Things keep getting worse for the University of Toledo's finances.

Already facing significant state funding reductions for next year, UT officials have discovered an internal budgeting error that means they will have $2.4 million less to work with than anticipated.

The mistake - a typo in a formula that led officials to overestimate projected revenue - was found Tuesday, the day before the UT board of trustees was to approve next year's budget and not long after the state informed UT that its support would be about $500,000 less than expected next year, said William Decatur, senior vice president for finance, technology, and operations.

All this happened after UT officials put together a budget that dealt with $1.5 million in state cuts for the 2004-05 academic year.

"It's incredibly frustrating," Mr. Decatur said. "It causes us to reset our expectations."

The board put off considering the budget this week and is expected to approve an amended version in June.

The budget as originally proposed had funding for a number of new initiatives, including $800,000 for a plan to hire 15 full-time faculty and $120,000 for a minority faculty hiring assistance plan. Those items are part of UT's strategic plan and will not be sacrificed even with the budget shortfall, officials

said.

"There's no altering course," President Daniel Johnson said. "Those are protected areas."

Mr. Decatur said UT aims to balance the budget without eliminating positions.

Instead, he hopes to find enough funds generated during the course of the year that would have gone to initiatives rolled out in the 2005-06 academic year.

"It won't halt, but it may slow down strategic investments," Mr. Decatur said.

Additional increases to tuition are not an option. The UT board of trustees last week approved a 9.9 percent increase in tuition and fees, the largest hike permitted by state law.

Last fall, the university had to deal with a $3.4 million budget shortfall after a tuition controversy in which the Ohio Board of Regents ruled that a change in UT's pricing structure would lead to a violation of state fee caps.

The budgeting error discovered this week was made in the institutional research office by an employee whom officials refused to identify.

While official UT projections call for a 10 percent decline in graduate student enrollment, an increase mistakenly was shown in a spreadsheet formula that led officials to overestimate enrollment and therefore revenue, Mr. Decatur said.

Dr. Johnson said no job action will be taken against the employee who made the mistake, who has a good performance record.

Officials will, however, pursue systemic changes to provide more safeguards in the future.

"We have very competent people," Dr. Johnson said. "I do think that the continuing fiscal pressures on universities have forced us to a level of staff support where there is little or no redundance in the process."

Richard Stansley, Jr., chairman of the UT board of trustees finance committee, said the situation is troubling, but the university will get through it as it has past challenges.

"There have been a number of fiscal crises that have come up. All of the individuals at the university, they pull together, they work hard, and they work to close the gaps," Mr. Stansley said.

Contact Ryan E. Smith at:

ryansmith@theblade.com

or 419-724-6074.

First Published May 1, 2004, 11:34 a.m.