University Finances Reviewed by Legislature Auditors

Wednesday, Dec. 18, 1996 | 11:59 a.m.

The problems for the University of Nevada, Las Vegas began in October 1994 and were resolved two months ago, but university Regent Nancy Price questions how such mistakes occurred and why they lingered for two years.

"If indeed they were bank errors, it shouldn't have taken so long for the institutions to find the errors and get them straightened out," said Price, a frequent critic of the university system's financial practices.

Price commented prior to a meeting of the Legislature's Audit Subcommittee which has completed a $70,000 performance audit of the University and Community College System of Nevada.

Tom Anderes, the university system's vice chancellor for finance, said Tuesday that Bank of America officials were to discuss the problems that plagued the UNLV accounts.

Anderes blamed Bank of America and its subcontractor, North Carolina-based First Union Bank, for the glitches.

The first problem, which temporarily shortchanged UNLV accounts by $4.5 million, dates back to October 1994. The university system, which oversees the state's six universities and community colleges, was making deposits with First Union that were earmarked for UNLV but were ending up in accounts controlled by the University of Nevada, Reno, Anderes said.

It took bank officials months to discover they were punching in the wrong codes while distributing the system's dollars.

Once that discovery was made, the UNR money was redirected to UNLV. Those transactions were completed by January.

Since then, the banks have replaced a manual system with a computerized data-entry system.

The $4.5 million that made its way back to UNLV was not treated as a windfall because university officials had been counting on receiving the money earlier.

The second "banking error" was a $2.9 million check that was marked by the bank as outstanding from August 1995 to September 1996.

Money to cover the check, which paid for university salaries, was withdrawn from the university's accounts, Anderes said. However, that check had been reissued, and the bank failed to recognize money for the check had been withdrawn.

Anderes said UNLV officials alerted bankers the university did not have a $2.9 million outstanding check, which on paper created a shortfall.

Anderes added there never was a point during the two-year period in which money was missing from the university system.