Report: UNT drew excess state funds

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According to a financial document, the University of North Texas improperly used $83.5 million in state funds for employee benefits and salaries, pushing its financial problems to more than $100 million.

$83.5M used improperly to pay benefits and salaries, firm finds

The University of North Texas improperly used $83.5 million in state funds for employee benefits and salaries, pushing its financial problems to more than $100 million, according to financial documents.

UNT System Chancellor Lee Jackson said Thursday that the state and UNT officials have not yet determined how much the university might have to repay to the state and over what period of time. He said he spent Wednesday in Austin meeting with staff for the governor, lieutenant governor, House speaker and others about the $83.5 million, which was disclosed Wednesday in federal financial filings.

“I believe the state of Texas will want to work out a settlement with the University of North Texas that doesn’t damage its educational mission and that is considered fair,” he said.

UNT’s annual budget is about $520 million. University officials are recommending cuts of 2 percent in academics and 3 percent in administration costs to try to make up for the budget woes.

On Thursday, UNT System officials released a copy of an investigation done with Deloitte & Touche, a consulting firm. The upshot: Between September 2003 and April 2014, UNT drew $83.5 million in state benefits and salaries it wasn’t entitled to.

Key questions remain unanswered. Will UNT have to pay it all back? Did UNT finance employees obtain extra state money by mistake or on purpose? And how did the problem go unnoticed by the state and university for so long?

Jackson said Thursday that UNT will work out repayment details with state officials. He said further investigation will attempt to explain just how the problem occurred, and who was responsible.

“Evidence does not yet reveal any inappropriate financial gain,” Jackson said.

In April, an investigation found that UNT had overstated its revenues by $23 million since 2012. The university is still looking for any other misreporting that could add to the total.

This month UNT President Neal Smatresk said he would seek the cuts in his budget proposal to regents. In a letter to faculty and staff Thursday, he wrote, “With our new budget process in place, and strong revenues, I don’t anticipate we will need further budget cuts.”

Smatresk joined the university in February, after the financial problems started coming to light. Three top finance officials resigned that month. In March, the State Auditor’s Office said it had launched an investigation into UNT’s financial irregularities. The investigation is ongoing.

In addition, the UNT System hired auditors who have found dozens of problems with basic accounting practices.

The report by Deloitte & Touche found that in 2004 — the first fiscal year it examined — UNT collected $3.8 million in excess state funds for employee benefits. The overfunding peaked in 2010 and 2011, when the university collected more than $15 million in excess each year.

JENNA DUNCAN can be reached at 940-566-6889.

HOLLY HACKER can be reached at 214-977-8749.


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