BOG seeks increased accountability

The UNC system's governing body is expected to approve a measure today that would require chancellors to sign a document at the start of the academic year to ensure accountability for their campus' financial statements.

Leaders at all 16 system schools would pledge that all money donated by outside foundations to the universities will be included in financial reports.

The decision by the Board of Governors' budget and finance committee comes after N.C. State Auditor Ralph Campbell reported in early October that officials at the N.C. School of the Arts had misallocated more than $1 million in university funds.

NCSA now is in a 90-day probation period, during which it must prove to the BOG that it has remedied its problems. For now, many system officials are leading the school's financial divisions.

Jeff Davies, UNC-system vice president for finance, is overseeing the financial department at NCSA, and UNC-system President Molly Broad said Davies likely will remain there beyond the 90-day period.

The school officially will retain its management flexibility, but George Burnette, UNC-system associate vice president for finance, will serve as the chief financial adviser.

Although the committee decided not to cut NCSA's funding - an action it feared would harm the school - members have set certain rules to clean up the situation and ensure that it does not reoccur.

Broad also proposed the creation of a task force that would develop a way for at least some members of the Board of Governors to look over the annual finance reports from the chancellors.

"This board, perhaps, is not receiving the information it needs," she said.

Still, she added that she has no doubt that NCSA has made the necessary changes to clean up its budget, including replacing officials involved in the situation and cooperating with the requests of the BOG and state auditor.

In light of the incident at NCSA, the committee further discussed a need to pay close attention to the way individual campuses are spending money.

Panel members voted to clarify the language in the system's lease policy, which allows universities to execute leases and spend money without first going to the BOG. The change would state who specifically has that power.

Board member Gladys Robinson expressed her concerns about the appropriations of funds to ensure that students are receiving a "full quality of education."

She said she wants to make sure the money set aside to pay a teacher who quits still is used to benefit students.

There are about 983 vacant positions in the system each year, and those unused salaries are used to compensate for budget shortfalls.

Board members voted in committee Thursday to ensure that the BOG is able to evaluate the uses of this money.

"We have to make sure it's being spent where it should be," said board member Steve Bowden.

Contact the State & National Editor at stntdesk@unc.edu.