Texas Southern University Faces Financial Crisis as State Freezes Funding

Audit Reveals Massive Financial Mismanagement

Texas Southern University finds itself at the center of a financial scandal that has prompted state officials to freeze funding and launch a criminal investigation. Lt. Gov. Dan Patrick on Wednesday called the audit "beyond disturbing." He added that his office, together with Gov. Greg Abbott and House Speaker Dustin Burrows, has ended any spending by TSU on contracts other than ongoing university expenses needed to keep the school open.

The state audit uncovered staggering financial irregularities at the Houston-based historically Black university. In November, the state auditor's office released preliminary findings revealing more than 700 invoices totaling more than $280 million were tied to vendors whose contracts had expired in the contract database. And more than 800 invoices worth nearly $160 million were dated before the purchase were officially requested or approved.

Texas Southern University has "significant" financial weaknesses, the result of whole departments bypassing established purchase guardrails and the university failing to enforce established contract and accounting procedures, a state audit released this week reveals. "University departments ordered directly from vendors without first obtaining the required approvals and budget checks, which creates legal and financial obligations for the University," the audit report said.

Decades of Financial Troubles

The Houston university, which has an enrollment of about 8,000 students has had a history of financial and operational problems dating back more than 40 years. "For more than two decades, TSU has experienced serious financial and management difficulties," Hamilton wrote more than 25 years ago. "Most recently, these difficulties include declining student enrollment, critical financial audits, potential losses of federal funding, and contingency appropriations by the Texas Legislature to cover anticipated cash-flow shortages."

The university's problems extend beyond financial mismanagement. A complete lack of a regular physical inventory procedure. The last time an annual inventory on the university's physical assets was conducted was in 2019. Frequently late and inaccurate financial reporting with reports getting to the state comptroller's office nearly a year late in 2023.

Past scandals have plagued the institution for years. In 2006, former university president Priscilla Slade was charged with embezzling more than $600,000 from the school, which she allegedly spent on china, furniture, and landscaping for her home. In 2020, allegations of bribery and kickbacks in the law school admissions process led to the ousting of the sitting president at the time, Austin Lane. Students with low academic credentials were admitted and given more than $430,000 in scholarship money, and cashier's check and money orders were found stashed under one admission official's desk calendar, an internal investigation found.

Staffing Crisis Compounds Problems

Crawford also noted that some 200 vacancies, some in key positions like the IT department, have exacerbated the problems with financial oversight since the last audit of the university was done in 2006. Those critical vacancies have "fostered longstanding structural weaknesses that have had cascading effects over the intervening years, driving operational vulnerabilities and contributing significantly to the deficiencies identified in the audit."

Patrick previously requested a Texas Rangers investigation into any criminal wrongdoing at TSU, one of the nation's largest historically Black colleges, and that probe is continuing. "The results of the State Auditor's report released today on Texas Southern University are beyond disturbing and show, at a minimum, a clear mismanagement of millions of taxpayer dollars over many years," Patrick wrote on X, formerly known as Twitter.

University's Future Hangs in Balance

"It is my hope, for the sake of the students at the university, that TSU can continue," Patrick wrote on the social media site X. However, the path forward remains uncertain as state officials demand immediate reforms. However, he said, to do so, "dramatic and permanent changes must occur immediately" for TSU to comply with state standards.

In a Dec. 22 letter addressed to State Auditor Lisa Collier, TSU President J.W. Crawford III laid out a list of remedies the school has taken in the last year while also stating the school's commitment to correcting the deficiencies. "The University is committed to remediating the findings by the State Auditor's Office," Crawford's 12-page response stated.

The crisis at TSU represents more than just financial mismanagement—it threatens the future of one of America's largest historically Black universities. With criminal investigations underway and state funding frozen, the institution must demonstrate swift and comprehensive reforms to survive. The coming months will determine whether decades of systemic problems can be overcome or if legislative intervention will reshape the university's governance entirely.