$20 million over budget? Audit says that happens regularly with new buildings at Utah’s colleges.
(Rick Egan | The Salt Lake Tribune) Jon M. Huntsman Hall, an expansion of the Jon M. Huntsman School of Business, shown in 2016.
The state board charged with vetting new building proposals from Utah’s colleges regularly moves them forward for approval without question — resulting in some facilities that are too small and others that come in millions of dollars over budget, according to a critical audit released Tuesday.
That superficial review comes at the point in the construction process that could most use the scrutiny, the new report from the Office of the Legislative Auditor General said
. Instead, the loose oversight has left projects largely unregulated, potentially breaking the law and regularly wasting taxpayer money.
“The effect of this is very large,” audit manager Ben Buys told lawmakers at a Tuesday meeting.
The State Building Board
, which makes recommendations to state lawmakers about which projects should be prioritized across the state, often bases its decisions for higher education buildings on little information, auditors found. Sometimes the board’s members accept inflated or outdated enrollment numbers. And frequently the buildings have to be expanded beyond what was originally proposed.
The 2016 addition to the business school was first proposed at 100,000 square feet. When it was done, the space was almost 50,000 square feet bigger — a 50% increase above what the State Building Board checked off and the Legislature approved.
It cost $19.7 million more, too, to create that extra space. And while that was funded by private donors, increasing the size of buildings creates an ongoing problem because the estimated annual operating costs also go up.
Huntsman Hall was expected to require roughly $700,000 for yearly operations and management. With the expansion, it now requires nearly $1.2 million. And the extra expense typically comes out of a school’s budget, taking away from other future buildings or projects. USU could not immediately specify how those Huntsman Hall operating expenses are covered, a spokesman said.
“The majority of the changes were driven by USU’s desire for a larger, nicer building,” the audit said.
The building also has one of the worst rankings based on its amount of useable space, compared to all recently constructed campus projects at Utah’s eight public colleges. Only 40% of Huntsman Hall includes classrooms or laboratories or offices. By comparison, the building for the Utah State Tax Commission has 65% useable space. (The rest consists of features such as hallways and air ducts.)
The audit blames the State Building Board
for not requiring more information when schools submit applications — and for being lax in approving them despite what little they do require.
Some of the parameters that board members use were created as long ago as 1988. And there are no penalties for schools that make mistakes on their applications or misspend taxpayer money on buildings that can’t fit as many students as planned. Most proposals are approved without much analysis or concern.
The process for the board is set out in state statute, but has been largely ignored and members are “not collecting, vetting or reporting building proposal information as directed,” the auditors allege. That, they conclude, is illegal.
Jeff Reddoor, director of the board, responded to the audit Tuesday during a legislative hearing. He said the board’s resources are limited but ultimately agreed with the recommended fixes.
“We’ve been concerned about rising building costs for the last 10 years,” he said. “But so often an agency would like a new, shiny building.”
One school, the audit said, never mentioned in its application that it was setting aside 9,800 square feet in a new building for the university president and administration to use. Dixie State University in southern Utah proposed a $45 million science building but never said why it was needed or how many students would use it.
But, the audit suggested, it’s not the schools’ fault. Administrators there weren’t asked to give the information.
In fact, most of the applications don’t state exactly how many students a new building will serve. The audit found that most of the materials submitted by colleges included the entire population of the university — including online students. And the building board didn’t require anything more specific.
For Weber State, in particular, that can create a highly inflated number. Roughly half of the students there take classes online — so using a total enrollment number inaccurately reflects how many are on campus, the audit reported. Additionally, even fewer students would use a particular building for science or business.
Buys, the auditor, said it becomes a difference of several buildings.
“If enrollment numbers include students who do not need physical buildings to receive instruction, new buildings could be approved for campuses that do not need them,” the audit stated.
The report recommended that schools provide the number of student in the particular department for the building, as well as how that number is growing, to show the need. It also called for a cost by square foot analysis.
Sen. Karen Mayne, D-West Valley City, said that data would better prevent manipulation and put all schools on equal grounds for requesting new buildings. “That needs to be in the mix,” she said. “We need to ask more questions.”
There is currently “no incentive to decrease cost,” added Senate Majority Leader Evan Vickers, R-Cedar City. His hope, he said, is that the audit — as well as a bill passed last session on the topic — will spur meaningful change.
Earlier this year, the Legislature changed the process for approving higher education buildings and funding
. Up until now, colleges competed with all state agencies to win money for projects. But under the new measure, there will now be a pot of $100 million in ongoing funding to be split among the eight public universities, which will pitch projects to the Utah System of Higher Education.
That system will also do its own analysis of building requests, in addition to the State Building Board.
The idea is that rather than creating new buildings, more schools will look at updating spaces and remodeling. This year, of the record $158 million dedicated to university projects, only $1 million will be used for that.
David Buhler, commissioner for the Utah System of Higher Education,
said in a written statement that the process has been overhauled and will be improved further with the audit recommendations.
The new law states that to be approved, new college buildings should be “cost effective and an efficient use of resources … and fulfill a critical institutional facility need.”
Editor’s note: Huntsman Hall at USU was named for the late Jon Huntsman Sr. His son, Paul Huntsman, is the owner and publisher of The Salt Lake Tribune.