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UNT finances could be better than expected

Profile image for By Jenna Duncan
By Jenna Duncan

DALLAS — The University of North Texas might not be in as big a financial hole as officials thought in April, financial consultants told a group of UNT System regents Tuesday.

A few months ago, it looked like UNT would need to shave $23.2 million from anticipated revenues in its 2013 and 2014 financial statements.

Now, Blake Rodgers, an audit senior manager with consulting firm Deloitte and Touche, estimates the number will be closer to $13.5 million.

This means UNT has less ground to make up in future budgets than it thought earlier this year.

UNT hired Deloitte and Touche in February to help straighten out its finances and financial practices after discovering accounting problems dating back to 2004.

Rodgers said the earlier revenue estimate was off by $10 million because there was little supporting documentation of the financial problems.

“We projected that [initial estimate] based on the facts that we knew at the beginning, with what little information we had,” Rodgers told the Financial Task Force.

The root of the problem goes back to 2012, when at the end of FY12, an employee estimated the amount of money the university was owed, but knew it could not collect.

That means the university billed $23.2 million as money it would receive — even though they knew it would never be received.

And that’s how the university overstated how much money it had available.

Deloitte is now nearing completion of its review of UNT’s 2013 finances.

The largest overstatement of losses was found in the area of student accounts receivable — basically outstanding money that students owe the university.

Every year, UNT puts an “allowance” into the budget for money it probably won’t get back from students.

Rodgers’ team found that in 2013, someone looked at the accounts and thought the $8.9 million allowance wasn’t enough, and increased it by $7.25 million.

“Someone actually took that hit in the financial statements in 2013 already, so what would have been an $11 million adjustment is now approximately $4 million,” Rodgers said.

There have been several other adjustments along the way in this process called account reconciliation, Rodgers said.

At this point, 600 accounts have been analyzed and are now being double-checked, leaving 100 accounts to finish by the end of the month.

After that, the team will begin dealing with FY 2014.

Financial adjustments for 2014 and other aspects of the financial overhaul are scheduled to take through the end of the calendar year.

None of this takes into account the misuse of state funds over the past 10 years though, the other large financial problem facing the university and system.

The State Auditor’s Office launched an investigation in February to look at the misuse of state funding over 10 years at UNT.

An analysis completed by Deloitte in May found the university took $83.5 million of state funds for salaries and benefits it shouldn’t have.

Those funds should have come from other UNT funds.

The investigation is still underway, so officials are unsure if, when or how much the school might have to repay the state.