SC audit council defers request to review Winthrop finances

The Legislative Audit Council does not have enough auditors to fulfill a York County lawmaker’s request for a financial review of Winthrop University, agency officials said on Thursday.

State Rep. John King’s audit request was put on hold, along with similar requests for S.C. State University and the University of South Carolina. Officials did not give a timeline of when the requests may be reconsidered.

The audit council’s governing board met Thursday to consider audit requests, including the Winthrop audit proposed by King, D-Rock Hill, and six other lawmakers. Winthrop is located in King’s House district.

King told The Herald late last month that he asked for the audit because he’s concerned Winthrop has been using its reserve money for some expenses. School officials responded by sending a letter to campus employees saying the university is in good financial health. Winthrop representatives also met with King after he requested the audit.

Winthrop’s Acting President, Debra Boyd, told The Herald that the university isn’t using reserve or savings money to balance its budget year-to-year. She said reserve money has been used in the past to pay for specific needs and that the money was not used for day-to-day expenses, such as salaries.

On Thursday after the audit council meeting, Boyd said in an email to campus employees that the school’s reserves have been stable in recent years, which “speaks to the integrity of our finances.”

Winthrop officials did not attend Thursday’s meeting. Neither did S.C. State or USC representatives.

Since King’s request for the audit, the university contacted all state lawmakers from York County to offer any information about the school’s spending, said Jeff Perez, Winthrop spokesman. Lawmakers, Perez said, did not request any information from or raise any concerns to his office.

Legislative Audit Council board members on Thursday afternoon briefly discussed King’s request but did not vote on whether to perform a financial audit at the school. Legislative Audit Council Director Earle Powell told the group that his staff of 13 auditors is not large enough to take on more work at this time.

Powell says his office has requested state funding to hire more auditors, and he hopes that request will be approved by lawmakers.

Each audit requires two to four Legislative Audit Council employees, such as attorneys, accountants and public policy experts. From the time an audit begins, it can take around one year to complete the review and publish any findings.

South Carolina’s audit council plays an oversight role that helps state lawmakers decide whether public agencies are lawfully and efficiently using tax dollars and whether state-funded programs are effective.

Audit requests of five state agencies are currently pending. That queue includes Winthrop, S.C. State, USC’s small business development center, and the John de la Howe School in McCormick.

A request for an audit of the S.C. Department of Revenue – related to the mass security breach in 2012 that compromised more than 3 million taxpayers’ Social Security numbers – is also pending.

Performance audits of the S.C. Department of Transportation and Department of Mental Health will start soon, Powell said. Both of those requests came from oversight committees in the General Assembly. Those directives from legislative committees take precedence over requests signed by individual lawmakers – such as those for Winthrop, USC, and S.C. State.

Boyd: Winthrop has cut spending

State auditors last did a performance review at Winthrop in the mid-1990s.

Legislative Audit Council records show that the most recent audit for a public college in the state was in 2011. Then, auditors probed Clemson University’s Public Service Activities and a construction project at S.C. State.

Records also show that, during the past three decades, the Legislative Audit Council has reviewed eight schools: the College of Charleston in 1986, Francis Marion in 1998, the Medical University of South Carolina in 1999, Trident Technical College in 1994, and USC and its nonprofit foundations in 1989.

If the audit council chooses to again review Winthrop’s finances, school officials have said they would fully cooperate with the process.

The university, Boyd said, has been diligent in dealing with recent challenges – namely an economic recession that prompted South Carolina lawmakers to permanently reduce the amount of state tax dollars Winthrop receives. The state appropriation cuts have also impacted every public college in South Carolina.

Those cuts “occurred at the same time that higher education was becoming more competitive than ever,” Boyd said.

S.C. Commission on Higher Education statistics show that Winthrop’s enrollment – currently at nearly 6,100 students – has trended downward since 2003. The agency’s analysis of student enrollment at other four-year public schools across the state show that almost every other institution has grown during the past decade. Exceptions are Winthrop, Lander University, S.C. State, and USC-Aiken.

Winthrop officials have said they are developing long-term strategies to grow the school’s enrollment over the next few years. The campus has the capacity to hold an additional 1,000 students, officials have estimated.

With recent state cuts and stagnant enrollment, Winthrop is “making up the difference with a combination of spending cuts, program reductions, and tuition revenue,” Boyd said. She noted that the university’s tuition increase last year was the lowest in 14 years.

The Board of Trustees will set the upcoming academic year’s tuition rates in June.

School leaders, Boyd said, know they cannot rely on large tuition increases and are instead looking to build revenue by bringing in more students and retaining a higher number of current students.

Over recent weeks, “the possibility of a legislative audit has been a distraction” for some Winthrop faculty and staff members, Boyd said.

She added: “We can now put those concerns behind us and focus on bolstering Winthrop’s excellent reputation by continuing to provide our students with a learning and living experience that is second to none.”

This story was originally published April 16, 2015 at 5:43 PM with the headline "SC audit council defers request to review Winthrop finances."