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Highlands budget problems blamed on software

Source: The Santa Fe New Mexican Publication date: 2000-06-15

Payroll for university was underestimated by $700,000 New Mexico Highlands University may have overspent its budget, but officials say they won't know how much money they might be short until they close out the books at the end of the month.

Several factors caused what board of regents member John Loehr described as a "cash-flow crunch" at the Las Vegas, N.M., college, which has a $70 million operating budget, more than 100 full-time faculty and 1,700 students on its main campus.

University officials cited the conversion to a new administrative software system; a glitch in a software application in the new system that underestimated payroll by $700,000; the Athletic Department overspending its football-program budget by a substantial "six- figure" sum during the past two years; and a bookkeeping error that showed the university having $1 million in state bond money that in fact had not been appropriated to the college.

"Someone wasn't minding the books sufficiently," Loehr said. "There is no theft, there is no fraud, there is no lost money here. This is a bookkeeping problem. My hope is that we'll be able to put in place very quickly procedures and processes that will avoid a repetition of the problem."

Loehr said the problem stemmed from "managerial inattention." But he said regents have not considered "any kind of reprimand or chastisement" of university president Selimo Rael.

"But obviously we are concerned," Loehr said. "We want to get this problem identified and solved as quickly as possible."

Rael ackowledged Wednesday that the university apparently will have a spending overrun, "the magnitude of which I can't tell you at this point."

Rael said he doesn't intend to cut staff or faculty.

Getting staff members up to speed on how to use the new software system affected the college's ability "to evaluate and access our (financial) data in a timely manner," said Anne Clancy, director of university relations.

Earlier this year, in the midst of the software changeover that university officials say taxed employees' time and energy, payroll manager Donna Castro resigned, and the remaining two employees in the payroll department followed suit. The university had lost its comptroller a month-and-a-half before Castro quit in March.

The payroll department resignations were additional factors in the "deterioration of the quality of information available for managing the university," Rael said.

Rael said he accepts responsibility for the financial mess, no matter what its source. He said the software conversion started last July and is nearly complete.

Rael has been meeting with the regents' Budget and Finance Committee to resolve the budget problem. Another meeting is scheduled Friday morning.

"Appropriate steps will be taken to address all the issues," Rael said. "Fixes will be implemented immediately," he said, and "all expenditures will be controlled very carefully."

He also said all vendors and university employees have been paid "and will continue to be paid," Rael said.

Peter Bickley, chairman of Highlands' board of regents and its two- member Budget and Finance Committee, said that if necessary the university might consider "moving some funds from other accounts" to temporarily cover payroll and other expenses to solve its short-term cash-flow problems during the summer.

Longer term, Bickley said, the university might have to reduce expenses during the next fiscal year.

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-- (Dee360Degree@aol.com), June 16, 2000