SUNY: Research Foundation reforms already underway

0

Responding to a state Comptroller’s Office audit released Monday, the State University of New York said reforms have already begun to correct problems at the SUNY Research Foundation that are highlighted in the audit.

Comptroller Thomas DiNapoli’s audit revealed misspending of funds, including that an operations manager for the foundation at Buffalo State College charged $130,887 to his corporate credit card for foreign travel for him and wife and personal items, such as computers, an iPad and groceries. The audit also found that a fund controlled by SUNY Chancellor Nancy Zimpher billed the foundation $27,968, including $13,172 for beverages (mostly alcohol for receptions) and $9,822 to join a private club.

SUNY responded Monday afternoon: “Over the last two years, SUNY leadership has overseen the most comprehensive review in the history of The Research Foundation, and as a result it is a markedly improved organization,” Zimpher said in a statement. “From the beginning, SUNY and RF leadership have viewed the audit as an opportunity to acknowledge past problems and pledged full cooperation. The comptroller’s findings are confirmation that change was necessary.

“The RF is moving forward under the new leadership of Dr. Timothy Killeen, a world-renowned scholar and former National Science Foundation assistant director,” Zimpher continued. “The RF will continue to help capitalize on SUNY’s role as a major driver in building the state’s innovation economy and expanding research for the benefit of all New Yorkers.”

According to the news release, the foundation has adopted new protocols that raise the standards of accountability of officers and employees alike; reviewed its policies and procedures relating to procurement, contractual and transactional work across the operation; strengthened its governance and attracted new members to its board of directors; and reinforced its institutional commitment to the highest standards of integrity and ethical behavior.

A full description of how SUNY said it is addressing issues raised in the audit is as following:

Several points highlighted in the OSC report have already been addressed by Chancellor Zimpher and Dr. Killeen throughout this multi-year reform effort. These include:

· The re-focused use of the so-called “Chancellor’s Account.” This account was appropriately renamed as the “Strategic Plan Allocation” to support system-wide initiatives such as cradle-to-career partnerships, educational conferences, student and faculty achievement awards, and the release of SUNY’s annual report card. As is commonplace at any college or university, SUNY hosts events to engage stakeholders and supporters that may include food and beverage expenses. As we stated in our official response to the draft audit, the expenditures were for legitimate SUNY business, and are reasonable and appropriate. The club membership identified as being paid from this account was cancelled voluntarily by the Chancellor in December 2010 before the OSC audit even began and, in fact, OSC itself removed allegations of funds being used for items “personal in nature” from their final report.

· The continuous review and improvement of the RF control environment to ensure compliance with applicable law and policy. The RF has implemented extensive controls and continuously updates and improves its policies and procedures, including those related to procurement and payroll, to ensure compliance. Recently, the RF recruited new management and board members and enhanced board governance. Further, a new Code of Conduct was issued, policies have gone under review, and a new compliance oversight function has been created. In addition, an Internal Audit team has been developed and is executing a risk-based audit plan, a best practice for concentrating audit activity in high risk areas.

· Ensuring open competition takes place in procuring contracts, and a reasonable price is paid. The RF acknowledges that documentation supporting the issuance of these contracts was, at times, insufficiently detailed and untimely; however, no actual conflicts of interest existed relative to the identified contracts. The vendors hired had the experience and expertise required, reasonable prices were paid, and the contracts were necessary. The RF is taking steps to ensure that any future single or sole source justification is properly documented. In particular, the Honorable Judith Kaye, Retired Chief Judge of the New York Court of Appeals, was retained as counsel at Skadden, Arps, Slate, Meagher, & Flom LLP in New York City by the Executive Committee of the SUNY Board of Trustees to conduct a review and analysis of the Men’s Basketball program at Binghamton University. The single-source contract awarded was not for legal representation of the SUNY Board of Trustees, and therefore could not have fallen under the auspices of the State Attorney General as OSC recommends.

· Termination of the operations manager for the Research Foundation at Buffalo State College. The RF agrees that policy was violated. RF management conducted an in-depth independent review of the referenced activities and took swift and appropriate action including termination from employment and referral to law enforcement. The RF also implemented new controls to help protect against misuse of funds, including fundamental changes in reporting and management and training of Operations Managers.

Share.

About Author

Comments are closed.