Trustees find $14 million, work for more secure financial future

The Board of Trustees scrutinized UVM’s financial policies in a meeting on the budget Thursday, Sept. 4, following a revealing audit of the University’s financial processÂes this summer.

The audit was conducted in part due to the breach of internal policies and procedures that occurred last semester, which resulted in the resignation of UVM’s then Vice President for Finance and Administration, J. Michael Gower.

In 2006, UVM signed multiple contracts that were not approved by the Board of Trustees in an attempt to deal with problems in the implementation of the University’s new PeopleSoft financial management system.

The total cost of all nine contracts exceeded $5 million, with four of the contracts individually surpassing the $250,000 limit for unapproved contracts. Gower resigned immediately after the breach came to light, and the administration quickly launched an audit of its financial practices.

Independent auditors from the firm Deloitte & Touche LLP were contracted to analyze UVM’s money management practices and concluded that its failure to follow its own policies was the cause of the breach, the firm said.

The financial mismanagement of the University was a major feature at the Board of Trustees’ budget meeting, with unexpected expenses and decreased legislative appropriations creating discontent among the trustees.

The estimated budget shortfall for this fiscal year was projected to be $15 million on the budget which totaled $284,770,000 that was approved by the trustees last Friday.

The discovery of $14 million in previously unaccounted for funds added a positive note to the Board of Trustees’ meeting, but provided what UVM Trustee Susan Hudson-Wilson called, “another example of sloppy handling of money.”

The funds began to augment due to an oversight in UVM’s student loan program, which was phased out in 2002 with the creation of the Vermont Student Assistance Corporation (VSAC).

During the budget meeting, Richard Cate, UVM’s current Vice President for Finance and Administration, explained that payments from loans given to students directly from UVM prior to 2002 continued to come into an unencumbered general fund pool.

An additional $6.5 million is anticipated to be available from the old loan fund over the next six years.

During the meeting, Cate expressed his desire to improve the University’s money management practices after the turbulent past year, assuring the Board that the lax policies of the past have stopped.