‘Significant issues’ with $41 million amid university president’s exit
Topline: Oklahoma State University “violated state law” with its “significant issues in allocation and management” of $41 million of state funding, according to a report from the school’s Office of Internal Audit, FOX23 reported.
The findings were revealed one month after university president Kayse Shrum abruptly resigned from her position. She made $2.5 million in salary during her four years as president, according to payroll records obtained by OpenTheBooks.com, including $720,000 last year.
Key facts: Oklahoma State was supposed to use the $41 million on education and research in its agricultural, medical and engineering departments. The money should have been allocated to specific “cooperative agreements” that would allow the state to approve and oversee the spending, the audit stated.
Instead, the university mixed half of the money ($20.5 million) with its general spending account, making it more difficult to track. Auditors found that $500,000 was later transferred to Cowboy Technologies, the school’s for-profit division that invests in technologies created by the school.
$11.5 million was moved to the schools’ Innovation Foundation — which makes products and services out of university research — even though the money was meant for the university itself. The audit does not specify whether the $11.5 million was part of the money mixed with the general spending account, or additional money spent improperly.
The audit suggests that the money may have been transferred to the Innovation Foundation because the department is struggling to generate revenue. Only a tiny portion of its income came from independent fundraising last year; 96% was state money that the Legislature never approved for the Foundation.
Another possible reason for the misallocated money is that there are officials working for both the Innovation Foundation and the university itself. Shrum was also the board chair of the Foundation, and the Foundation’s CEO Elizabeth Pollard reported directly to Shrum. This created a “conflict of interest” that “blurred the lines of governance,” auditors claimed.
Pollard resigned from her job the same week as Shrum.
The university’s interim president agreed to return the $11.5 million from the Foundation to the university and conduct a review to see if the Foundation is financially viable.
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Supporting quote: “I do not have any knowledge that any laws were broken,” Shrum told FOX23. “To my knowledge, absolutely nothing was done that was wrong or inappropriate. My training is as a physician, I am not a lawyer, and I relied upon the same legal advice that the Board of Regents were given. Any inference that anything was done wrong, based on everything that I know during my tenure as President, is simply not accurate.”
Summary: By reallocating state funds to anything other than its intended purpose not only hurts transparency efforts, but violates state law and makes the university not worthy of receiving additional state funds.
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