NIU President John La Tourette said students will not have to pay for deficits found in a state audit of NIU.

La Tourette responded Wednesday in a statement to the University Council to a Financial Audit Report Digest prepared by the Auditor General.

“The university improperly used state-appropriated funds to subsidize retirement contributions for auxiliary enterprises,” the auditor general stated in the report.

The subsidy for 1990 was about $650,000, the report stated.

“At issue here are the payment of state funds which are being made centrally for all public universities to support the retirement contributions for employees in auxiliary enterprises (i.e. bond revenue),” La Tourette said.

He said the auditor was correct about NIU getting the subsidy, but said it’s a state-wide problem which should be resolved “by proposed legislation permitting public universities to pay this subsidy from state funds.”

Already, the legislature has passed a bill allowing universities to subsidize fringe benefits—not retirement contribution—of auxiliary enterprises or bond revenue employees.

Public universities have questioned the auditor’s findings about the retirement payment because it would increase student room and board rates and fees if the university had to cover the cost of the retirement benefit from revenue generated by auxiliary enterprises.

“In other words, the $650,000 identified in the case of NIU would have to be passed directly to students in the form of an increase of approximately $80 per year in room and board rates and $24 in fees,” La Tourette said.

The auditor general also said the “university improperly subsidized its Continuing Education and Public Service entity with funds of other entities.”

La Tourette said the university plans to eliminate the deficit by an appropriate decrease in expenditures and an increase in revenues with the area covered by the account; therefore, it has no intention of subsidizing this particular account.

“We have no basic disagreement with the auditor general’s report, except we believe it is not appropriate to use the term ‘subsidy’ because no other unit will have its funds reduced in order to cover this deficit.”