The alumni group blasts the school's leaders for increasing the amount paid to top executives by 47 percent in one year and for spending more than $1 million on legal fees for "frivolous" lawsuits against critics.
The alumni group, which has 93 members, also says that the school has filed incomplete nonprofit tax forms with the IRS.
The trustees "are failing to exert the oversight that is required of them as fiduciaries of the school and the foundation," said Art Houston, a 1970 alum and Old Guard official.
John Miller, a school spokesman, called the allegations "unconscionable" and "irresponsible."
"They are slanderous to the school; slanderous to the head of the school," said Miller. "And rest assured, Valley Forge will soon file a lawsuit against these individuals."
Miller added: "This little band of guys is clearly intent on destroying the school. They would rather burn it down than not get their way."
Under state law, the attorney general is responsible for ensuring that assets of charitable trusts and nonprofit organizations are safeguarded.
Nils Frederiksen, a spokesman for Corbett, said the office reviews all complaints. He declined to comment because the attorney general had not yet received the Old Guard letter.
Last week, Valley Forge announced an ambitious plan to build a $32 million academic facility so the junior college could more than double its enrollment in 2014.
Old Guard officers labeled the announcement a diversionary tactic.
"I would refer to it as 'spin,' to take eyes away from the real questions the alumni are asking," said Alastair G. Crosbie, a 1990 graduate and a board member of the Old Guard.
The call for the state investigation is the latest salvo in a three-year dispute between some alumni and the administration over the management and future direction of Valley Forge.
