A former senior director of student financial services at Point Park University alleges in a federal lawsuit that she was terminated after alerting superiors to fraud in the school's disbursement of federal student aid.

Betty L. Davis' termination and retaliation complaint cites the state's whistle-blower law and the False Claims Act and was filed Tuesday in U.S. District Court for the Western District of Pennsylvania.

Named as defendants were Point Park and two current and former administrators, Sandra Cronin, former director of financial aid, and Bridget Mancosh, the university's senior vice president of finance and operations.

According to the suit, Ms. Davis held her position from Nov. 10, 2008, through July 2 of this year, and as a result, gained intimate knowledge of university financial services, including what the suit alleges was "illegal distribution of federal funds."

The lawsuit claims that the defendants "defrauded" the federal government "by putting forth a false and fraudulent claim for payment and/or approval of federal funds."

Specifically, the suit alleges that a formula created by Ms. Cronin and approved by all the defendants "systematically excludes commuter and part-time students from receiving any Federal Supplemental Educational Opportunity Grant (FSEOG) funds."

It further asserts those exclusions demonstrated favoritism to certain students and "recklessly and blatantly disregards the regulations of the Department of Education," which established means for distributing the aid.

The suit says Ms. Cronin submitted reports under other counselors' names and "chose to conceal the exclusions from any and all auditors."

Ms. Davis asserts in the lawsuit that when she discovered and/or witnessed the manipulated materials, she reported it up the chain of command to Ms. Mancosh. The complaint alleges she told the plaintiff to "keep this quiet" and praised her actions.

The suit alleges that no corrective action was taken and that soon thereafter, Ms. Cronin filed a complaint against Ms. Davis to Ms. Mancosh. The suit says that during a meeting between the plaintiff, Ms. Mancosh and a human resources representative it was agreed the allegations against Ms. Davis were unfounded.

However, she was terminated at that meeting, the suit alleges.

The suit says Ms. Davis learned that her termination was ostensibly due to restructuring and that her position was being eliminated. The termination occurred days before a scheduled federal audit, the complaint states.

The suit says Ms. Davis would have been obliged to reveal to auditors her findings of impropriety and alleged that the university terminated her "rather than risk Davis' disclosure of the illegal goings-on" at Point Park.

The suit asks the court for relief including, but not limited to, back pay, damages, costs and fees related to what the suit contends was a wrongful discharge and other relief as deemed appropriate.

In a statement Thursday, Point Park called the allegations erroneous and said "providing appropriate financial aid to eligible students is a matter of paramount importance" to the university.

"We have been advised of a lawsuit filed by an employee whose position was eliminated as a result of a reorganization in the finance and operations area of the university," it read. "The lawsuit makes erroneous allegations about the distribution of financial aid at Point Park."

Noting that the financial aid division is audited annually, the statement said, "Point Park has been determined to be in compliance with all federal regulations."

Ms. Solomon said Point Park is unfamiliar with the independent audit the lawsuit asserts Ms. Davis asked for, and that the federal audit was routine and conducted by external auditors for Point Park.

Ms. Mancosh could not be reached. Ms Cronin, who as of July 1 became senior associate director for financial aid, declined comment.

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