The University of South Florida paid a former athletic director and assistant football coach $626,000 more than the state's legal limit for compensation, according to a report released Wednesday by Florida's auditor general.In 2014, USF paid former athletic director Doug Woolard $610,000 — $100,000 more than Woolard's annual salary and $415,000 beyond what the director should have legally received, according to the audit.Paul Wulff, an assistant football coach and offensive coordinator, received $326,437 in severance, $211,000 more than what the coach legally should have received, the audit concluded.In addition, the contracts for USF's head football and basketball coaches, as well as current athletic director Mark Harlan, violate state law by failing to cap the amount these sports chiefs would be paid if let go, the audit said.The university defended the payments, saying that the world of college sports operates under different rules."The contractual provisions … reflect the market for individuals in intercollegiate athletics, which is relatively small and where the impact of a termination without cause tends to create damages that are difficult to quantify, such as reputational loss and reductions in future hiring prospects and earning potential," USF wrote in a response to the audit signed by chief financial officer Nick Trivunovich.Florida law prohibits a unit of government — including public universities — from offering severance pay beyond 20 weeks of salary, including benefits. It also requires these contracts to scrap severance pay in cases of misconduct.Meanwhile, the contracts for Harlan, head football coach Willie Taggart, head men's basketball coach Orlando Antigua, and head women's basketball coach Jose Fernandez, don't have provisions in their contracts that the state requires to limit severance, should the university fire them.Adam Freeman, a spokesman for USF, declined to comment on why the university believed it was acting lawfully. "As our response in the report indicates, the university's position is that it complies with state law, and the university respectfully disagrees with this finding."In its audit response, USF argued that the payments to Woolard and the former assistant coach are not technically severance pay, pointing to early retirement packages, accrued sick leave and administrative leave. Because of abstract losses associated with a coach leaving, like reputation, USF views some of the payouts as pre-negotiated damages, not severance.Sherrill Norman, the auditor general, disagreed with USF's defense."The payment amounts were based on salaries and were provided to employees whose employment had recently been terminated," Norman wrote. "Therefore, as the payments exceeded 20 weeks of compensation, the payments appear contrary to state law."Woolard, who came to USF in 2004 from St. Louis, was removed from the athletic director position in 2014 amid dissatisfaction with the performance of USF's football and men's basketball teams. He was allowed to remain at the university until his contract expired in 2015.The Tampa Bay Times reported last year that Woolard received more than $1 million from USF, including $400,000 in deferred compensation.The money came from USF Athletics revenue sources, and not from public dollars.In unrelated findings, the auditor also flagged the university for failing to properly background check all its employees, and for improperly classifying certain Latin American students as Florida residents.State law allows USF to categorize students from Latin American or Caribbean countries as residents if they receive state or federal scholarships; however, USF was doing this even when the students were receiving other, non-qualifying scholarships.For example, 272 of 338 students examined by the auditor were receiving scholarships of up to $17,736 from USF, but had not received any federal or state scholarships. USF collected $2.9 million less in student fees than it should have.The university contended that because its funding draws from state or federal sources, it was correct to call these foreign students Florida residents.Contact Lisa Gartner at [email protected] Follow her on Twitter @lisagartner.