This story was produced by the Berks County bureau of Spotlight PA, an independent, nonpartisan newsroom. Sign up for Good Day, Berks, a daily dose of essential local stories at spotlightpa.org/newsletters/gooddayberks.
READING — In July 2025, Albright College announced it had ended its most recent fiscal year with a $10 million surplus, part of what officials called a “remarkable financial turnaround.”
But a newly released audit found that the projection was overly optimistic and once again demonstrates the precarious position the school’s finances are in.
The college’s surplus was actually $4.6 million for the fiscal year that ended May 31, 2025, according to the audit — less than half of what officials projected and only due to one-time revenue streams.
Despite that increase in net assets, the college’s long-term financial health remains strained, the audit shows. Albright ended that fiscal year with a $13.6 million operating deficit, meaning it still isn’t bringing in enough money through tuition and other sources to cover what it costs to run the school.
The Berks County college has run a deep deficit since 2018, and experts say it needs to be handled quickly.
“Their entire future hinges upon whether they are able to close the budget deficit in fiscal year 2026,” said University of Tennessee, Knoxville professor Robert Kelchen, an expert in higher education finance, accountability policies, and practices. Kelchen reviewed Albright College’s audit at the request of Spotlight PA.
The audit, completed by the firm BDO in February, also flagged a material weakness in the review due to turnover in financial positions like the controller — a role that is once again vacant. A material weakness is a serious, systemic failure in an organization’s internal financial controls, which can lead to errors in financial statements.
Albright’s struggles are not unique. It is one of several small colleges or universities in Pennsylvania grappling with major challenges due to declining enrollment, an issue facing higher education nationwide.
After reviewing the college’s audit for Spotlight PA, Brian Mittendorf, an accounting professor at Ohio State University’s Fisher College of Business, said the fact that Albright had a surplus is encouraging. The liberal arts college’s surplus was primarily made possible by one-time revenues like selling property or getting repaid for a Paycheck Protection Program loan.
But the full details weren’t as promising. “Their operating activities still look quite concerning,” Mittendorf said. “They did manage to cut back on some of their operating costs and increase their operating revenue. So both of those things seem positive, but again, they’re digging a deeper hole. It’s just at a lower pace [than] they were digging it before.”
College officials declined to discuss the audit with Spotlight PA. Albright spokesperson Will Martinko acknowledged the audit’s material weakness finding, saying it is “attributable in part to repeat findings from prior years.
“Our focus over the past year has been on turnaround activities, and we are proud of the significant progress the college has made. As discussed directly with our auditors, our goal this year is to continue working through findings that predate [fiscal year 2025],” he said in an emailed response to Spotlight PA questions. “We remain committed to full resolution and will continue to prioritize this work.”
‘Not enough’
Over the past two years, Albright College has cut positions, canceled some academic majors, and sold property and art to close a multimillion-dollar deficit.
In late 2024, it sought permission to borrow up to $25 million from its endowment fund to avoid closure. The college has since earmarked $15 million of those funds to renovate and expand the library and address key capital improvements and deferred maintenance of campus facilities.
Administrators reduced the deficit by about $9.5 million between the 2024 and 2025 fiscal years, primarily with cuts to instruction, student services, and administration costs, the college’s audited financial statements show. But they increased “auxiliary enterprise” spending — described in the audit as residential and dining services — by more than $6 million.
The college did not answer Spotlight PA questions about these maneuvers, but insisted it is making “meaningful progress.”
“Albright is confident in its direction and energized by what lies ahead: an institution defined by enrollment growth, student success, expanded philanthropy, and a clear vision for long-term impact,” Martinko said. He provided no further details.
Albright officials previously said the fall 2025 class was larger than anticipated, with 455 full-time undergraduate students. Interim Chief Financial Officer Larry Bomback said last year that the college also received nearly $4 million in unrestricted donations between January and July, a nod to Albright’s expanded philanthropy.
Bomback, a contracted employee at Albright now serving as vice president of strategic initiatives, did not return calls or emails seeking comment.
Experts say that while the college has reduced its operating deficit, it’s not enough.
“They continue to face financial challenges, and they’ve responded to some of them, but not enough that it would get them out of the hole that they’re in,” Mittendorf told Spotlight PA.
Albright’s use of its endowment fund is a “sure sign” the college isn’t making enough money to sustain all costs, he added.
The latest deficit figures show a larger shortfall than in 2022, when Albright finished the fiscal year $12.8 million in the hole.
“The long-term sustainability is a big question because it appears they have exhausted much of their financial runway,” Kelchen said. “If they continue on a path of losing $10, $15, $20 million a year, they are not going to be in operation much longer.”
Administration responds to audit
Albright administrators in the audit acknowledged the operating deficits and attributed them to “structural pressures” driven by declining enrollment, the college’s fixed cost base, and debt and lease-related obligations. They expect the college could see “positive cash flows from operations” by May 31, 2027, “if not sooner.”
Administrators promised to shore up staffing to address the material weakness found by auditors. The continued lack of internal controls over Albright’s finances has been fueled by turnover in the finance office and the lack of a controller, auditors said.
School administrators expected to have a controller and a full business office in place by the end of May of this year, according to officials’ responses in the audit. But the controller listed in the audit left their position sometime in March.
The role hasn’t been filled, Martinko said in an emailed response on May 19, declining to discuss the college’s staffing challenges or the costs associated with them. He said the vacancy has been reposted.
Later, Martinko was laid off on May 28 due to “restructuring” at the college, according to his LinkedIn post.
The communications staffer was among about a dozen people laid off recently as the college focuses on a “more integrated and coordinated approach across departments,” said James Gaddy, executive vice president at Albright, in a June 3 email confirming the restructuring and layoffs.
(Read Gaddy’s entire statement)
Auditors also criticized Albright for failing to have formal policies and procedures for retaining and tracking documents and agreements; lacking internal controls to track investments and endowments; and noncompliant handling of the college’s student aid funds and other federal assistance.
The college was additionally flagged for untimely and improper reporting of changes in student enrollment, a repeat finding from prior audits.
Albright officials expected to correct all the issues found in the 2025 audit and implement better internal controls and practices by the end of May. They did not answer direct questions about this process, nor about how they are responding.
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