A Management Letter on the Financial and Operational Review of Texas Southern University Page: 1 of 7
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OFFICE OF THE STATE AUDITOR
TWO COMMODORE PLAZA
206 EAST NINTH STREET, SUITE 1900 LAWRENCE F. ALWIN, CPA
AUSTIN, TEXAS 78701 State Auditor
November 15, 1996
Mr. Enos Cabell, Jr., Chairman
Board of Regents of Texas Southern University
4103 Frost Lake Ct.
Missouri City, Texas 77459
Dear Mr. Cabell:
In response to your August 1996 request, the State Auditor's Office has conducted a financial and
operational review at Texas Southern University (University). Neither proactive leadership nor
fundamental oversight systems are in place to prevent a future financial crisis and to ensure
accountability for the achievement of fiscal and administrative goals. The University does not currently
have the information systems necessary to provide accurate, timely data required for monitoring and
decision-making, nor the human resources support necessary to build reliability and effectiveness in the
implementation of policies and procedures.
As a result, Texas Southern University is projected to incur operating deficits totaling over $8 million
during fiscal year 1997 unless radical changes are instituted in the University's financial management
practices. The potential shortfall is primarily a result of the University's inability to collect two major
sources of revenue on a timely basis; federal student financial aid and grants receivable. Although the
Board of Regents and management have begun to address the revenue shortfall, they must move from
crisis management to demonstrating sustained progress in achieving defined goals and objectives.
Our review included an examination of cash flows, financial controls, and management systems such
as human resources and information management. Also at the request of the University, the State
Auditor's Office assisted University management in addressing a crisis in financial aid. These efforts
included assisting with the University's corrective action plan for re-engineering the Financial Aid
Department and addressing federal noncompliance issues.
LACK OF UNIVERSITY ACCOUNTABILITY SYSTEMS CONTRIBUTE TO CRISIS MANAGEMENT
Comprehensive internal oversight systems are not in place to provide early warning of fiscal crisis and
promote achievement of the University's mission. Specifically, current human resource, financial, and
information systems do not consistently support goals and strategies that have University-wide impact.
SAO Report No. 97-018
P.O. BOX 12067 AUSTIN, TEXAS 78711-2067 0 PHONE: (512) 479-4700 0 FAX: (512) 479-4884 0 INTERNET: AUDITOR@sao.state.tx.us
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Texas. Office of the State Auditor. A Management Letter on the Financial and Operational Review of Texas Southern University, report, November 1996; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth518471/m1/1/: accessed May 22, 2019), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.