College of New Rochelle Owes $20M in Payroll Taxes

NEW ROCHELLE, NY — Preliminary inquiries into the financial stability of the College of New Rochelle found that about $20 million in payroll taxes were not paid for eight quarters, beginning in 2014.

A report posted on the college’s website said that information resulted in an immediate investigation by a Special Committee of Trustees.

Not only was a chief restructuring officer engaged to manage the college’s finances, but a forensic accounting firm was hired to review the school’s financial records and practices.

The board of trustees said the review is still in progress, “but preliminary findings indicate that there is a path forward for the college to remain a stand-alone institution. It will require significant cost-cutting and a a significant amount of outside funding; however, it is the primary goal of the board.”

President Judith Huntington stepped down in October when the financial crisis was discovered.

Provost and Senior Vice President for Academic Affairs Dorothy Escribano was named interim president.

Kevin Cavanagh, the college’s vice president of enrollment management, was appointed to serve as executive vice president of strategy and planning.

So far, it’s been determined, the college said, that the controller failed to file the required tax returns and pay the taxes owed.

The board also indicated that senior management did not provide accurate information to the board about the college’s finances.

An independent external auditing firm looked at the college’s financial statements for recent years and found no material issues.

Other significant debts, liabilities and depletion of assets including the unrestricted endowment have been found. The additional debts and liabilities total $11.2 million.

The board said the matter is urgent, given that the tax liability was undisclosed for so long, and the college will require a significant amount of outside funding to meet its immediate needs.

“The very last resort is closing the college and placing students in other schools,” the statement from the board said.

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