UF makes changes based on state audit

Published: Wednesday, January 27, 2010 at 6:01 a.m.
Last Modified: Tuesday, January 26, 2010 at 11:36 p.m.

While disputing one finding of a state audit, the University of Florida has made changes based on other findings that it improperly earned interest from state funds and paid consultants higher fees than outlined in their contracts.

Florida Auditor General David W. Martin made the findings as part an operational audit of UF issued last week for the 2008 to 2009 fiscal year.

One of the audit's findings was that UF charged thousands of dollars in inappropriate fees to working professionals earning MBA degrees, but UF disagrees with the auditor's interpretation of state law.

Some of the audit's other six findings, however, have already caused UF to make changes, according to UF Chief Financial Officer Matt Fajack.

The audit found that UF received money from the state's Public Education Capital Outlay funds for building projects before construction started, earning $1.35 million in interest.

"As a result, the revenue may be inappropriately applied to purposes other than those for which the monies that generated the earnings were appropriated," the audit found.

The funds come from a tax on utilities and support building projects for educational institutions. Fajack said UF had been putting the interest into its general fund rather than applying it to construction as the law requires and has already corrected the policy.

"I think it was just a misunderstanding of the law," he said.

The audit also found that UF paid consultants rates higher than outlined in their contracts. UF paid more than $21 million to consultants in the '08 to '09 fiscal year, according to the audit.

It found UF paid a private law firm about $140,000 in the fiscal year. The firm's payments exceeded its contracted rate by $42.50 an hour, resulting in a $5,210 overpayment.

The firm has since repaid the university, according to the audit.

The audit also found that UF paid a consulting firm for developing software at rates that did not correspond to contracted rates. Fajack said the university had paid higher rates based on inflation and additional work, but was "clearly wrong."

The audit recommended UF put procedures in place preventing it from happening again, which Fajack said has been done.

"We took all the items that (the audit) brought up seriously," he said.

But UF disputes the finding on continuing education MBA programs geared toward working professionals.

The audit found that UF boosted fees by rounding up the costs of the programs, underestimating the number of students in classes, collecting money for a contingency fund and charging a provost's office "tax" on students taking the courses.

The Board of Governors, which oversees state universities, limits fees for continuing education courses to an amount sufficient to recover costs for the programs, the audit found. A similar finding had been made about UF's policy regarding the MBA programs in a state audit for the 2006 to 2007 fiscal year.

Fajack there is a "clear difference of opinion between the auditor general and some of our people" about whether the law allows fees to be charged for the programs beyond their actual costs. University officials are discussing with lawmakers about what is allowed, he said.

Jim Stultz, the auditor general's manager for colleges and universities, said the state lawmakers and the board will determine who is correct.

"We just report what we find," he said. "How that's resolved has to be handled by someone else."

Contact Nathan Crabbe at 338-3176 or nathan.crabbe@gvillesun.com. Follow him on Twitter at twitter.com/nathancrabbe.

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