Audit reveals unbelievable mismanagement at TSU and Comptroller recommends major changes including vacating the Board.

by Rod Williams, Feb. 26, 2023 - The State Comptroller office recently conducted an audit of Tennessee State University, and the findings are astoundingly bad.  Here is an example of what the audit found:

During our review, TSU leadership provided inconsistent information regarding key actions and decisions. Based on our review of available information, TSU management's lack of planning and sound decision-making coupled with the institution’s history of systemic failures in fundamental accounting and fiscal areas are cause for serious concern. Key staff did not properly assess the risks inherent to increased admissions, including the basic needs of housing the student population and fulfilling scholarship obligations, and did not take substantive action for long-term solutions.

TSU does not even do basic bank statement reconciliation and made no attempt to correct prior audits. 

In the most recent Financial and Compliance Audit Report, for fiscal year ending June 30, 2021, the Division of State Audit noted uncorrected prior audit findings. These findings extended from management’s disregard of basic financial controls and fiscal management. For one issue, management has allowed systemic breakdowns of controls to result in errors in financial reporting for seven consecutive years. The report noted the lack of processes to record significant financial transactions, perform routine bank reconciliations, and manage accounts receivable, including timely collections. 

The audit examines the problem of insufficient housing for TSU students and says the university failed to consider housing students when it increased enrollment. The leases that TSU negotiated with local hotels to house students were super expensive for the University, which of course means they were paid for by the taxpaers. See the below chart. 

Wow! $139 a night. That is expensive housing! As an example of how TSU compares to other state universities, the University of Memphis only houses 300 students off campus and The University of Tennessee-Knoxville only houses 250. One of the conclusions of the audit was, "TSU management's lack of planning and management exacerbated the university’s existing housing problem." Conducting the audit, TSU could not even tell state auditors who negotiated the leases. Unbelievable!

Another area of concern in the audit is the way TSU uses grade point averages in admissions procedures.  This is also unbelievable. 

According to the university registrar, the GPA considered for admissions and scholarships differ, but in both instances, TSU uses the GPA that is listed on the student’s high school transcript even when the GPA calculation is not comparable. For example, the GPA criteria used by TSU for admission and scholarship decisions is based on a 4.0 scale, but some high schools use a 5.0 scale or even a 100-point scale. However, according to the university registrar and the associate vice president for enrollment, TSU does not recalculate the GPA when making admission or scholarship decisions. 

What? I think any intelligent child could see the lack of logic is this way of using GPA scores. 

There is much much more in the 81-page report illustrating the astounding mismanagement of TSU. Here are some of the comptroller's recommendations:

•  The General Assembly could place TSU under the authority of the Tennessee Board of Regents (TBR). ... Authority over TSU operations could be returned to the TSU Board of Trustees once certain conditions are met or after a specified period of time. 

• The General Assembly could vacate and restructure the TSU Board of Trustees. Since 2017, a 10-member local governing board of trustees has been responsible for overseeing the university’s management and governance, including budgeting and other important areas of operations. The board has not exercised effective oversight over TSU management regarding the university’s ongoing housing problem and fiscal practices.

• The General Assembly should consider mandating that TSU submit an annual scholarship plan and monthly reports regarding the number and value of all scholarships offered and the number of signed scholarship acceptance offers. 

• The General Assembly should consider mandating that TSU submit housing application data and enrollment application data on a monthly basis between March and September of each year. 

• The General Assembly should consider mandating that TSU provide projected enrollment classification data for the coming fall semester on November 1 of each year.

• The TSU Board of Trustees could replace current TSU management. The lack of planning and management on the part of TSU management has exacerbated the university’s existing housing problem.

• The TSU Board of Trustees should consider implementing a policy requiring the board’s prior approval of financial and budget changes, especially concerning scholarships. 

• TSU management should consider improving its responsiveness to communications received from parents and students. 

•  TSU management should consider revisiting what approvals are needed for transfers of funds from any of the university’s accounts to the plant funds and ensure that documentation is attached to any accounting entries. 

• TSU management should consider properly documenting scholarship award decisions and including a multiple-step approval process. While conducting the research for this special report, the 

To read the full audit report, follow this link. 

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