Texas Southern University has “significant” financial weaknesses, the result of whole departments bypassing established purchase guardrails and the university failing to enforce established contract and accounting procedures, a state audit released this week reveals.
Lt. Gov. Dan Patrick on Wednesday called the audit “beyond disturbing.” He added that his office, together with Gov. Greg Abbott and House Speaker Dustin Burrows, has ended any spending by TSU on contracts other than ongoing university expenses needed to keep the school open.
Patrick previously requested a Texas Rangers investigation into any potential criminal wrongdoing at TSU, one of the nation’s largest historically Black colleges, and that probe is continuing.
“It is my hope, for the sake of the students at the university, that TSU can continue,” Patrick wrote on the social media site X. “TSU is solely responsible for this fiasco. If TSU does not remedy the situation, the legislature will.”
The state auditor’s office examined TSU’s finances and accounting for fiscal years 2023, 2024 and 2025, as well as taking a deep dive into its financial reporting process for fiscal years 2023 and 2024.
Among the findings:
- Records for 97% of the 60 vendors the state auditor checked did not match corresponding contract documentation. What contract data information there was, had inaccuracies throughout.
- A complete lack of a regular physical inventory procedure. The last time an annual inventory on the university’s physical assets was conducted was in 2019. “Significant deficiencies in the University’s asset management functions prevented it from accurately accounting for and protecting its assets,” the state audit revealed.
- Frequently late and inaccurate financial reporting with reports getting to the state comptroller’s office nearly a year late in 2023.
- A failure to shore up budget accounts to reflect staffing shortages.
In a Dec. 22 letter addressed to State Auditor Lisa Collier, TSU President J.W. Crawford III laid out a list of remedies the school has taken in the last year while also stating the school’s commitment to correcting the deficiencies.
“The University is committed to remediating the findings by the State Auditor’s Office,” Crawford’s 12-page response stated. “As an institution, we are implementing initiatives to improve and strengthen processes and internal controls across all areas of our operations, both financially and operationally.”
Crawford also noted that some 200 vacancies, some in key positions like the IT department, have exacerbated the problems with financial oversight since the last audit of the university was done in 2006. Those critical vacancies have “fostered longstanding structural weaknesses that have had cascading effects over the intervening years, driving operational vulnerabilities and contributing significantly to the deficiencies identified in the audit.”
Patrick noted in his post on X that Crawford agrees with the state audit findings and has been working with the state auditor’s office to fix the deficiencies.
On Wednesday, TSU released a statement saying that it is “deeply appreciative for and highly values the work of the Texas State Auditor’s Office, which has provided recommendations to strengthen the compliance, integrity, and effectiveness of institutional financial and business processes, including asset management. The University has adopted all SAO recommendations and concurs with the Auditor regarding the importance of predictable regularity of financial operations and timely, repeatable processes.”
In November, the state auditor’s office released preliminary findings revealing more than 700 invoices totaling more than $280 million were tied to vendors whose contracts had expired in the contract database. And more than 800 invoices worth nearly $160 million were dated before the purchase were officially requested or approved.
The Houston university, which has an enrollment of about 8,000 students has had a history of financial and operational problems dating back more than 40 years.
This week’s audit is reminiscent of a 1999 review by the state comptroller’s office. In that case, then Deputy Comptroller Billy Hamilton conducted a review of the school and delivered a list of 124 recommendations to then Gov. George Bush and Lt. Gov. Rick Perry.
“For more than two decades, TSU has experienced serious financial and management difficulties,” Hamilton wrote more than 25 years ago. “Most recently, these difficulties include declining student enrollment, critical financial audits, potential losses of federal funding, and contingency appropriations by the Texas Legislature to cover anticipated cash-flow shortages.”
In 2006, former university president Priscilla Slade was charged with embezzling more than $600,000 from the school, which she allegedly spent on china, furniture, and landscaping for her home.
Other operational problems have also persisted, dating back to the 1990s.
In 1992, the famed “Ocean of Soul” band was dissolved after several members — including those who were not students —were accused of shoplifting during a school-sponsored trip to Japan.
In 2003, a cheating scandal was uncovered where a university employee changed the grades of 31 students in exchange for money.
In 2020, allegations of bribery and kickbacks in the law school admissions process led to the ousting of the sitting president at the time, Austin Lane.
Students with low academic credentials were admitted and given more than $430,000 in scholarship money, and cashier’s checks and money orders were found stashed under one admission official’s desk calendar, an internal investigation found.
“The legislature has continued year-after-year to try to help the school,” Patrick said in a statement on X in November. “It appears the legislature has been misled over this time period on promised improvements in accounting practices and contracting.”
This article first appeared on The Texas Tribune.