State Audit Reveals TSU Continually Mismanaged Funds

Image Credit: tnstate.edu

The Tennessee Conservative [By Jason Vaughn] –

The Tennessee Comptroller of the Treasury found three different violations in the way Tennessee State University has been handling funds, according to a recently released audit.

According to the audit, poor record keeping and procedures have made it difficult for the university to keep up with the amount of money that was going in and out of their accounts.

“We all know that when you get that statement from the bank at the end of the month, you need to reconcile those amounts to make sure they match. And what we were finding at TSU was they weren’t doing that. And they haven’t been doing it correctly for a number of years,” said John Dunn, Communications Director for the comptroller’s office.

Dunn says this is not the first time this issue has come up for TSU. He says two of the same problems have come up for the past five years and the third was a problem for the seventh year in a row. 

Dunn also says the university has been given solutions for how to fix the problem in the past.

“It’s ultimately management’s responsibility to correct audit finding, and when we see the same problem showing up year after year, it gives us an indication that something is seriously wrong,” stated Dunn.

The auditors warn that these continued problems could leave TSU struggling financially because they may end up spending money that they do not actually have or they may fail to fund programs that they have enough funding for.

A TSU spokesperson sent the following statement to Fox 17 News:

The Tennessee Comptroller of the Treasury’s Office released on Thursday Tennessee State University’s annual audit findings for Fiscal Year 2021 (covering the period from July 2020-June 2021). The Comptroller rendered an unmodified or “clean” audit opinion which is the highest-level opinion that can be issued. This means the financial statements of Tennessee State University are fairly stated in conformity with generally accepted accounting principles (GAAP). 

The audit contained findings that related to issues with how TSU reported its financial information during the period under audit. We appreciate the Comptroller’s office for working with us to identify and correct these issues. In January 2021, following a previous audit, TSU made a significant change in leadership within its Division of Business and Finance. TSU’s new Vice President of Business and Finance and Chief Financial Officer, Douglas Allen, CPA, MBA, immediately implemented, and continues to take substantial corrective action to address issues brought forward by the Comptroller’s Office; none of these are yet reflected in the current audit period but will be reflected going forward. As the highest-level opinion rendered for the 2020-2021 period, the audit is clear that the Comptroller’s findings reflect an administrative reporting issue, not misappropriation or mismanagement of state funds. TSU takes its fiduciary responsibilities to Tennessee’s taxpayers, its students, and all who are part of our TSU family extremely seriously and our new leadership in our Office of Business and Finance is in process of resolving them completely.

TSU also sent the following additional notes:

Comptroller’s Office customarily issues annual financial audit reports of all public institutions. This is not unique for TSU or any university to be audited. It’s a standard review and accountability measure. 

Please note that this report, which reflects fiscal year 2021, covers only half of 2020 and 2021 but was not initiated until Jan of 2022. Therefore, what appears current is not indeed the case.

Corrective action includes restructuring staff positions in the Division of Business and Finance, adding new personnel, increasing training, and a commitment to enhanced financial reporting.

The audit did not indicate that any funds were stolen or misappropriated. The majority of the money that was initially unaccounted for was located and accounted for during the auditors’ investigation. Their report only focused on errors in how the money is tracked and handled, not how it is being used.

About the Author: Jason Vaughn, Media Coordinator for The Tennessee Conservative  ~ Jason previously worked for a legacy publishing company based in Crossville, TN in a variety of roles through his career.  Most recently, he served as Deputy Director for their flagship publication. Prior, he was a freelance journalist writing articles that appeared in the Herald Citizen, the Crossville Chronicle and The Oracle among others.  He graduated from Tennessee Technological University with a Bachelor’s in English-Journalism, with minors in Broadcast Journalism and History.  Contact Jason at news@TennesseeConservativeNews.com