UCF says additional millions misspent
Leaders last week admitted $38M went for new hall in error
The University of Central Florida used $10 million intended for operating expenses on construction and improvements to existing buildings, on top of the $38 million that leaders admitted last week was misspent on the new Trevor Colbourn Hall.
In addition, university leaders say they used nearly $3.8 million in operating funds on renovation projects that may have violated state rules. UCF President Dale Whittaker and Board of Trustees members met Thursday with an Atlanta attorney who will investigate the university’s use of state operating dollars on construction projects, including Trevor Colbourn Hall. The new building replaced an older, aging one with the same name.
Board of Trustees Chairman Marcos Marchena, who was on the university’s finance and facilities committee at the time the new Trevor Colbourn Hall was approved, told his colleagues he was “incensed” they were misled about the money used to build Colbourn Hall. “At no time did anyone on the staff give us any indication that the funding was from an unallowable source,” he said.
The problem with funding of Trevor Colbourn Hall came to
light last month when the auditor general’s office alerted UCF and the Board of Governors, which oversees the state university system.
Last week, Whittaker told the Board of Governors that former Chief Financial Officer Bill Merck had taken “full and immediate responsibility” for the decision to misuse state money. Whittaker told the board that the university would, among other things, hire a law firm to investigate how the problem occurred.
Whittaker, the university’s former provost, arrived on campus in 2014, about the time trustees started discussing plans to renovate the old Colbourn Hall. University employees later decided the facility was in such poor condition they needed to build a new one, and trustees agreed to raze it.
It’s the first major test for Whittaker, who succeeded longtime President John Hitt on July 1. Board of Governors members lambasted Whittaker and the university last week, saying the misuse of state funds could affect their ability to work with the Legislature on funding matters.
And the scrutiny has extended beyond UCF. On Wednesday, Board of Governors Chair Ned Lautenbach sent a letter to all of the state’s university presidents and board chairs asking them to review funding sources for all projects approved since July 1, 2008.
Marchena asked Whittaker, if, as provost, he had any inkling Merck was misusing money. Whittaker said he did not. “If I had, I would have stopped it,” he said.
While he and Merck did work together closely, Whittaker said he was focused on academic matters while Merck was responsible for making sure the funding for initiatives came from the right sources.
Merck apparently drew money from the wrong fund because of the old building was deteriorating and the university didn’t have enough money to replace it, university leaders said Thursday. He hasn’t responded to phone calls and emails from the Orlando Sentinel seeking comment.
Whittaker and Marchena said they’re not aware of anyone else who knew the university was using money from the wrong source to build Trevor Colbourn Hall, but the law firm’s investigation should determine whether others were involved.
“I think it is difficult for me to believe that only one person was aware that we were using inappropriate funds for those projects,” Marchena said.
If the investigation reveals others knowingly broke state rules or deceived trustees, Whittaker said they’ll be dismissed from the university.
Heading the probe is Joseph Burby of the Bryan Cave Leighton Paisner law firm. The university will pay $550 per hour for his services.
Burby and his colleagues will interview UCF employees who were involved in the construction of Trevor Colbourn Hall and other projects. University leaders have urged them to expedite their review, though Burby said Thursday he doesn’t know how long it will take.
For now, the university will set up a public website with information and documents from the investigation and the attorneys’ contact information so people can reach them with tips.
The new Trevor Colbourn Hall, which opened last month, is an academic building that houses classrooms, offices and study areas. It replaces an adjacent 40-year-old facility with the same name. The old Colbourn Hall is set to be razed.
In addition to the new Trevor Colbourn Hall, Whittaker said the university had misused money from the education and general fund, which is designated for operating expenses, on three smaller projects totaling about $10 million during the past five years.
That included adding new furniture, fixtures and equipment as well as building labs in the Research 1 facility for $7.5 million. The university also used the same funds to construct a new band building and a facilities surplus showroom and postal hub.
That source can also be spent on renovations or maintenance to existing facilities of less than $2 million. The university used a total of $3.7 million on renovations or improvements to five buildings during the past five years. While the amount of education and general fund money spent on any one of those individual projects didn’t exceed $2 million, the total cost of those projects did. Therefore, use of those funds may have been improper, said university leaders, who described it as a “gray area.”
The university will pull a total of $13.8 million from other sources, including flexible accounts for the College of Arts and Humanities, WUCF TV and the English Language Institute to replace money that was or may have been misspent from the education and general fund account.