A Pattern of Failed Nonprofit Oversight: A Third Case Study 

A Pattern of Failed Nonprofit Oversight: A Third Case Study 

Part III of III: Morris Brown College and the Cost of a Board That Wasn’t Watching 

I recently wrote about two institutions undone by the same failure(opens in new tab) — a governing body that let one person operate with too little oversight, until the damage was catastrophic. I looked at the Lemington Home for the Aged, whose board of directors was found personally liable for failing to exercise even basic diligence as the nursing home collapsed, and the ongoing litigation over the AME Church’s retirement fund, where clergy allege church leadership let one man control a fund worth hundreds of millions of dollars, essentially unsupervised, for two decades. 

I said at the time that this wasn’t a story about any one denomination or any one institution. It’s a pattern. Morris Brown College, the historically Black college in Atlanta founded by the AME Church in 1881, is a third example of it — and it’s worth its own telling, because it complicates the pattern in a useful way. 

The Crisis People Remember Wasn’t the First One 

Morris Brown nearly went under twice, but most people only know about one. The first was in the early 1990s. By 1992, the college was facing a $6.5–$7 million shortfall and had been placed on probation by its accrediting body for poor accounting practices. That crisis was actually resolved. Then-president Dr. Samuel Jolley Jr. spent the mid-90s turning the finances around, and by 1996 the debt was gone, the college had a $2 million surplus, and enrollment hit a record high. This is not the story most people know about because it has a happy ending. 

The Morris Brown story most people know started in 1998, when Dr. Dolores Cross became the college’s first female president. And even that story starts with a warning nobody acted on. Within her first year, the college was hit with an $8 million federal audit disallowance that put it on manual reimbursement status with the Department of Education — a serious red flag, delivered almost immediately upon the beginning of Dr. Cross’ tenure.  

Manual reimbursement is a restrictive status the Department of Education can place a school under when it has concerns about how the school is managing federal financial aid funds. Instead of receiving aid money upfront to disburse to students, the school must first pay out its own funds to cover student costs, then submit documentation to the Department requesting reimbursement. It’s a red flag: schools are typically placed on manual reimbursement because of prior findings of financial mismanagement, inadequate internal controls, or accounting problems. What if the school can’t cover the costs up front?

In late 2000 and early 2001, a second federal investigation found the college couldn’t account for over $463,000 in previously received funds, and it was placed on reimbursement-only status again. That’s two independent, documented warnings from a federal agency, roughly a year apart. The trustees should’ve heard these shots across the bow. Because they didn’t, Morris Brown eventually lost it’s accreditation (and my 96 year old great aunt, c/o 1949, went into mourning). 

By 2001, Morris Brown had become dependent on $15–25 million a year in federal financial aid — the majority of its total revenue — while carrying operational debt that had climbed past $23 million. The board watched an institution become financially dependent on a single funding stream and it took no action in response to two separate federal audit flags. 

What Actually Happened 

Dr. Cross and Parvesh Singh, the Director of Financial Aid and Dean of Enrollment Management, began a scheme of “blanket enrollment” — reporting students as enrolled who had withdrawn, never attended, or were only part-time, in order to keep drawing down federal financial aid the college wasn’t entitled to. Between 1999 and 2002, they fraudulently obtained $3.4 million in federal loans and Pell grants this way. The money went toward payroll and the college’s mounting debt — not, according to the final record both prosecutors and defense attorneys agreed on at sentencing, into either of their own pockets. It’s worth noting the original 34-count indictment against Cross had alleged some funds covered personal trips for her and her family; that particular claim didn’t survive into the final, agreed-upon account at sentencing, but it’s part of the record and worth holding alongside the tidier “nobody personally benefited” version that emerged later. 

The Department of Education caught it in 2002. The college’s accreditation was revoked in December of that year, cutting off the federal aid that 90 percent of its students depended on. Enrollment collapsed from roughly 2,500 students to under 50. Cross and Singh were indicted in 2004, pleaded guilty in 2006, and were sentenced in 2007 — both to five years of probation, with home confinement (Cross for a year, Singh for eighteen months) and modest restitution. Prosecutors had actually recommended prison time for Cross; the judge chose probation instead, citing the defendants’ circumstances and the fact that neither had personally profited.  

Morris Brown didn’t regain full accreditation until 2022 — twenty years later. It survived, but barely, spending years with fewer than 70 students on a campus built for thousands. 

Why This Belongs Next to Lemington, Not Just Next to AME 

Here’s what makes Morris Brown a different kind of case study than the AME retirement fund situation, and why I think it’s actually closer to Lemington.  The AME retirement fund allegations involve personal enrichment — alleged self-dealing. Morris Brown doesn’t have that. What it has, in the final record, is fraud committed in a desperate, illegal attempt to keep an institution’s lights on, layered on top of a board that had failed to act despite two federal warnings.  

That’s Lemington’s failure, essentially, with an additional layer. Lemington’s board didn’t do anything wrong themselves — they just weren’t paying attention while their CEO ran the nursing home into the ground. They missed meetings, left a required finance committee unstaffed, and ignoring warning signs. Morris Brown’s board had that same inattention, plus criminal fraud committed by the leaders they weren’t supervising. Same root failure.

The Common Thread 

Three cases now: a nursing home, a church retirement fund, and a college. Different sectors, different decades, different specific failures. But in every one of them, the people whose entire job was to watch closely didn’t, and an institution that mattered enormously to the community was left holding the bag.