Letter: Audit puts UNM’s Accreditation at Risk

By Daniel Libit

The fallout from the financial scandals involving the University of New Mexico’s Athletics Department continues to cast a pall over the school.

A national organization in charge of accrediting universities has now notified UNM that its regional accreditation status is in potential jeopardy, pending the findings of a state audit into the school’s fiscal management.

The Higher Learning Commission sent a letter to UNM President Chaouki Abdallah on Tuesday, informing him that it had been made aware of the special audit being conducted by New Mexico State Auditor Tim Keller.

The HLC letter stated that Keller’s investigation and various media reports about the accounting practices of Lobo Athletics had raised “concerns about the university’s financial oversight,” and could affect the school’s accreditation.

The letter was described to NMFishbowl.com by two sources familiar with its contents. UNM did not respond Tuesday night to a request for comment sent to a university spokesperson. (We will update if and when UNM responds.)

The HLC said it had originally been informed about Keller’s audit by the New Mexico Department of Higher Education, and that it was led to believe state investigators were now looking into accounting issues beyond athletics.

On its website, the HLC explicitly cites financial “integrity” as one of the core components necessary for a university to be reaccredited.

The commission requested that UNM provide a written response by September 14, which includes a summary of the special audit, an overview of all actions underway by state officials, as well as any corrective measures being undertaken by the university.

UNM has previously drawn scrutiny from the Higher Learning Commission, which has been responsible for accrediting UNM as a post-secondary education institution since 1922.

UNM’s last accreditation review, in 2009, occurred amidst a Faculty Senate no-confidence vote against former Board of Regent President Jamie Koch, ex-UNM President David Schmidley, and David Harris, the school’s executive vice president and chief financial officer.  In its review, the HLC observed that UNM was, “in the midst of a near complete break down in trust between the faculty and staff and the President.” The commission noted that UNM had seen a revolving door of six presidents and seven provosts in the decade preceding the review. It further reported:

“There are two fundamental issues germane to the sustained effectiveness of the university and its administration. The first is that the Board of Regents should operate within the constitutional and statutory authority without intruding upon—or appearing to intrude upon—university operations. … The second is that academic interests, represented by the office of the provost, should guide financial decisions—as opposed to allowing financial decisions to drive academic decisions.”

In response to its findings, HLC requested that UNM submit a “monitoring report” that addressed improvements to its governance and administrative structures. The school furnished that report in 2011, outlining six initiatives it had undertaken to address the commission’s concerns. To the surprise of some at the university, the HLC fully accepted the report and requested no further actions be taken until UNM’s next comprehensive evaluation, which will take place during the 2018-2019 academic year.

The HLC has previously announced that UNM’s accreditation site visit is scheduled for March 4-5, 2019. The letter sent Tuesday is not part of the normal 10-year reaffirmation process.

Keller recently said that his office’s audit should conclude by early fall. New Mexico Attorney General Hector Balderas is conducting a parallel inquiry into the finances of UNM Athletics. Balderas’ investigation is likely to pick up after Keller’s audit report comes out.

Yvonne Otts, the Lobos’ director of business operations, submitted her resignation last week, two months after former Athletic Director Paul Krebs was forced to do the same. Earlier this month, interim Athletic Director Janice Ruggiero faced tough questions from the school’s regents over the convolution of the department’s various revenue streams.

UPDATE: On Wednesday, UNM provided the following statement to the Albuquerque Journal:

“While it is not uncommon for HLC to request additional information as part of the lengthy accreditation process, UNM considers a response to this request to be of utmost importance to clarify that the University is financially sound, as shown by all recent independent University-wide audits, and to alleviate any concerns.”

KRQE posted a copy of HLC’s letter here.

(Lead image by cmh2315fl/flickr)