UNT eyes budget cuts

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University of North Texas President Neal Smatresk is proposing administrative budget cuts of 3 percent or more and academic cuts of 2 percent as officials work to offset budget shortfalls caused by a series of financial missteps.

Smatresk told the Faculty Senate on Wednesday that the academic cuts largely will be decided by the provost and deans and will not be made across the board. He said the administrative cuts could go deeper than 3 percent.

“We’ve been a family that puts a lot on the charge card and pulls money out of the bank, and now we’re in a situation where we tighten the belt a little bit and save once again to get the reserves back up,” Smatresk said.

The cuts will be included in Smatresk’s proposed budget for the upcoming fiscal year, which will be presented to the Board of Regents in June.

Smatresk, who started work in February, told the Faculty Senate that UNT has a history of financial mismanagement that began about 10 years ago. Officials have called in outside auditors, and the State Auditor’s Office also is investigating.

Officials have said that the university overstated its finances by $23 million and additionally misappropriated millions of state dollars for employee benefits. State officials have not yet determined whether UNT will be required to repay the funds.

The total operating budget for the university is $520 million. Although revenues have been steady, enrollment has been flat in recent years, causing the university to dip into reserves to cover some of its costs.

Shortly after speaking to the Faculty Senate, Smatresk sent an email to the faculty and staff outlining the proposed cuts.

“After spending the first months as UNT’s president getting my arms around our financial challenges, I can share my belief that the obstacles we face are significant but surmountable,” he said in the email. “But we must take steps to put our university on solid financial ground going forward and to build a budget that will sustain us for the future.”

The proposed cuts are the first fallout from the recent financial woes, which have been trickling out since February. In addition to the misuse of state funds, officials have reported that a journal entry in 2012 led to a misstatement of the university’s financial standing by $23 million.

The full impact of the financial problems won’t be known until October, said Bob Brown, UNT’s new chief financial officer.

Brown, who joined UNT this month, said he is working to make the revenue and expenditure reporting more conservative, figure out the true financial standing of UNT, create better controls to prevent those types of issues and update the processes used for budgeting and reporting.

The regents will meet today and consider adding $350,000 to pay for auditing firm Deloitte & Touche’s investigation into the problems.

Brown said updated controls and processes are on the way.

“Our budget is done today roughly the same way it was done about a decade ago,” Brown said. “What happens is they rely on individuals who can get into our budget, put it on spreadsheets and explain it to us, and that’s not a healthy place to be.”

Smatresk said the new budget will include provisions for repaying $5 million into the university’s reserves.

Smatresk was hired as president after serving as president of the University of Nevada at Las Vegas, which faced sharp cutbacks in state funding while he was there.

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


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