A Management Letter on the Financial and Operational Review of Texas Southern University Page: 4 of 7
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Mr. Enos Cabell, Jr., Chairman
Board of Regents of Texas Southern University
November 15, 1996
Management has taken action to postpone the impending shortfall by reallocating the sources of
revenue used for payroll expenses. Typically, the University's monthly payroll expenses are funded
two-thirds by state appropriations and one-third by local funds to comply with state law regarding
proportional funding. The University will postpone the deficit and maintain proportional funding
compliance by using appropriations to cover all payroll expenses for the first eight months of the
fiscal year and local funds for the last four months. However, if financial aid reimbursements have
not been recouped by April, the deficit could be severe in the last four months of the year, especially
if delays in collecting local grant funds have also continued.
The University's fiscal year 1997 cash position has been evaluated based on expected expenditures
and revenues related to federal grants and local funds. State appropriations were not included in the
analysis since the realization of those funds is not in question. Following are projections of the
University's cash flows under three scenarios of financial aid reimbursement:
Cash Flow Projections For Fiscal Year 1997
Operating Surplus/(Deficit) By Month*
SCENARIO 1: SCENARIO 2: SCENARIO 3:
MONTH No Federal Receive 50 percent of Receive 75 percent of
Reimbursement of Estimated Financial Aid Estimated Financial Aid
Financial Aid Reimbursement Reimbursement
SEPTEMBER 1996 $ 2,257,233 $ 2,257,233 $ 2,257,233
OCTOBER 2,042,006 2,042,006 2,042,006
NOVEMBER 1,714,000 1,714,000 2,014,000
DECEMBER 1,555,431 1,755,431 1,855,431
JANUARY 2,822,629 3,372,629 3,722,629
FEBRUARY 4,074,432 5,074,432 5,724,432
MARCH 2,948,031 4,583,031 5,398,031
APRIL 657,026 2,927,026 4,107,026
MAY (1,472,892) 1,547,108 2,977,108
JUNE (4,242,589) (562,589) 1,157,411
JULY (6,512,878) (2,172,878) (262,878)
AUGUST 1997 ($8,133,499) ($3,133,499) ($883,499)
*The surplus(deficits) projected each month are cumulative representations.
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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/m1/4/: accessed May 19, 2019), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.