Texas Southern University faces an uphill climb to regain financial autonomy as it enters 2026 under a crippling state funding freeze.
Following a financial audit that exposed systemic mismanagement, the university must now navigate intense state oversight to demonstrate that it can be trusted with its own finances.
Signaling a potential state takeover, Lt. Gov. Dan Patrick issued a New Year’s Eve ultimatum to TSU: Fix the “disturbing” financial mismanagement discovered in the December 2025 audit, or the legislature will step in and do it for them.
“It is my hope, for the sake of the students at the university, that TSU can continue,” Patrick said in the post. “However, to do so, dramatic and permanent changes must occur immediately to comply with state standards… I will do everything within my power to be sure that not one additional taxpayer dollar goes unaccounted for ever again at TSU.”
State Rep. Harold Dutton, Jr. (D-Houston) responded with a message of his own. “These clowns should look in the mirror. Any problems at TSU must be directed to the Board of Regents. And who appointed them for the last 30 years? The clowns in the mirror,” he posted on social media.
Systemic failures
The December 2025 state audit found significant and systemic failures in TSU’s financial operations, concluding that the HBCU repeatedly bypassed procurement safeguards, showed “significant deficiencies” in its asset management functions, failed to account for millions of dollars in assets, and submitted late and inaccurate financial reports to the State of Texas.
The audit reviewed TSU’s procurement and asset management practices from September 2022 through July 2025, along with financial reporting for fiscal years 2023 and 2024.
Auditors classified the issues as “priority” concerns, meaning they pose serious risks to the university’s ability to manage public funds responsibly if left unaddressed.
Financial lockdown
Patrick said he, along with Gov. Greg Abbott and House Speaker Dustin Burrows, has frozen all non-essential spending at the institution. At the same time, a criminal investigation by the Texas Rangers remains ongoing.
“Everyone involved must be held accountable, from school employees to contractors, going back as many years as there are questionable records and practices. Let the facts lead where they may,” Patrick said.
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.
— Office of the Lieutenant Governor Dan Patrick (@LtGovTX) December 31, 2025
The new TSU President, on the job for less than 2 years, agrees with the…
Congresswoman Sylvia Garcia (D-TX-29) and Congresswoman Alma Adams (D-NC-12), founder and co-chair of the Bipartisan Historically Black Colleges and Universities (HBCU) Caucus, wrote a letter to Abbott, expressing concern over his decision to order a law enforcement investigation into TSU before a state audit is finalized.
“Texas Southern University is being put at risk before the facts are even on the table,” said Congresswoman Garcia. “Launching a law enforcement investigation while an audit is still underway threatens TSU’s funding, damages its reputation, and creates uncertainty for students and faculty. Accountability matters, but so does fairness. The governor owes Texans a clear explanation for why this step was taken early and how he plans to protect the future of the state’s only independent public HBCU.”
What does the audit say?
Auditors at the State Auditor’s Office found that TSU regularly violated its own procurement rules, allowing departments to purchase goods and services without required approvals, budget checks, or documentation. In all 60 invoices sampled by auditors, totaling $102,100, departments ordered directly from vendors before completing purchase requisitions, a process designed to ensure spending is authorized and funds are available.
In the procurement process, key findings from fiscal years 2023 through 2025 include:
- The university’s contract database, known as the Legal Management System, was riddled with errors. 97% of vendor records reviewed contained incorrect contract dates, amounts, or approval statuses, and some contracts were missing entirely.
- More than 8,000 vendor invoices across the university were dated before requisitions were created.
- TSU lacked a reliable system to verify whether vendor contracts were valid. Auditors found that 743 invoices were paid on contracts that had already expired.
In asset management:
- There were severe breakdowns in asset management. TSU had not completed its required annual physical inventory since 2019, a lapse that auditors say directly contributed to the university’s inability to locate 50 of 60 assets tested, representing $3.2 million in purchase value.
- Financial reports were frequently inaccurate, with 2023 data submitted nearly a year past the deadline.
- The University did not consistently track asset disposals. Many assets lacked assigned custodians or were still attributed to former employees. As a result, assets that had been auctioned or written off, including a $560,000 bus for which the university had already been reimbursed by insurance, continued to be active assets in the system.
- TSU maintained a separate Microsoft Access database containing more than 7,700 assets that were not recorded in Banner, the university’s official system of record. Auditors described this dual-system approach as “a significant breakdown” in accountability that made it impossible to determine what property the university actually owns.
In financial reporting:
- TSU failed to provide timely and accurate financial information to the Office of the Comptroller of Public Accounts. The financial statements for fiscal year 2023 were submitted 10 months late, while fiscal year 2024 statements were filed four months past the deadline.
- Unaudited financial data submitted to the state contained major errors, including misstatements of debt payments by $86.5 million in FY 2023 and $77.3 million in FY 2024. While these errors were later corrected in audited statements, the delays forced the Comptroller’s Office to make adjustments to the state’s annual financial report.
The university’s defense
TSU President J.W. Crawford III has concurred with the audit’s findings. In a 12-page response, Crawford attributed much of the oversight failure to 200 staff vacancies, including critical roles in IT and finance, which he says created “cascading effects” and operational vulnerabilities.
“The University is committed to remediating the findings by the State Auditor’s Office,” Crawford stated. “As an institution, we are implementing initiatives to improve and strengthen processes and internal controls across all areas of our operations, both financially and operationally.”
In a formal statement, the university expressed appreciation for the SAO’s recommendations and confirmed it has adopted all suggested remedies to restore “compliance, integrity, and effectiveness” to its business processes.
Prior turbulence
The current crisis is the latest chapter in a 40-year history of operational and financial instability at TSU. The audit mirrors a 1999 review that found similar mismanagement, and the school has been rocked by scandals over the decades:
- 2020: President Austin Lane was ousted following a bribery and kickback scheme involving law school admissions.
- 2006: Former President Priscilla Slade was charged with embezzling over $600,000 in school funds for personal luxury items.
- 2003: A grade-for-money cheating scandal was uncovered.
- 1992: The university’s band was temporarily dissolved following shoplifting allegations during an international trip.
“While we must pursue the truth in the allegations made by the State Auditor’s Office, we must also ensure that TSU’s students – the heart of this institution – remain protected,” said State Sen. Borris Miles in a statement. “This audit has been going on for months, and I am highly disappointed that I was not informed and found out this information at the same time as the public.”
The Defender has reached out to TSU for comment.
