2008 Woodie Awards
UCF loans an unaccounted for $7.4 million to Athletics without a repayment schedule
Nada Taha
Issue date: 3/19/08 Section: News
Sauerbeck said the university was cited on two different occasions in the 2007 audit concerning the university's dealings with the Athletics Association, both of which have been repeat offenses in previous audits dating back to the 2003 fiscal year.
"This is not something we see ordinarily," Sauerbeck said. "With the other 11 universities, I don't recall any of those findings."
In July 2003, the university's Athletics Department incorporated as a separate entity and became the UCF Athletics Association Inc. - therefore, under Florida Statutes, the university had no authority to make any transactions to the association, Sauerbeck said.
"A department is part of the school with employees of the university, and the moneys that were handled were subject to all internal controls and limitations that all university public moneys are subject to," Sauerbeck said. "But when the money goes to a DSO, they are not necessarily subject to the same controls and limitations that they would be if they were handled by someone who worked for the university."
University officials said they understood the statutes differently.
"The university believes it was both authorized and legal. There is no basis for it not being legal," UCF Vice President and General Counsel Scott Cole said. "They're a DSO, and by statute they have the right to make expenditures on behalf of the university and to use university resources. It was certainly legal to make those loans."
The university's general counsel cited in the audit that authority could be implied from numerous Florida statutes, but the auditor general said implication and interpretation doesn't hold strong.
"None of the statutes cited in the general counsel's response specifically provide the university authority to make loans to other entities," the audit stated.
It went on to say that Florida Statutes highlight that "direct-support organizations are intended to work to benefit the university, and not operate as a liability to the university by borrowing money from it."
"This is not something we see ordinarily," Sauerbeck said. "With the other 11 universities, I don't recall any of those findings."
In July 2003, the university's Athletics Department incorporated as a separate entity and became the UCF Athletics Association Inc. - therefore, under Florida Statutes, the university had no authority to make any transactions to the association, Sauerbeck said.
"A department is part of the school with employees of the university, and the moneys that were handled were subject to all internal controls and limitations that all university public moneys are subject to," Sauerbeck said. "But when the money goes to a DSO, they are not necessarily subject to the same controls and limitations that they would be if they were handled by someone who worked for the university."
University officials said they understood the statutes differently.
"The university believes it was both authorized and legal. There is no basis for it not being legal," UCF Vice President and General Counsel Scott Cole said. "They're a DSO, and by statute they have the right to make expenditures on behalf of the university and to use university resources. It was certainly legal to make those loans."
The university's general counsel cited in the audit that authority could be implied from numerous Florida statutes, but the auditor general said implication and interpretation doesn't hold strong.
"None of the statutes cited in the general counsel's response specifically provide the university authority to make loans to other entities," the audit stated.
It went on to say that Florida Statutes highlight that "direct-support organizations are intended to work to benefit the university, and not operate as a liability to the university by borrowing money from it."