UNT looks into revenue shortages

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New full-time students starting at the University of North Texas this fall will now have two set fixed-rate tuition options, with one option giving students a $4,000 bonus if they graduate in four years.

The University of North Texas System has hired outside auditors to review financial records systemwide after budgetary inaccuracies at UNT caused ongoing revenue shortages, Chancellor Lee Jackson said Wednesday.

The revelations of shortfalls come on the heels of a sweeping shake-up in leadership within the finance division at UNT a week ago that included the resignations of three top finance officials.

Jackson said UNT President Neal Smatresk, who started work on Feb. 3, is “responding aggressively to correct the current year budget issues at UNT.”

“The first step is to fully understand the nature of the revenue shortages and then to be very direct and open in implementing a corrective action plan on campus,” Jackson said in a written statement.

“I hope these statements are helpful and demonstrate the seriousness with which our entire System is addressing these financial issues,” he concluded.

The two UNT officials who submitted their resignations last Thursday were Andrew Harris, vice president for finance and administration, and Jean Bush, senior vice president for finance. Also submitting a resignation the same day was Carlos Hernandez, a chief financial officer and vice president for finance at UNT Dallas. Hernandez previously served as controller and associate vice president for UNT and controller for the UNT System.

Jackson said in the statement that the university would not comment on personnel issues. The UNT System Board of Regents is set to meet today in Dallas, however, and among the items set to be discussed in a closed-door session is “consideration of individual personnel matters related to ongoing audits and investigations.”

Jackson said the problems were caused by UNT’s failure to accurately project the amount of state funding it receives for benefits for its employees. He said UNT has notified the State Auditor’s Office in Austin and would seek the agency’s guidance in documenting the shared benefits expenses in prior years.

“This has caused budget problems for the University in the past which are now continuing into fiscal 2014,” Jackson said in the statement. “We are responding aggressively to understand this issue, report it to the proper agencies and take all appropriate corrective action.”

He said the system is also “responding aggressively to upgrade our financial controls, records and leadership,” including initiating a multi-million-dollar upgrade of the PeopleSoft financial tools. He noted the system has also created a “consolidated controller” position to oversee the accounting operations.

Jackson did not specify how large the revenue shortages could be, but a review of internal records by the Denton Record-Chronicle found the impact just to the university’s library system could be several million dollars in the past few years.

The problems first emerged publicly when UNT budget officials notified library officials that the libraries would have to absorb an additional $1.7 million in annual costs for staff benefits.

The anticipated budget cuts prompted a “Save the Library” campaign to avoid cuts to the libraries, which are funded by student fees.

According to a series of internal UNT e-mails obtained by the Record-Chronicle under Texas open records laws, UNT used state funds to pay benefits for employees whose wages are not paid by state dollars — something that is not allowed by the state.

One e-mail, sent from Bush to Library Dean Martin Halbert on Nov. 13, said that the “funding/budget issue” went beyond the library.

“Note that the library is ‘not alone,’” Bush said in the e-mail. “The impact will be felt by other fee-based and service department operations on our campus.”

Smatresk, too, hinted at fiscal unrest at the university in a Feb. 9 interview with the Record-Chronicle in an article on the funding problems at the libraries.

“I’m going to be devoting significant amounts of time digging into the budget over the next two weeks as we prepare for the legislative session,” he said at the time.

Other departments have already switched or were going to switch the funds used to pay staff benefits, Provost Warren Burggren said in November when the issue first surfaced. Departments mentioned by Burggren at the time included housing and dining services, which are self-sustaining.

The three finance officials who resigned had previously worked together at UNT.

Harris started as vice president for finance and administration on Nov. 5, 2007, and oversaw the Division of Finance and Administration during his entire tenure with the university. Previously, he had worked with the University of Chicago and Boston University.

Bush had worked within budgeting in her 31-year tenure with the university. She started as an accounting clerk and held positions including budget manager, budget director and assistant vice president for business affairs and chief budget officer.

Hernandez had been UNT controller since 2011 before taking the position at UNT Dallas in April 2013. Previously, he served as associate vice president for business affairs and comptroller at the University of Texas at El Paso.

JENNA DUNCAN can be reached at 940-566-6889 and via Twitter at @JennaFDuncan.


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