Texas State University System: Untangling the Books
When the Texas State University System (TSUS) decided to closely study its existing privatized housing arrangements at three campuses in 2005, it faced a tangled and complex set of financial transactions.
“It was almost impossible to tell what was going on,” said Roland Smith, vice chancellor for finance at TSUS.
Because transactions were recorded on the private organization's books, unwinding all the details took diligence and time.
But the effort to get to the bottom of the issue paid off, leading TSUS to take a new direction in how the new dormitories would be operated and financed by issuing its own bonds to purchase the existing debt. Each campus now services debt and records dormitory transactions within its operating structure, and TSUS tracks and manages debt transactions on its own set of books.
The results: lower debt service costs, lower operating costs, transparency of construction activities, and simpler programmatic processes. All of these benefits allowed campuses to hold costs down for dorm residents.
Smith credits the leadership of TSUS Chancellor Charles R. Matthews in initiating the effort to shine a brighter light on the books, which he said was a direct result of the statewide transparency initiative launched by Comptroller Combs.
“Each institution is unique, but operations based on such complex transactions probably can be improved,” Smith said.