Audit details improper fund transfers, growing debt, and ethical questions over the use of student fees
SAN BERNARDINO, CA – A damning internal audit has exposed a years-long financial crisis within Cal State San Bernardino’s student housing department. It revealed millions in losses that are ultimately backstopped by the university’s operating budget, and that, in a controversial move, involved a multi-million dollar loan from a student union fund, The Coyote Chronicle has learned.
The crisis, detailed in a California State University system audit released August 6, 2025, centers on the Department of Housing and Residential Education (DHRE). The audit’s findings, combined with internal faculty concerns and interviews with university officials, paint a picture of a housing program struggling with debt, transparency, and questionable financial decisions that may have diverted funds intended for use for students, faculty, and staff.
According to the audit, CSUSB’s DHRE has operated at a deficit since about 2018, driven by declining occupancy, high debt service from the 2018 construction of Coyote Village, and the decommissioning of Serrano Village (the university’s only paid-off residence hall). By 2025, the audit found that $18.5 million in housing debt had been transferred to the university’s state operating fund (the same fund that pays faculty and staff salaries) and that an additional $8.4 million had been borrowed from auxiliary and university accounts to keep the housing department solvent.
Among those loans was a controversial $3 million transfer from the Santos Manuel Student Union Operations Fund, financed through mandatory student fees. The loan was approved during a lightly attended summer executive committee meeting in July 2024, which had only four board members voting.
“That fund comes from student fees,” said Dr. Montgomery “Monty” Van Wart, CSUSB’s 2022–23 Outstanding Professor and faculty senator. “That’s not good. I think that’s unethical.”
Van Wart, a professor of public administration, told the Coyote Chronicle that the housing deficit was already evident in 2020, when DHRE was $3 million in arrears and the pandemic forced residence halls to close.
“When COVID hit, they cleared out the dorms and refunded students. Any responsible financial manager would have developed a plan,” Van Wart said. “Instead, they rolled the debt over and hoped good times were coming.”
He said the administration later absorbed $18.5 million in losses into the state operating fund, followed by new internal loans totaling $8 million.
“It’s like maxing out credit cards to pay the minimum balance on others,” he said. “Every time you take another loan, you push the problem down the road.”
The most controversial revelation involves the $3 million loan from the student union board. Van Wart said the University’s Vice President for Finance “persuaded” the board to approve the loan during a summer meeting, minimizing oversight and urgency.
“Our departments have lost staff and faculty because of this,” Van Wart said. “That $18.5 million transfer came from the same operating fund that pays for instruction and salaries.”
Students have also felt the effects, facing larger class sizes, fewer course offerings, and increased fees. The international student population (once over 1,400) has dropped to just 82 this year, further reducing housing occupancy and revenue. “The ethical question is simple: should student money be used to bail out a mismanaged housing operation?” he added.
In a campuswide memo, Dr. Thomas Corrigan, Vice President of the CSUSB chapter of the California Faculty Association, also linked these financial decisions to recent campus cuts. “The transfers from the university, its auxiliaries, and students come as CSUSB has aggressively cut funding for instruction, leading to larger class sizes, widespread course cancellations, and loss of work for many lecturers,” he wrote.
As of publication, CSUSB administrators have not issued a public statement addressing the audit’s findings. The official report includes a management response agreeing with the recommendations and setting a December 2025 deadline for corrective actions.
The Coyote Chronicle reached out to the administrators for comment but received no response.
Editor’s Note: The Coyote Chronicle will continue to follow developments in the DHRE audit, including administrative responses, student union board actions, and any subsequent CSU investigations.
