A state audit of UConn’s operations determined that the $1 billion higher education system is paying too much interest in a three-year-old loan and needs to develop a written plan for awarding bonuses to employees.
Among state auditors’ recommendations, following their review of fiscal years 2012 and 2013:
UConn should ask the legislature to authorize a refinancing of a $203 million loan taken in late 2012 from TIAA-CREF. With an interest rate of 4.8 percent, the loan will result in total interest payments of $158.6 million, auditors said.
A standard bond issuance could save UConn nearly $76.8 million over the life of the loan, auditors estimated.
Auditors also said UConn needs a written plan for awarding performance-based bonuses.
UConn could not provide any documentation justifying a total of $93,268 in bonuses awarded to six employees of its finance and budget division. UConn said the payments were awarded to employees who were not compensated for additional hours spent implementing a new financial software system called Kuali.
Auditors said the lack of a structured plan gave the impression that the raises were arbitrary or subjective. UConn responded that it would develop a formal plan in the future, should it decide to award performance-based pay for completion of major projects.
Correction: The original version of this story misstated the amounts of interest UConn is paying under a 2012 loan and the amount auditors said it could save though a bond refinancing.Â
