Key Takeaways:
- Texas Southern University (TSU) has significant financial weaknesses due to departments bypassing established purchase guardrails and the university’s failure to enforce contract and accounting procedures.
- A state audit revealed inaccuracies in contract data, a lack of physical inventory procedures, and late and inaccurate financial reporting.
- The university has a history of financial and operational problems dating back over 40 years, including embezzlement, cheating scandals, and bribery allegations.
- The state auditor’s office has identified significant deficiencies in TSU’s asset management functions, including a lack of regular physical inventory procedures and inaccurate financial reporting.
- The university has committed to remediating the findings and implementing initiatives to improve and strengthen processes and internal controls.
Introduction to the Audit Findings
The state audit of Texas Southern University (TSU) has revealed significant financial weaknesses, including whole departments bypassing established purchase guardrails and the university failing to enforce established contract and accounting procedures. The audit, which examined TSU’s finances and accounting for fiscal years 2023, 2024, and 2025, found that records for 97% of the 60 vendors checked did not match corresponding contract documentation. Furthermore, the audit revealed a complete lack of a regular physical inventory procedure, with the last annual inventory conducted in 2019. This lack of oversight has resulted in significant deficiencies in the university’s asset management functions, preventing it from accurately accounting for and protecting its assets.
Audit Findings and Recommendations
The state auditor’s office identified several key areas of concern, including frequently late and inaccurate financial reporting, with reports getting to the state comptroller’s office nearly a year late in 2023. Additionally, the university failed to shore up budget accounts to reflect staffing shortages, which has exacerbated the problems with financial oversight. The audit also found that some 200 vacancies, including key positions like the IT department, have contributed to the problems with financial oversight since the last audit of the university was done in 2006. These 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.
University Response and Commitment to Change
In response to the audit findings, TSU President J.W. Crawford III laid out a list of remedies the school has taken in the last year, including implementing initiatives to improve and strengthen processes and internal controls across all areas of operations. Crawford also noted that the university is committed to remediating the findings by the State Auditor’s Office and has been working with the state auditor’s office to fix the deficiencies. Lt. Gov. Dan Patrick has also taken action, calling the audit "beyond disturbing" and announcing 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.
History of Financial and Operational Problems
TSU has a history of financial and operational problems dating back over 40 years, including embezzlement, cheating scandals, and bribery allegations. In 1999, a review by the state comptroller’s office revealed significant financial and management difficulties, including declining student enrollment, critical financial audits, and potential losses of federal funding. In 2006, former university president Priscilla Slade was charged with embezzling over $600,000 from the school. Other operational problems have also persisted, including a cheating scandal in 2003 and allegations of bribery and kickbacks in the law school admissions process in 2020.
Conclusion and Next Steps
The state audit of TSU has revealed significant financial weaknesses and a history of operational problems. The university has committed to remediating the findings and implementing initiatives to improve and strengthen processes and internal controls. However, the legislature has expressed concern that the university has not been transparent about its financial and operational problems, and that the state has been misled about promised improvements in accounting practices and contracting. As the university moves forward, it will be important for it to prioritize transparency and accountability, and to work closely with state officials to address the significant deficiencies identified in the audit. Ultimately, the goal is to ensure that TSU is able to provide a high-quality education to its students, while also maintaining the trust and confidence of the state and the public.
