FAMU board gets ‘grim’ reports on finances

Received by Newsfinder from APFeb 26, 2005 17:54 Eastern Time TALLAHASSEE, Fla. (AP) _ The books at Florida A&M University remain in disarray more than a year after the school promised to straighten out its finances. Interim president Castell Bryant said the reports presented Friday to the university’s Board of Trustees were “grim, disappointing, frightening _ and absolutely necessary.” But Bryant vowed to fix the problems. “We must end the year in the black,” Bryant said. “Sometime in the next month or so, you will receive a plan of action from me.” Trustees said they worried the federal government could cut off financial aid to Florida’s only historically black public university. They wondered whether FAMU would have to drain its reserves to pay bills. An accounting report by outside auditor KPMG has confirmed “our worst fears,” said newly-elected trustee chairwoman Challis Lowe. Even after KPMG examined the school’s records, the university was not able to account for how it spent millions of dollars in public money. Officials know they are losing money on campus housing _ but couldn’t tell trustees whether they had lost $1.7 million or $4 million. FAMU’s athletic department will spend $3.5 million more than it takes in this year, even though officials know it doesn’t have the money. KPMG’s report shows the university didn’t balance its books and often could not track how it spent money. The auditors suggested conducting a forensic review of FAMU’s accounting procedures. This fiscal year, the university spent at least $51.1 million more than was budgeted. It paid staff $19.5 million less in salaries than state records said it should. KPMG could not explain the discrepancy. Auditors found that FAMU staff could not find reconciled bank accounts for the second half of 2004, had mixed up credits and debits on ledgers and could not provide budget policies. Daily cash reports had figures that were crossed out and marked with correction fluid. The U.S. Department of Education also reported that FAMU was not complying with regulations for federal aid. The vast majority of FAMU students get financial aid. The department recommended wholesale changes and said FAMU should repay some funds. “If our financial aid is taken away, we don’t have students. Therefore, we don’t have a university,” Lowe said.