Contact: Monty Jones, (512) 499-4363

Date: February 3, 2004

UT System News Release

Inspired by Sarbanes-Oxley Act, UT System Will Hire Outside Auditor

BROWNSVILLE – The University of Texas System plans to hire an outside firm to conduct a complete System-wide audit of financial statements. The audit will be conducted for fiscal year 2005, which begins next September.

The audit plan, reviewed on Tuesday by the Audit, Compliance, and Management Review Committee of the Board of Regents, will be the first comprehensive audit of the entire 15-campus system, as well as the first such audit at any public university system in Texas.

The decision to conduct the audit is part of the UT System's effort to comply with the spirit of the federal Sarbanes-Oxley Act, which was passed in 2002 in response to management scandals at several corporations. The act does not govern higher education institutions, but the Board of Regents decided last November to abide by the spirit of the law.

“A comprehensive external audit will provide the Board of Regents and the people of Texas with assurance regarding the integrity of our financial statements,” said Robert A. Estrada, a regent from Dallas and chairman of the Audit, Compliance, and Management Review Committee. “This action sends a clear message that we are committed to accountability in all aspects of the UT System's operations.”

The decision to hire an external auditor requires approval of the Texas State Auditor's Office. The UT System anticipates gaining that approval, after which a bidding procedure will take place. Selection of an audit firm could occur by May. The audit would be completed by early 2006.

The System will be seeking a firm with experience in higher education and health care and with a practice of using subcontractors that are certified as minority- or woman-owned businesses.

Watch the archived video of the Board's Audit Committee Meeting (2/3/04)

UT System to adopt reforms inspired by Sarbanes-Oxley (11/11/2003)