UNT president: Students won't suffer due to $75M scandal

DENTON -- The University of North Texas may have to repay more than $75 million that it was overpaid by the state.

UNT President Neal Smatresk isn't mincing words in taking accountability for years of bad accounting in the university's books.

"Were we non-compliant? Yes. Did we fail to follow proper state procedures?" Smatresk said. "We sure did."

A report from the state auditor shows UNT received more than $75 million more in funding than it should have by allegedly "manipulating payroll" and "paying employees with state funds when those employees were not eligible to be paid with state funds."

Smatresk took on this financial mess when he took his job in February of this year. The state learned of it in 2012, thanks to an anonymous tipster.

In his report, the auditor argues it happened through a coordinated effort by the university's budget, accounting, and payroll staff. He writes they "should have known, or did know, that the University consistently exceeded its legislative appropriations."

"The day I heard, we took action," Smatresk said.

University investigators are conducting their own investigation, but have not found criminal negligence.

UNT has found new hires.

"We've basically replaced all of the senior leadership and many of the mid-level managers in that position, because we won't stand for people who aren't doing their job well," Smatresk said.

He won't say how many tied to the financial scandal are no longer employed with UNT, but he's confident between new people and new accounting software, this won't happen again.

In the meantime, the state auditor wants $75 million back. UNT's chancellor is handling talks with the state, trying to bring down that number, so they don't have think about where they'll find the money yet.

But Smatresk had this message for the students: "We will make sure that barring grossly unforeseen circumstances, they are not impacted by any of these decisions," he said.

It could help in UNT's argument to lower the cost, that in the report, the auditor admitted that the state's own auditing checks and balances, as they stand now, would never have found this problem.

The state comptroller is looking into that issue. This also helps explains how it could have gone on for so long without the state realizing.