subjects. Eleven degrees are offered to traditional on-campus students.
“We can serve almost 2,000 students with the current staff we have,” Chaney said.
This year, San Diego Christian College became one of two private colleges in California ineligible to receive Cal Grants because of its low graduation rate in 2015 and 15.7 percent default rate (the percentage of students who don’t repay their federal loans) in 2013. Cal Grants are financial aid that qualified students do not have to repay.
Last year, at least 114 San Diego Christian College students received this state grant, and 90 percent of the school’s students had some type of financial aid.
Missing documents for ‘other expenses’
Chaney, whose accounting company is based in Roseville, works as a full-time officer of the college for no pay, according to the school’s tax returns.
The college pays his company, Chaney and Associates, an undisclosed amount to handle its accounts payable, payroll, tax preparation and more. According to tax documents, only five of the school’s contractors are paid more than $100,000. Chaney and Associates is not one of them.
Chaney’s relationship as a school officer and the owner of a company that does business with the college is not disclosed in the school’s yearly IRS returns, although that is required.
“The college saved a ton of money by outsourcing to me,” Chaney said, adding that the school previously paid four times the amount his company charges for the same services.
Nonprofits making more than $50,000 a year are required to file public tax returns detailing yearly revenues and expenses.
During fiscal 2012, 2013 and 2014, undocumented “other expenses” and “fees for services” at San Diego Christian College amounted to more than $20 million. The IRS requires documentation that explains those costs. None was attached.
Chaney told inewsource he would need to “refresh” his memory about the documents missing from the 2012 and 2013 returns. As for the 2014 documentation, he said a “system glitch” prevented its upload to the IRS. He contacted the IRS about the return, he said, but the IRS told him “don't worry about amending it.”
When asked what documentation he had on this interaction – a tracking number, for example – Chaney said he hadn’t asked for any.
Owens, the former director of the IRS’s Exempt Organizations Division, questioned Chaney’s account.
“That's simply not what the IRS does in that sort of situation,” he said. “Normal procedure would be that the missing schedule would be solicited from the organization and associated with a return.”
The IRS declined to comment on the college's finances.
inewsource sent three years of the school’s audited financials and tax forms to Owens, who is now a partner at the law firm Loeb & Loeb in Washington, D.C.
“It looks like the organization is really suffering from a lack of personnel,” he said, confirming the expenses needed to be detailed.
Owens also addressed the fact that Chaney works more than 500 miles away from the college, out of his office in Roseville.
“If they had a chief financial officer on campus, 40 hours a week, I suspect they would not have the sort of gaps and problems they're facing,” Owens said. “Which are in the order of somebody doesn't have the time to pay close attention to what's going on.”
College’s finances put it in ‘fail’ zone
Two lawsuits were filed against the college by a food vendor and landlord in the past two years over missing payments. The total amount owed the two companies was more than $309,000, according to the lawsuits. Both cases were settled for undisclosed terms.
Chaney would not comment on the lawsuits, but said they were “minor.”
Taylor Maddox, a former co-owner of the school’s past food vendor, Philoxenia, catered the school’s cafeteria from 2014 to 2016. He said the college was perpetually $80,000 late in payments.
There were times when the company had to notify school staff that it could not serve food the next day without getting paid, Maddox said.
“Sometimes, the food quality would be lower and (students) would come to us and ask questions, because in their minds, they paid for their meal plan,” he said.
Another indication of financial trouble at San Diego Christian College is its annual federal financial responsibility score.
Colleges and universities that receive a score of 1.5 or higher from the U.S. Department of Education — based on a -1 to 3 scale — are considered financially responsible and and can receive federal financial aid without additional oversight.
Scores are based on a school’s cash reserves, net income and ability to borrow as reported in its audited financials.
In 2014, the college was given a score of 0.1 – which “pushed the College into the ‘fail’ zone”, according to its accrediting agency. That required the college to provide a $1.47 million letter of credit to secure federal student aid for the following year.
The college’s most recently released score was 1.1 in 2015. That’s considered financially responsible, according to the Education Department but requires cash monitoring. Records show the college was placed under this oversight from June 2016 to at least December 2016.
RELATED: Search financial responsibility scores of for-profit and nonprofit educational institutions
Chaney attributed the failing financial score to the school relocation and the distribution of too many college-funded scholarships.
The college’s financial aid department — managed by the vice president for student affairs — over-awarded student scholarships by $1.4 million in fiscal 2014, according to its latest reaccreditation report. That year, the school awarded $5.7 million in scholarships. The prior year, it awarded $4.3 million.
As a result, school officials hired new financial aid staff and shifted oversight of the department to Chaney. He said the fiscal 2016 financial score — which is not yet publicly available — will be reported at 1.6.
In 2019, the regional school accrediting agency will return to San Diego Christian College in a special visit to monitor what progress has been made since its reaccreditation in 2016.
School ‘has nothing to hide’ in audits
Before moving to its new campus, San Diego Christian College retained the same financial auditor for at least four years.
“Year after year, it was perfect, perfect, perfect,” Chaney said about the results of the audits. But for fiscal 2014 — the year it received its failing financial score — the college’s board hired a new “national” auditor to “scrutinize” the school’s finances, he said.
“That was our desire,” Chaney said. “We had nothing to hide.”
The audit found the school had two material weaknesses and nine significant deficiencies, noting federal aid recipients like San Diego Christian College are expected to have none.
A material weakness is a “deficiency, or a combination of deficiencies, in internal control over financial reporting.” A significant deficiency is a “deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness.”
The audit found a majority of the issues were due to the turnover in the college’s financial aid department and changes in administrative roles.
It also noted certain internal controls, such as payroll transactions and adjusting journal entries, were not reviewed. Several other deficiencies included students not receiving financial aid disbursements in the timeframe required by the Department of Education and not meeting federal reporting standards.
That audit was done by the Clifton Larson Allen accounting firm. It’s now done by Ken Mierzwinski, a certified public accountant who has done work for Chaney in the past.
Every audit since has found zero deficiencies.
