TSU, state clash over audit as Tennessee lawmakers consider vacating board

Tennessee State University's board may be vacated by the state if a proposed bill passes the legislature and is signed into law by Gov. Bill Lee.

Lee would then appoint a new board, which would still function independently. The governor could choose to retain some of the current board members, according to the bill.

Sen. Jon Lundberg, R-Bristol, has been part of the push for accountability and changes at TSU in recent years. On Wednesday, he told members of the press he had concerns about TSU's compliance with an ongoing forensic audit. On Friday, a TSU spokesperson fired back at that assertion.

"We are thoroughly disappointed by statements made to media outlets, the Nashville community, lawmakers, and most importantly the TSU family that imply the university has been unresponsive or slow to forensic audit requests," part of the statement read. "This is an unfortunate attempt to sway public opinion on pending, unwarranted legislation ... Any implication that TSU contributed to the delay of the completion of the forensic audit report is simply untrue."

The audit, which is being conducted by an outside firm, is examining financial records, transactions and processes at TSU, according to a spokesperson for the state comptroller. A university spokesperson maintained that TSU has complied with auditors and has met with them weekly to assure they are on track with their latest requests.

The Senate Government Operations committee considered the Republican-sponsored bill, SB1596/HB1739, on Wednesday. The two Democrats on the committee, along with a TSU board member and student trustee who testified, strongly objected to proceeding without the results of the audit and asked for the existing board to be given time to complete its work.

Sen. Charlane Oliver, D-Nashville, and Sen. Sara Kyle, D-Memphis, voted against advancing the bill. Still, the bill passed in a 7-2 vote.

Here's what to know about the current audit — which is one of five that involves TSU — and what's next for the proposed legislation.

Read more: Senate advances bill to vacate Tennessee State University board

Why are Tennessee lawmakers concerned about leadership at TSU?

In 2022, TSU's total enrollment jumped from by more 1,000 students to 9,000. During that time, many other historically Black universities and colleges nationwide also saw enrollments rise. However, TSU did not have enough on-campus housing for the influx of new students and needed an additional $7 million to lease hotels to house around 1,300 undergraduates, according to the comptroller's report.

Amid the enrollment boom, the school cited historic underfunding by the state as one of the reasons it could not keep up with demand and build or expand dormitories. The school also said the expensive Nashville real estate market caused upperclassmen to remain in university dorms, which also exacerbated housing issues.

State lawmakers expressed concern over the housing shortage, and the Tennessee comptroller's office conducted an audit. The audit, detailed in a special report released last February, revealed TSU was already facing a housing shortage when it launched an extensive enrollment campaign and quadrupled its scholarship budget for the 2022-23 school year. The budget for full-cost scholarships, which included guaranteed housing, increased from $6.4 million to $28.3 million.

The report, issued by Tennessee Comptroller Jason Mumpower, said the lack of housing and the increase in scholarships were examples of a general "lack of planning, management, and sound decision-making" at TSU.

Mumpower's recommendations included dissolving the TSU board and placing the school under the state Board of Regents, which oversees the state's community and technical colleges.

What triggered an outside audit of TSU?

After the audit released last February, state lawmakers moved not to dissolve TSU's board and instead gave them one year to address the problems highlighted in the comptroller's report. The legislature also approved $2 million for an outside audit of TSU.

Who is conducting the current audit?

The accounting firm CliftonLarsonAllen was hired to conduct the outside audit of TSU. The firm, also known as CLA, is one of the largest accounting and auditing firms in the United States with offices across the country, including one in Nashville. The audit launched on July 20, according to a spokesperson for the state comptroller.

When will the audit be complete?

The comptroller's office said it initially expected the audit to be complete by Dec. 15 but CLA now believes the it will be finished by the end of February. However, that timeline may be extended again, although the comptroller's office said that is not yet certain.

The audit process has been hindered, according to the comptroller's office, by the amount of time it has taken CLA to gain access to university systems, obtain documents, interpret data and receive answers to questions. TSU has repeatedly said it is complying fully with auditors.

In its statement released Friday, the university said it was also made aware by CLA that there would be additional requests coming past the Dec. 15 deadline.

How has TSU handled the audit?

TSU is undergoing five state audits at the same time, including a fiscal year 2022 audit and others that are regularly scheduled, according to the statement released Friday.

"The state provided $2.1 million for the forensic audit of the university but no provision for accounting staff to assist with the audits and the substantial added audit requests," the statement read. "TSU accounting staff worked 18 to 20 hours per day to meet all the requirements and fulfill all requests in a timely manner."

Over the last several months, the university has fulfilled more than 300 requests including 110,000 documents to submit for the forensic audit, according to the TSU statement. As of Friday, the university was still working to fulfill new requests.

"The assertion that TSU is the cause for the delay of a final report is a gross misrepresentation of the facts," the statement read.

Will the state legislature vacate TSU's board, even without audit results?

That is not yet clear, since there is not a set timeline for when the audit will be completed and results released. While the bill passed the Senate Government Operations Committee, there are still several more steps for the bill to pass the Senate. It must also go through several steps to pass the House and ultimately be sent to Lee to sign into law.

Sen. Kerry Roberts, R-Springfield, is the Senate sponsor of the bill. Rep. John Ragan, R-Oak Ridge, is sponsoring the bill in the House. The bill was awaiting further action in both the Senate and House as of Monday.

This article originally appeared on Nashville Tennessean: Tennessee State: University, state clash over ongoing audit