North Texas Daily

Catching up with UNT

Catching up with UNT

Catching up with UNT
August 08
14:58 2014

Joshua Knopp / Senior Staff Writer

Money Matters

Miscommunication about library funding caused a mass panic in November, but UNT’s financial troubles really came into relief Feb. 13, when Vice President for Finance and Administration Andrew Harris, Senior Vice President for Finance Jean Bush and UNT Dallas’ Vice President for Finance Carlos Hernandez all “resigned for personal reasons.” This was ten days after the new president, Neal Smatresk, started at UNT.

The next week, System Chancellor Lee Jackson said UNT had hired a consulting company, Deloitte & Touche, to perform an outside audit of the school’s finances. At this point, no one really knew anything about the problems except that they were being addressed and the people who were probably responsible weren’t with the school any longer.

On April 8, the system hired Janet Waldron as the new vice chancellor of finance to guide the school as it overhauled its accounting practices. Waldron had 30 years of financial experience in Maine, both under former Gov. Angus King and with the University of Maine.

On April 16, the school hired UNT alumnus Bob Brown to take Harris’ old spot. His former boss at Texas A&M, President Dan Jones, called him “one of the best CFOs in the state.” New financial leadership was solidly in place at this point.

Missing money

In a Board of Regents meeting the next day, Jackson revealed the first details about the financial crisis. According to Jackson, there was up to $23 million supposedly spread across UNT bank accounts that wasn’t there.

Auditors from UNT and Deloitte & Touche had both found an adjusting journal entry, made in August 2012, that supposedly had $23 million, but the money could not be collected. A complaint to the State Auditor’s Office that September said the entry had been made to hide un-reconciled transactions dating back to 2004.

Jackson said the overstatement was due to shoddy accounting, which included manually entering transactions that should have been automated and budgeting on the assumption that the school would hit 100 percent of its enrollment projections. The board had already been working on updating its accounting system, and they accelerated this process in light of this news.

In terms of immediate effect on the school, this was small. Smatresk said money in reserve wasn’t going to be used immediately regardless. It seems like a lot of money, but spread out over ten years for a school with a more than $500 million annual budget, the $23 million becomes much smaller. Smatresk said the school would aim to save money in the coming years to rebuild reserves, but not much would change outside of the financial department.

In May, he announced that all departments would be cutting their budgets by two to three percent.

Giving back state money

The next details of the school’s financial crisis came June 9, when Deloitte & Touche representatives said the school could have taken as much as $83.5 million inappropriately from the State of Texas in accounting errors going back ten years.

UNT had received money from the state for employee benefits and salaries that it shouldn’t have. Brown said the rule of thumb in Texas is employee benefits should be paid out of the same pocket that pays the employee’s salary, but UNT was receiving benefits for employees whose salaries the state wasn’t responsible for.

At the time, no one with the school or the state understood how this had been going on for ten years, and there was no deadline for when the state would want the money repaid. Smatresk said the state would probably want it back over a period of time, meaning this revelation would not affect the school’s budget dramatically.

UNT’s annual budget is currently about $520 million. The overstatement created by the adjusting journal entry and the money taken inappropriately from the state were both created over 10 years, meaning only about 2 percent of the school’s budget over this time period is in question.

In Smatresk’s last job as President for the University of Nevada at Las Vegas, he faced losing $74 million in state funding over four years following the 2008 economic crisis.

Was the school warned?

On July 5, Philip Young, a financial planner who had worked with UNT since the early 1990s, came forward with letters that indicate he had tried to warn the Board of Regents that the school’s retirement plan was unsound in 2009. Retirement benefits account for $9.8 million of the $83.5 million UNT took inappropriately from Texas, according to the Denton Record-Chronicle.

Young sent a letter to Gayle Strange, chairwoman of the board, in March 2009, and copied Jackson and others in the email. In the letter, he said that there was not enough oversight for the retirement plan and it could be abused.

Young’s reputation was in question after a disagreement three years earlier with the Financial Industry Regulatory Authority that saw him fired from his firm. Young said Strange responded to his concerns, but stepped down at the end of the spring. He also said Jackson used the transition to sweep his concerns under the rug. This is the first allegation that anyone still working at UNT had direct responsibility for the financial crisis.

Young and Harris would exchange heated letters later in August. Jackson eventually told Young they would handle any concerns internally.

The university’s only response was spokeswoman Kelly Reese’s official statement.

“Over the years, administrators at UNT and the UNT System have heard from Mr. Young on many varying issues, and have always asked for specific details so that we could respond appropriately and as necessary,” Reese said.

Jackson said he “remembered a great deal more” to the story, but refused to comment.

Keeping up with SGA

During elections last spring, new Student Government Association president Troy Elliott’s primary campaign promises were to form a “President’s council” of student organizations and to take care of internal business during the summer. To that end, SGA passed a constitutional referendum in June that could completely re-structure the organization.

The referendum creates a house of representatives from student organizations, which will serve as another branch of student government. The referendum will have to pass a student vote in the fall to go into effect.

Elliott said having organizations represented directly would increase SGA’s interaction with the campus.

“There are so few students who are heavily involved in SGA right now,” Elliott said. “But there are a lot of students who are involved in organizations. It’s not that they don’t care, it’s that they’re interesting in what they’re interested in.”

The house would be comprised of 40 seats. Student organizations are already divided into 10 categories, and each of these categories would have four representatives. The house would not have voting power, but would be able to sponsor legislation. It would gain voting power over a bill and act as a tiebreaker if the president or student senate vetoes the bill.

Elliott said the house would serve as an idea tank, bringing people who aren’t primarily involved with SGA into the governing process. Elliott said he has seen previous administrations struggle with members who are so focused on SGA that they can’t see the rest of the campus’ concerns.

“You begin to look at the internal structure of SGA and the goal becomes to fix SGA, but you forget the responsibility of SGA is external,” he said.

The referendum will go to a student vote in September.

Sexual Assault Awareness Task Force

In response to new requirements imposed by the updated Violence Against Women Act, Dean of Students Maureen McGuinness has formed a Sexual Assault Awareness Task Force for UNT.

Signed into law in 1994, the Violence Against Women Act was extended last April with some expansions for college campuses. This includes new requirements for reporting, student discipline and education about sexual violence.

UNT is meeting the education requirement with the new Haven program, a three- hour program on elements of healthy relationships, communication skills and reporting sexual assault. The program is mandatory for all incoming freshmen, transfer and graduate students. McGuinness said the task force is about more than that.

“We need to go above and beyond,” she said. “Nobody should be sitting at UNT knowing they don’t know where to go. We need to educate the community that this sort of behavior is not OK on this campus.”

Transforming the campus to be more conscious about sexual assault began last spring when signs about consent and stalking behavior began popping up on the grounds.

The task force is planning several events this year, including awareness events in October and April, more signs about consent and bystander trainings. It is also fostering a Twitter presence at @UNTconsent2prev.

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