HARRISBURG — The union representing faculty members at the 14 State System of Higher Education universities, which includes Slippery Rock University, is alleging that the state system is letting the schools mismanage their budgets.

The Association of Pennsylvania State College and University Faculties released a report Tuesday that said state-owned universities used affiliated corporations to hide debt, funded construction based on “questionable assumptions” and mislead the public about financial difficulties.

The union commissioned Boyer & Ritter, a Harrisburg-area accounting firm, to study the finances of the seven universities that claimed they needed to lay off faculty to balance their budgets: Cheyney, Clarion, East Stroudsburg, Edinboro, Kutztown, Mansfield and Slippery Rock.

Earlier this year, SRU announced that one tenured professor would be eliminated for the 2014-15 academic year.

The accounting firm found in all seven cases that the universities created affiliated entities or used foundations to take on debt for new construction.

“We are extremely troubled by the results. The universities and the state system are mismanaging public dollars,” said APSCUF President Steve Hicks in a statement.

He said every university transfers debt to university foundations or student housing associations, and these entities take on debt to pay for new facilities.

Hicks said money from tuition, fees and the state regularly gets transferred to these entities, and the public does not know it.

“Our students, their families, and the public deserve to know how their money is actually being spent,” Hicks said.

Kenn Marshall, a state system spokesman, said there are a number of inaccuracies in the union’s statement, noting the report does not fully acknowledge the current year and future impact on the universities’ budgets of the seven collective bargaining agreements reached last year.

He said the statement also does not recognize major pressures on universities from rising health care and pension costs, all of which are funded primarily through a combination of student tuition and state funds.

“Neither of those two sources of funds are used to support auxiliary operations, including student housing. Auxiliary operations are funded solely through user fees, including room and board,” Marshall said.

He also said state system schools have used many public-private partnerships to help finance and construct student residence facilities, which he said is “a well-accepted practice.”

Ed Bucha, executive director of the SRU Foundation, said SRU does not transfer any money to the foundation.

On the contrary, he said the foundation, which was founded in 1970 and is separate from SRU, pays for university scholarships and helps with other SRU programs.

“We support the university programs,” Bucha said.

The SRU Foundation oversaw the construction of six residence halls at a cost of $125 million in the mid-2000s and the foundation owns the dormitories.

Bucha said the foundation, not the university, took on debt to pay for the new buildings.

“No public money there,” Bucha said.

All of the money the foundation gets comes from donations and fundraising, and all of the money is private. He noted that the foundation does not take any state or federal money. “That’s a big no no for nonprofits,” Bucha said.

Patrick Burkhart, president of SRU’s APSCUF chapter, said he recognizes the need for modern residence halls, but said universities should be mindful of their ability to pay debt off and to be sustainable.

“Our foundation did encumber very large debt to construct new resident halls on our campus,” Burkhart said.

The accounting firm for the union also said it found a lack of oversight in state system budgeting practices.

“There are no common statewide budgeting practices among the universities,” Hicks said, adding that cuts in state funding have led to poor decision making by the universities.

The union represents more than 6,000 employees in the state system, including about 475 professors and 30 coaches at SRU.