McGuiness, University of Delaware spar over audit, with lawmakers planning to step in

DOVER — Should the state auditor be able to force the University of Delaware to open its books to her? Depends who you ask.

As the issue of whether Auditor Kathy McGuiness can conduct a performance audit on the state’s flagship educational institution continues to linger, the legislature’s budget-writing committee said this week it intends to send a letter requesting the university allow itself to be examined financially by the state.

While Ms. McGuiness is in the middle of an audit on the use of state purchasing cards by Delaware State University, UD has declined to participate. In the eyes of the institution, that’s entirely within its right. But to some state officials, the university is ignoring state law and biting the hand that feeds it.

“Everyone has to be held to the same … standards,” Ms. McGuiness said Wednesday.

The subject was batted around last week during the university’s budget hearing, with Joint Finance Committee members questioning why it is immune to the provisions DSU and Delaware Technical Community College are subject to.

Auditor Kathy McGuiness

While Ms. McGuiness said she believes UD refused a mandatory request, a university spokeswoman characterized it differently.

State law says the auditor has the authority to examine the financial records for “every department, bureau, division, officer, board or commission of the State,” but it also confers special privileges upon the university. The institution’s charter says the state “may” audit the university — but only state funds — and requires UD to publish an audit annually.

For years, the university has been audited every year by the outside firm KPMG with few issues, according to UD officials.

“There is no parameter that the state auditor solely and exclusively audits UD’s state dollars,” John Long, the university’s executive vice president and chief operating officer, told JFC last week.

According to Mr. Long, the institution and the state must agree on who will conduct the audit.

UD’s website calls it a “state-assisted yet privately governed” school, which has its roots in the institution’s charter. Delaware State, in contrast, has a slightly different status, according to officials.

In a 2017 letter to the state Senate’s top member, UD’s president and chairman of its board of trustees described the institution as a “state partner” rather than a state agency.

DSU has embraced the agency label in some regards.

The University of Delaware was founded in colonial days, while the Dover institution began in the 1800s as a historically black school. UD not only receives several times more in state funding, it also has a much larger endowment than DSU.

Asked if she felt the University of Delaware had made a strong argument against her plan to hold a performance audit of purchasing cards, Ms. McGuiness asked simply if an audit request by the Internal Revenue Service can be ignored.

Ms. McGuiness, who was elected in 2018, is hopeful the letter being drafted by JFC will “encourage” the University of Delaware to open its books for a performance audit. It likely will not be on purchasing cards, however, as that opportunity has now passed, Ms. McGuiness said.

Although work continues on the DSU audit, the results of the purchasing card examination for DelTech were released Wednesday, with no apparent discrepancies.

Ms. McGuiness said she originally intended to unveil the two audits together but had to push back the date for Delaware State because that audit is not complete.

The findings for DSU are not expected until at least March.