Texas Southern Couldn't Locate 83% of Assets Auditors Tested

When the Texas State Auditor's Office⧉ tried to physically verify a sample of Texas Southern University's own recorded assets, it could not find five out of every six.▸ Auditors tested 60 controlled and capitalized assets pulled from the university's Banner accounting system and located only 10; the other 50 -- 83 percent -- could not be found anywhere⧉. In that same sample, auditors also flagged a $560,000 bus the university had already been paid for by its insurer⧉, yet kept listing as an asset and depreciating on its books years after the payout.

The University told auditors it last conducted a full annual physical inventory in 2019⧉ -- despite its own policy requiring one every year.▸ The 60-asset sample was drawn from a population of 4,112 asset records⧉ that had location and tag information in Banner in the first place; it is a targeted, nonstatistical sample the auditors say cannot be projected onto that full population. But the breakdown didn't stop at the sample: when auditors separately picked 60 more assets by walking the campus, more than half weren't listed in Banner at all⧉ -- in the university's radio station alone, ten rooms of equipment yielded only three tagged, recorded assets.

On top of that, the University kept a second, disconnected Microsoft Access database with more than 7,700 assets that don't appear in Banner⧉ at all -- a real count across the whole database, not a sample.▸ The warehouse-manager position⧉ most directly responsible for tracking physical assets sat vacant for four years.

The University's own data showed 8,144 vendor invoices dated before the purchase requisitions⧉ that were supposed to authorize them -- a real count of every invoice in that condition, not an estimate.▸ Separately, its contract database and Banner records showed 743 invoices, each over $25,000, paid to vendors whose contracts had already expired⧉ -- multiplying that count by the audit's own $25,000 floor puts at least $18.6 million in spending processed after the underlying contract had already lapsed, and the real figure is almost certainly higher, since $25,000 was a sampling threshold, not a ceiling on any single invoice. Of the invoices auditors sampled at that threshold, the University could produce a valid signed contract for only 46 of 60 -- 77 percent -- and even where a contract existed, 58 of 60 contract-database records tested, 97 percent, didn't match the actual paperwork⧉: wrong dates, wrong contract numbers, wrong approval status.

Texas requires every state agency and university to hit fixed reporting deadlines with the Comptroller of Public Accounts⧉ -- audited financial statements from institutions of higher education are due December 15.▸ Texas Southern's audited statements for fiscal 2023 and fiscal 2024 arrived 10 months and 4 months late⧉, respectively. In the meantime, the unaudited numbers it did submit on time were wrong: the University misstated debt-principal payments by $86.5 million in FY2023 and $77.3 million in FY2024⧉ -- $163.8 million combined -- misrepresenting what it had actually paid toward its own bonds. Because the audited statements were late, the Comptroller's Office had to make its own corrections to the unaudited data before folding Texas Southern's numbers into the state's consolidated financial report.

Texas Southern University agreed with all of the auditors' recommendations⧉ -- enforcing requisition and inventory policy, building a centralized and accurate contract database, meeting the Comptroller's reporting deadlines, and restricting Banner access, which auditors found improperly open for 9 of 303 users tested, 3 percent⧉.▸ The report ties the breakdown partly to staffing: vacancies in positions responsible for reconciliations and asset tracking, including the four-year-vacant warehouse-manager role, left the university unable to keep pace with its own recordkeeping requirements even where the policies existed on paper.