The law in PA says otherwise. There is a duty to report these types of incidents to the police or child protective services.
The school can tell people all they want “don’t call the police,” but that doesn’t make their policy legal and it doesn’t insulate the person from charges that they broke the law.
Our daughter was working for a MO state college or university. I do not know what the law here in MO says.
Regarding the witnessing of a criminal act - IF there is a demonstratable policy at the university that states or suggests that those connected with the university contact non-police university employees instead of the university police department (at most PUBLIC universities today the officers are sworn, state or local, police officers) or the local or state police, then I would think the harmed would have a potential lawsuit because of that policy.
That being said why have they not arrested Paterno yet?