Texas universities ordered to review benefits spending

University of North Texas

Credit: WFAA

Texas universities ordered to review benefits spending

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Associated Press

Posted on June 5, 2014 at 11:28 AM

DENTON -- Gov. Rick Perry is directing the state's public universities to review how they pay employee benefits following an audit that revealed the University of North Texas for a decade misspent $83.5 million in state money.

The discovery is raising questions how UNT for years obtained millions in excess funding without drawing the attention of the state, the Denton campus or the UNT System.

Perry in a May 29 letter to university officials directed them to ensure they're paying the required amount of employee benefits, according to The Dallas Morning News.

"The inappropriate and inaccurate accounting of taxpayer funds by the University of North Texas is inexcusable," said Rich Parsons, a Perry spokesman. "Our office is taking steps to determine if other institutions of higher education are using similar methods that could result in the misuse of taxpayer money."

The letter came one day after UNT disclosed it received an excess of $83.5 million in state funds from 2004 through early this year. More than $80 million of the money was used to pay for employee benefits while the rest was inappropriately used for salaries.

UNT Chancellor Lee Jackson said last week that state and UNT officials have not determined how much the university will have to repay or over what period of time.

The state budget system dictates that if a university employee's salary comes from state funds, then so should the benefits. If the salary comes from local money, such as student fees, then benefits must be paid from local funds.

UNT's misuse of the funds raises questions as to whether other universities also are misspending taxpayer money.

Public universities each year report to the state the amounts spent on health insurance, retirement plans and other employee benefits. The state auditor's office periodically reviews the way universities account for their benefits spending.

A 2010 audit found that universities "generally complied with the requirement to report employee benefit expenses proportionately to funding sources," the Morning News reported.

Perry directed universities to conduct internal audits of their practices and give the results to his office. He did not set a deadline.

The vice chairman of the state Senate committee on higher education said Perry's letter is appropriate.

"Something happened that resulted in UNT having more money than they should have," said Sen. Kirk Watson, D-Austin. "Based upon the report that I've seen with UNT and the conversations I've had, that ought to cause us to pause and say, 'Let's make sure this is not happening elsewhere.' "

Watson said he'll wait to see the results of the internal audits before deciding whether the Legislature needs to intervene.

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