More Oversight Planned At UCF After Improper Spending

By on October 17, 2018 in News Service of Florida

Tallahassee, FL – After the University of Central Florida improperly paid for building projects, the university system’s Board of Governors is moving forward with a plan that will require more oversight of so-called “carry-forward” funds that universities, unlike most state agencies, are allowed to accumulate.

Syd Kitson, chairman of the board’s Budget and Finance Committee, said Tuesday the university system had accumulated more than $800 million in carry-forward funds as of August.

The funds have come under extra scrutiny after a state audit determined in August that UCF had improperly used $38 million in state funding to construct a campus building. The school’s use of the accumulated operating funds was a direct violation of state policy that restricts that funding to activities like instruction, research, student services and maintenance. UCF last month said other projects also appeared to be improperly funded.

The revelation about the UCF spending prompted the Board of Governors to call for all 12 universities to review their funding of building projects over the last decade, while UCF is conducting its own investigation of the improperly used funds.

Incoming House Speaker Jose Oliva, R-Miami Lakes, is also leading a legislative panel that will review the issue.

Without directly referring to the UCF issue, Kitson said the university system’s accumulation of carry-forward funds is likely to become an issue as the schools advance their budget requests to the Legislature for the 2019-2020 academic year.

“The idea is for us to work together on this. There is an issue here. There were some events that occurred last year that have raised a lot of questions. And we’re all trying to answer those,” said Kitson, whose committee met Tuesday in Tampa. “We need to take responsibility for it. And we need to step forward and work together to make it happen.”

Kitson outlined a plan, which he called “proactive,” that would require universities to develop spending plans for a portion of the carry-forward funds.

Of the more than $800 million, Kitson said $246 million is being held by the schools under a state requirement that each institution have a 5 percent reserve. Another $290 million is obligated under contracts and other arrangements, he said.

But he said the new oversight plan would focus on the remaining $289 million in carry-forward funds being held by the schools.

Kitson said the board will ask each school to develop a plan to spend those unobligated funds on uses such as the deferred maintenance of buildings, safety measures or financial aid.

The spending proposals would then be forwarded to the Board of Governors, which would review the plans in January, prior to the March start of the 2019 legislative session.

“The idea would be that these funds would stay at the university frozen in that carry-forward account, and once we go through an approval process here it would then be released to the university,” Kitson said.

He said the Legislature “would recognize that we’re being thoughtful about these funds. We won’t have to ask for as much. We are addressing the issue.”

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