Finance audits a higher priority

Financial discrepancies throughout the UNC system have prompted renewed attention and efforts to improve accountability.

Officials hope to standardize universities’ accounting systems and provide better financial training for university staff.

The UNC-system Board of Governors made the most recent effort to address the problem by making financial accountability a top priority in the 2009-11 budget request they sent to the N.C. General Assembly.

After much debate among board members, financial accountability was bumped from the tenth and last priority for increased funding to the fourth place.

“We’ve had too many audit findings over the last two years,” said Frank Daniels, chairman of the board’s auditing committee, during the board’s meeting.

“There have been too many instances when money has not been misappropriated, but where we’ve made accounting and reporting mistakes.”

There were 55 audit findings on 11 UNC-system campuses in 2007, Daniels said.

The increase was partially caused by new auditing standards that aim to prevent, not just react to discrepancies, staff turnover on campuses and unfamiliar information technology systems, he said.

“Part of it is just a resource issue, which is something that this funding should help resolve,” said David King, the associate vice president for finance.

By making financial accountability a higher priority, the board makes it more likely the UNC system will receive the requested funding increase — a total of $5 million more than in past years.

When the board members approved the amendment, some said that correcting discrepancies has cost the UNC system in the past and is worth the investment.

“We’ll save that 5 million in less than two years if we continue the track we’ve been on,” Daniels said.

Now it only falls behind funding for campus safety, financial aid and faculty recruiting and retention.

“The board felt like it was a high priority because of the risks involved in financial operations,” King said.

“In general, the consensus was to elevate that request at least for the next budget cycle.”

The biggest problem in recent audits has been discrepancies in how individual universities track their financial transactions.

“We have to keep track of the assets that we’ve got,” Daniels said. “There’s no reason why we can’t create … a system that will number one, give us greater control and number two, save us money.”

Although the exact amount allotted for increasing financial accountability will not be decided until January, King said most of the funds will go toward standardizing the way the system reports its payroll and ensuring that all schools continue to meet federal standards for contracts and grants.

“Obviously there’s a cost of standardizing things across the system,” King said.

King said that staff turnover is higher at other UNC-system schools than at UNC-Chapel Hill and that it is part of the reason UNC-CH has a clean financial record.

“Larger campuses such as UNC and N.C. State have fewer issues in general with staff turnover, with training, (and) with implementation,” King said.



Contact the State & National Desk at stntdesk@unc.edu.