UNC-Chapel Hill’s financial statements were found to have “significant misstatements and omissions,” according to a recent state audit.
State Auditor Beth Wood wrote in the audit that her staff found certain deficiencies in UNC’s internal control “that we consider to be material weaknesses.”
The audit found UNC made misstatements and errors in a number of cash accounts and statements of grant and financial aid revenue due to the implementation of a new financial system. UNC also made errors in blending some units for its financial reporting, and omitted or submitted late some required statements and disclosures.
“Without these error corrections and inclusion of all required statements and disclosures, users of the financial statements could be misinformed about the University’s financial condition, including sufficiency and flexibiltiy of resources, asset performance, debt management and operating results,” the audit said.
In a letter to Wood, UNC Chancellor Carol Folt attributed problems to the implementation of a new financial, accounting, human resources and grant management system, which replaced 25-year-old technology.
“We should have better anticipated that an undertaking of that size would come with significant challenges,” Folt wrote. “We also transitioned to a the new system midway through the fiscal year and encountered problems with conversions. Additionally, we had to address the unexpected retirement of the University’s controller of almost 22 years. These factors created enormous challenges for us, but I assure you this was a one-time incident.”
Folt said the university had hired Huron Consulting Group, along with a significant increase in internal finance staff. UNC has also hired a new director of campus financial reporting, analytics and business intelligence, while launching a search for a new controller.
UPDATE: UNC spokesman Jim Gregory said in a statement Monday that UNC has an opinion from the state auditor that the university’s financial position is strong. “In fact, Fitch Ratings affirmed our AAA rating after the report published,” Gregory said in the statement.