On the surface, a state audit of East Tennessee State University’s finances looks scary -- three errors to the tune of about $6.5 million.
The 76-page report – a routine audit – was released Thursday. The comptroller’s office completes one every year.
Dr. B.J. King, Associate Vice President of Financial Services at ETSU, said the financial statement her office prepares is usually accurate – down to the penny.
“[This year], it doesn't compare well,” King said. “We have not had a finding, [according to] anybody in the department's memory, in the recent past," she said.
Thursday’s report found, not one, but three discrepancies. King called them ‘classification errors’ and attributed them to human error.
"If you had two saving accounts and reported [money] in the wrong account, one savings account rather than the other, they're both assets. That's basically what the mistake was," King said.
Dr. David Collins, Vice President of Financial Services at ETSU, told auditors his office would have caught the errors, if it had been adequately staffed.
"[Collins] cited the lack of sufficient resources to provide adequate review due to staff reductions from the university's recent voluntary buyout plan (Audit Report, p. 10)."
Last March, more than 100 employees let ETSU buy out their current contracts. The move saved the University an estimated $3.5-million. Collins said he had between 20 and 25 employees at the time. Seven accepted a buyout. Four of those openings will not be filled.
"[The most detrimental aspect of those buyouts] was the years of service that everybody had in there, and the knowledge that went out the door," Collins said.
Collins outsourced ETSU’s Perkins' Loans Department to ease the workload in financial services. He does not anticipate filling any of the four eliminated positions.
“We are reviewing operations, and searching for ways to be more efficient,” he said.
"There is no doubt we are getting thinner, but like every business in America, [ETSU is] dealing with the recession," he said.
Click the play icon (above) for a video version of this report.
Click the link (top right) to read the full audit report.
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