An audit by the Office of the Utah Legislative Auditor General recommends requiring the Utah System of Higher Education to create an employee tracking system, make sure budget requests reflect actual expenditures and report position vacancies to the Office of the Legislative Fiscal Analyst.

Currently, institutions of higher education often have money allotted for positions that won't be filled within the fiscal year because hiring faculty members often can take longer than a year.

However, those positions must stay open in order to receive the annual bump given to keep up with inflation, said Paul Brinkman, University of Utah associate vice president for budget and planning.

"We're erring on the safe side. We have to budget for the people we have or think we'll have," he said.

However, the audit states that institutions have an incentive to keep permanently vacant positions in the budget because it provides them with more money for nonpersonnel costs, and no one knows for certain which costs are being covered.

"What we're after is trying to mirror actual expenditures more," audit manager Tim Osterstock said. "It's not a reduction in funding, but if you're asking for funds, we want to make sure the budget reflects actual need and actual spending."

Commissioner of Higher Education Richard Kendell agrees transparency is needed.

He concurs with the audit recommendations, including developing a better tracking system for personnel who are hired or leave a college or university, identifying permanently vacant positions and adjusting the budget to stop funding them.

However, in a letter to the legislative auditor general, Kendell argues in favor of leaving most vacant positions budgeted because of the potential "loss of purchasing power" created by the lag time in hiring many faculty and staff members.

"Even if nonpersonnel services were to be fully funded, personnel budgets would continue to exceed actual expenditures," he said in his letter. "Managers would continue to attempt to maintain their ability to hire good employees in the face of rising salaries."

The change in reporting could foster new practices in the future, but that will be up to legislators and higher education officials, Osterstock said.

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* SHEENA MCFARLAND can be contacted at smcfarland@sltrib.com or 801-257-8619.

Audit recommendations

* Change forms to clarify where money is spent

* Develop an employee tracking system

* Align budget requests with actual expenditures

* Identify and remove permanent employee vacancies from the budget

* Report open vacancies to the Office of the Legislative Fiscal Analyst