The University of North Texas System will spend at least $1.35 million to get its financial house in order after a series of problems, regents decided Thursday.
Regents voted to spend $350,000 so a consulting firm can finish its work in tracking down all of UNT’s financial problems that have started to come to light this year. Regents approved at least another $1 million so the firm, Deloitte & Touche, can help fix those problems.
It’s part of an effort that system leaders call their “financial transformation.”
“The process is time-consuming and expensive, requiring more than $1 million of professional consulting fees to assist our staff in reconstructing past records and improving our processes for the future,” system Chancellor Lee Jackson wrote in a report for regents Thursday.
Last month an investigation found that UNT used an accounting trick that overstated its revenue by $23 million. The total budget is about $520 million. UNT also may have to repay the state because it spent millions of state dollars on employee benefits it shouldn’t have.
System officials and consultants have found many cases in which UNT failed to follow basic accounting standards. For instance:
When employees leave UNT, the payroll system doesn’t promptly show that. As a result, former employees potentially could still get paid.
UNT charge cards aren’t automatically canceled when employees leave. Those former employees could run up charges.
The system needs to make sure employees don’t approve their own financial transactions.
Financial reporting staff members get “little to no ongoing training” in accounting methods and other areas.
The true financial picture at UNT probably won’t be clear until the fall, university officials say. They’re still reviewing records, and to date they’ve found another $5.8 million in reporting errors.
UNT President Neal Smatresk on Wednesday announced budget cuts for the coming fiscal year — 2 percent for academic departments and at least 3 percent for administration. He told the Faculty Senate that the financial problems go back about 10 years.
Smatresk inherited UNT’s financial troubles in February when he succeeded V. Lane Rawlins.
The system’s longtime chancellor, Jackson, said Thursday that the system and regents were not at fault for UNT’s financial errors.
“The financial reporting office at UNT was for many years a very stable operation,” Jackson said. Finance employees followed state requirements and turned their reports in on time, with no identified problems.
Jackson said that to his knowledge the system’s yearly financial reports — which include UNT’s — have never had a full independent audit. It’s not required; the State Auditor’s Office reviews only parts of university financial reports and historically has found the UNT System in compliance.
Regents pushed in 2012 for an outside audit after a consultant suggested ways to make the system more efficient and modern.
Regents postponed the audit last year. They decided the system needed more time and voted to spend $1 million for a consultant to help prepare for it.
Also Thursday, regents approved borrowing $120 million for renovating and expanding the University Union and building an honors dorm named for Rawlins.