In a letter distributed on Thursday, University of North Texas System Chancellor Lee Jackson said multiple issues recently revealed in the system's financial accounting are not "long-lasting or permanently damaging."
At a meeting of the system's board of regents on Thursday, the system's chief internal auditor, Michelle Finley, said the budget revenues at the system's flagship university, the University of North Texas, may have been overstated by $23 million since 2012. She noted that the finding was part of a full review that is currently underway.
In his letter, Jackson said UNT's budget revenue estimating is just one of three overarching problems with the system's accounting. Another issue, which the chancellor noted would take several months to address, deals with the use of state funds to pay benefits for locally funded UNT employees. The third matter is inadequate financial management procedures, which Jackson said were "manual, not fully automated, or had become outdated."
A disclosure in a Securities and Exchange Commission filing submitted by the system in February said: "Transactions related to the state-funded benefits are currently being analyzed, which may result in a determination that UNT was overfunded by the State of Texas for employee benefits. UNT System is working with appropriate State agencies to determine whether overfunding occurred and whether reimbursement to the state may be necessary."
At Thursday's board meeting, Jackson said the financial and administrative officials at the system and its component institutions are "united in wanting to resolve these questions as timely as is possible to do so accurately."
"In some ways, it’s the cloud of uncertainty that creates an anxiety that may be more significant than the final impact when we can answer the questions," he said.
In his letter, the chancellor noted that despite these issues, which have prompted some crediting agencies to downgrade their evaluation of the system's economic outlook, the system's financial resources remain healthy.
"Our enrollment growth is steady, our revenue sources are stable, our debt levels are manageable, and our fiscal practices have been conservative in key budget areas," he wrote.
He said the whole system is committed to transforming its financial reporting procedures.
"Texas needs more, not fewer, great universities," he wrote. "The University of North Texas, with the full support of our System, will quickly make changes in these key administrative areas to continue its rise to greater leadership and academic quality."