FAMU Battles Financial Woes

Institution rattled by operational audit and rumors of state funding cuts

Settling into a new job is hard enough, but Florida Agricultural & Mechanical University President James Ammons, who began on July 2, is also contending with negative publicity about financial misdeeds at the school. An operational audit published by the Florida auditor general found that of the school’s $394.6 million annual budget, more than $39 million was unaccounted for or improperly recorded. The news solicited legislative concern for the 119-year-old historically black public university.

In response, the Florida Board of Governors created the Task Force on FAMU Finance and Operational Control Issues. The legislature approved a $1 million appropriation ($2 million less than the task force requested) to help fix FAMU’s finances. “We are working really hard with the task force to put all of the appropriate personnel in place to restore the accountability and fiscal integrity of FAMU,” says Ammons.

The audit concluded that “significant turnover in key positions and understaffing of certain areas of the University’s business operations may have contributed to the need to use consultants in preparing the financial statements.” According to the audit, the university’s consulting services costs increased from $874,362 for the 2002—03 fiscal year to $10.2 million for the 2005—06 fiscal year, including $670,341 paid to consulting services related to its financial aid office and $1.9 million for accounting and administrative services.

The audit was compounded by earlier news that improper financial reporting at the university created a cash flow shortfall that led to late payments for more than 600 workers at FAMU between May 2006 and February 2007. Some student workers, adjunct faculty, and staff went months before being recompensed. “We will be faced with determining what program of work is realistic given the limited amount of appropriations,” says Lynn Pappas, chair of the FAMU task force.

Contrary to numerous media reports, the Florida legislature has not voted to deny funding to the school nor has a criminal investigation been sought, says Sen. Alfred Lawson. Alums Castell Bryant, the former interim president, and Lawson agree that the legislature would not stop funding the state’s third-oldest institution for higher learning. “FAMU annually generates a $3.7 billion financial impact on the state of Florida,” says Bryant.

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