University of Central Florida misappropriated $100m in state funds

The University of Central Florida (UCF) improperly used nearly US$100 million dollars of state money on construction and other projects to improve the campus, despite the funds being designated for research and student support.

The full-scale of the misappropriation was uncovered on Thursday after an external investigation into the years-long scandal presented its findings to the university’s board of governors.

The first inkling of a violation was uncovered in August, when an audit found that Central Florida had misappropriated US$38 million of restricted taxpayer money for the construction of a new building.

The Trevor Colbourn Hall, a replacement for the aging Coulbourn Hall, was built using state operating funds in direct violation of state policy and law that restricts that funding to activities like instruction, research, libraries, student services or maintenance.

Five people lost their jobs over the incident, one of whom was the university’s former Chief Financial Officer, Bill Merck.

At the time, Merck complained that the rules around how that state money could be spent were not clear.

“There was confusion about [whether or not carry-forward funds could be used for capital projects] among my colleagues as well as the folks on my staff,” Merck told WMFE.

Five people lost their jobs, but “I was the villain in the piece from the beginning.”

A report from the House Ethics Public Integrity Chair Tom Leek showed the university’s state operating fund budgets listed the construction spending under deferred maintenance and general expenditures.

Additionally, the report states administrators didn’t inform the UCF board of trustees of where the money for those projects was coming from.

A January investigation found the university had improperly transferred US$85 million to capital accounts between 2013 and 2018.

But the latest figure shows additional amounts of leftover funding was misused by the university. The full-scale and the reasons behind the confusion may never be fully known, however, as key players in the incident are refusing to cooperate with investigators.

“To be brutally honest, it‘s going to be difficult to understand why these decisions were made when the people who were in the room will not speak to us and we have no ability to compel them to speak to us,” Lead investigator Joey Burby told members of the Board of Governors during a meeting in Tampa. He stressed the findings are preliminary and subject to change, according to Orlando Sentinel.

Among those failing to assist the investigation are former presidents John Hitt and Dale Whittaker, both of whom are no longer with the university.

For the most recent review, Burby and his team looked at construction projects valued at more than US$2 million going back to 2010, uncovering US$16.1 million for three projects that was transferred in 2012. The university also transferred more money than had been originally reported for a fourth project between 2014 and 2016.

Work on the investigation is still underway, with Burby carrying out a deep dive into each project to get a clearer picture as to who was involved in each decision and how this was allowed to happen.