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13 financial problems identified in '08 audit

Published: Sunday, March 16, 2008

Updated: Sunday, February 15, 2009 16:02

UCF mishandled several million dollars in funds and is spending more money than it should, according to a recent state audit.

At a time when state budget cuts to education have caused reductions in classes, caps on enrollment and stalls on faculty raises, the findings for the fiscal year ending June 30, revealed 13 instances of university funds being used improperly.

Several findings involved the university assessing fees and transferring funds without having legal authority for its actions. According to the audit, the university loaned $7.4 million to the UCF Athletics Association Inc. in violation of Florida statutes. There is not yet a plan as to how that money will be paid back.

The university also transferred about $15 million to the association and the University of Central Florida Foundation, the audit states.

As well, the auditor found that the university assessed a $50 fee for some international students effective in fall 2005 without legal authority and extended credit to non-governmental entities through the office supply store, Office Plus, contrary to the Florida Constitution. Other findings ran the gauntlet from institutional oversights - such as Parking Services failing to monitor the decals its employees hand out and UCF overpaying an employee about $100,000 since 2001 - to the university paying higher premiums on building insurance than it should.

Ted Sauerbeck, audit manager for community colleges and universities with the Office of the Auditor General, said that generally, there is no penalty provided in the law for these findings.

"It's incumbent on the governing body, in this case the Board of Trustees, to ensure that corrective action is taken to address our findings and recommendations," Sauerbeck said.

Sauerbeck, a UCF alumnus, said the audit aims to ensure that UCF is using every dollar to which it is entitled. According to the audit, Sauerbeck said, this is not always the case.

Sauerbeck said that every finding in the report is important.

"We wouldn't put [the findings] in the report unless we believe them to be significant," Sauerbeck said.

UCF President John Hitt submitted a response to the findings Feb. 21. In most cases, the university pledged to revise its practices. However, for those instances where the audit claims the university acted beyond its legal capabilities, UCF's response is framed more as a difference of opinion.

Regarding the $7.4 million loan to the Athletics Association, which the audit states is not legal, the UCF response states that the audit's finding was "confusing." It goes on to say that "the authority of the university to make loans to direct-support organizations can be implied from the statutes cited in the first paragraph of the finding."

"They interpret the statute one way, and we've interpreted it differently in some of those statue instances," Grant Heston, vice president of UCF News and Information, said.

Heston said the university response to the audit's other findings is ongoing.

"The university is working hard to ensure that our operational practices and procedure are the best that they can be, and the overwhelming majority of them are," Heston said.

Heston declined to comment on the individual findings of the audit, but he said "we will take [the audit] seriously."

Heston also believes every finding is serious.

"We take them all seriously, [and] some are more procedural than others," Heston said.

Heston said that all state agencies go through this.

"This is really just kind of standard operating procedure," Heston said.

When the Future asked for more detail on individual responses, Heston declined and referred to the responses in Hitt's report.

Six of UCF's 13 findings were repeated from a previous audit in 2005, in which was disclosed 14 findings by the Auditor General

Some of these included reimbursing travelers for travel advances in a timely manner and determining insurable values for its buildings were previously documented. Although the university responded to the findings, they failed to correct the problems, according to the audit.

The university was also asked in the 2005 audit to establish policies for Parking Services employees to prevent the loss or theft of decals, as there currently exists no documentation for permits allocated by cashier to fix responsibility a loss and there is no accounting for permits sold, voided and on-hand, according to the report. In Hitt's 2005 response, the university pledged to comply with the recommendation and set an implementation date for Oct. 20, 2005. The same findings were repeated in the 2008 report, but the implementation date was changed to April 15.

Dan Holsenback, vice president for university relations, who hadn't read the audit in it's entirety at time of his interview with the Future, said that sometimes the findings are corrected immediately, and sometimes it takes time.

'The fact that it's not done does not mean we have broken the law," Holsenback said.

Sauerbeck said that the Joint Legislative Auditing Committee in the Legislature and an auditing committee in the BOG are two entities that provide oversight for the audit process.

Director of the JLAC Terry Shoffstall said that the "Legislature's focus, at this point, is the budget for the upcoming fiscal year."

"Currently the Legislative Auditing Committee does not have a meeting scheduled for the remainder of the legislative session," Shoffstall said. "At some point, after the session has completed, the staff and I will begin reviewing the audits available to us, and certainly, the University of Central Florida Audit will be one of those."

Stephanie Wilken contributed to this report.

For the 2008 report visit http://www.myflorida.com/audgen/pages/pdf_files/2008-104.pdf

For the 2005 reports visit http://www.myflorida.com/audgen/pages/pdf_files/2006-052.pdf

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