State Comptroller audit details the financial challenges Tennessee State University’s new leadership must tackle

Interim TSU President Dwayne Tucker (Photo by LEAD Public Schools)

A new audit by the Tennessee Comptroller’s Office details just how big of a challenge interim Tennessee State University President (TSU) Dwayne Tucker will have turning the university’s financial condition around.

Tucker took over leadership duties at TSU last December after leading the growth of Nashville charter operator LEAD Public Schools for more than six years. Yesterday, LEAD announced that Tucker has decided to continue the turnaround at TSU and not return to LEAD for the coming school year.  

According to the Comptroller’s audit, Tucker is inheriting a university that ended the 2022/23 fiscal year in June 2023 with an operating revenue loss of more than $128 million. The Comptroller is currently working on a 2023/2024 audit of TSU.

Auditors listed 15 separate findings of financial mismanagement in the 160-page report, including failing to properly charge students fees for some courses during the 2022/23 fiscal year, inadequate collection practices, reporting violations, and leadership deficiencies under former TSU President Dr. Glenda Glover’s administration. Most of these findings were continuations from deficiencies noted in prior audits of the university.

“Tennessee State University management lacks appropriate oversight, allowing a breakdown of controls that created an error-prone environment that has resulted in errors in the financial statements, inadequate daily operations, and deficiencies in oversight of federal programs, which contributed to subsequent cash flow deficits,” wrote auditors.

The Comptroller’s audit did not review financial changes that have been made by Tucker’s administration or prior interim TSU President Ronald Johnson, who resigned in December.

Last August, the state advanced TSU $11 million in revenue it wouldn’t normally receive until this year to help with budget shortfalls. Tennessee then provided TSU with another $32 million in Coronavirus State and Local Fiscal Recovery Funds (SLFRF) in November.

TSU leadership provided a brief overview in the Comptroller’s audit of the additional “corrective measures” they’ve implemented to address the ongoing financial management concerns. These include hiring a dedicated collection manager and dropping students who do not meet their payment deadlines from their classes, along with new training for staff and hiring a third-party consultant.

“We have already initiated or are planning to implement a range of corrective measures in consultation with external third-party consultants and organizations. These include but are not limited to strengthening governance structures and processes to ensure effective oversight and accountability, enhancing our internal control systems, developing/updating policies and procedures, investing in the training of our accounting staff, hiring qualified and experienced personnel for key positions, and implementing improvements to the financial system,” wrote TSU. “Through these comprehensive initiatives, our overarching goal is to restore and enhance the integrity of our financial systems and operational processes.”