DALLAS — The University of North Texas manipulated payroll expenditures to receive overpayment from the state for years and should pay back a minimum of $75.6 million, according to a report from State Auditor Jack Keel.
"University senior managers with fiscal responsibility should have known, or did know, that the University consistently exceeded its legislative appropriations," according to the audit
Auditors documented that the university had been receiving excessive state payments for employee benefits since at least 2000, and possibly as far back as the 1970s.
"Auditors were unable to determine precisely when the practice began or its original intent," the report said.
The investigation began in 2012 when the State Auditor's Office received an anonymous complaint about improper accounting practices.
UNT paid for an independent audit earlier this year that found the university received up to $83 million in excess state funds from 2004 to 2014.
The state auditor's investigation reported that UNT manipulated payroll expenditures in a state accounting system and paid employees with state funds when those employees were ineligible.
The report found that UNT transferred expenditures between accounts to obtain excess state funds after the university's allotment ended. The scheme involved employees in departments for budget, accounting, purchasing and payment, and payroll, according to the report.
"Auditors did not identify any attempt by the university to conceal its activities or transactions," the report said.
Investigators also found that state agencies failed to uncover UNT's faulty financial reporting. Gov. Rick Perry has asked other public universities in Texas to audit their benefits spending and submit reports in the wake of the UNT controversy.
After the accounting irregularities were disclosed in April, Moody's Investors Service and Fitch Ratings shifted their outlooks to negative on UNT.
Moody's rates UNT System Aa2, while Fitch rates the system AA.
Moody's warned that resolution of the accounting matter in favor of the state could lead to a UNT downgrade.
