UConn wasted state money

Connecticut state auditors just completed an audit of the university's financial records and the conclusions of the report suggest the university engaged in inappropriate, negligent and even illegal spending of state funds. UConn should know better.

The most serious violations are part of UConn's capital budget. The abuses in spending are further worsened by the fact over 100 building and fire code violations were found in three recent construction projects. Furthermore, State Police are investigating contractors UConn decided to hire under UCONN2000. All the violations point to corruption and fiscal mismanagement by both the contractors and university.

Aside from the possibly illegal activities of the contractors the university decided to hire, the university has its own financial mismanagements. When the state of Connecticut gave the university an unprecedented amount of freedom over the capital budget, the state wanted UConn to have flexibility in project decisions. However, flexibility over how to spend funds does not mean the university is authorized to violate state law or to establish inappropriate bid processes that raise costs to the state.

According to the recently released report, auditors found the following. First, no evidence was found regarding how UConn selected companies for construction contracts. Second, the university lacked clearly established budgets for the projects. Third, the university lacks a standardized record keeping system. Fourth, UConn selected contractors before project details were finalized. Fifth, the auditors deemed the building of Husky Village as a violation of state statute. Sixth, the university used procedures resulting in higher costs being incurred to the state of Connecticut.

The Husky Village was financed by bonded money under UCONN2000 at a cost of $12 million. State statutes explicitly assert that if a project is not on the original list of construction projects, the university must seek approval from the Board of Trustees as well as a public act approving the addition. The law allows the university to modify proposals without approval.

Husky Village was not on the original project list. Rather than seek state approval, the university skirted state law and included the project as part of the Towers Renovation. It is important to note that under no condition is including the Husky Village in the Towers Renovation an appropriate condition. The Husky Village project is 100 yards away, has received a name separate from Towers and was the construction of a new site (not a renovation). The conclusion - the university attempted to skirt around state law by including the project in an already existing project.

The state gave UConn the flexibility to modify projects. The legislature never intended to allow project modifications as a way for the university to escape the established system of financial checks and balances. The reality is UCONN2000 funds were publicly bonded and the legislature has the final authority over the appropriations. UConn's blatant disregard for this authority is shocking.

Regarding the flaws to the procurement procedures, the auditors found the university initially followed stringent guidelines. However, over time the selection process become non-standardized and UConn failed to establish new procedures. This resulted in firms not establishing budgets and the university having no record of why firms were selected for contracts. The result was non-standardized practices increased the risk contractors did not follow university wishes.

Even more serious is the university's blatant disregard to ensuring competition in the bid process. The result - UConn made the state pay higher costs than had the university used a competitive bid process. UConn operated under a procurement method called "Construction Manager at Risk with a Guaranteed Maximum Price." Such a bid process involved contracting at a cost-plus basis and selecting a contractor before project details were finalized. UConn disagrees that the non-competitive bid is bad for the school.

Unfortunately, the unusual procurement process did result in the state incurring higher than necessary costs. After reading the auditors report, it is clear a lack of competition has much greater drawbacks than benefits. When awarding 21st Century UConn contracts, the university should heed the advice of auditors. Competition is essential to reducing price. Furthermore, the university should not select contractors until the final details of a plan are known.

UConn's being awarded the bonded money from the state does not authorize loose spending and without regard to price. Even state agencies are accountable to values of cost-minimization for the given quality being received. By no means does this suggest low-bid contracting. In UConn's case, the non-competitive process resulted in the state over-spending for what they received. Taxpayers of the state of Connecticut deserve better.

Even with the higher costs, UConn received inferior projects with building code violations. A competitive bid process would have lowered prices while ensuring a better quality project. Had the university spent more money under a competitive process, at least the university would have received a better quality result from the project.

The audit also analyzes other financial records at the university. At one point, the report concludes, "State funds were handled in an illegal, irregular or unsafe manner." However, these other violations are not quite as serious as the UCONN2000 violations mentioned previously.

Why is all this important? With UConn receiving another billion dollars of bonded money from the state, the university must become organized and reform - UConn cannot allow these mistakes to happen again. University administrators are accountable for these illegal and sketchy financial dealings. The chain of command goes all the way to President Philip Austin.

For this reason, Austin should launch a full internal investigation of the university procedures followed under UCONN2000. University employees must be held accountable and placed on leave if necessary.

UConn broke the law, paid excessively high costs and received completed projects with major flaws. UConn has now found $15 million to renovate bad construction projects for which they are partially responsible and found $1 million to build the president a hot tub in his renovated house. Yet, the administration cannot find the money to "buy down" tuition and support a tuition freeze.

The taxpayers of the state of Connecticut deserve better. Students deserve better.