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ALBANY, N.Y. (AP/WBEN) - State Comptroller Thomas DiNapoli says he's found conflicts of interest, overpayments and misuse of credit cards at the State University of New York Research Foundation.
“For too long, SUNY Research Foundation employees took advantage of lax oversight to cheat taxpayers, skirt state laws and violate the foundation’s own policies,” DiNapoli said. “The Research Foundation needs to vastly improve its internal controls, budgetary oversight, and ensure compliance with all relevant laws and policies. The foundation needs to recover all misspent funds immediately and fundamentally change how it operates.”
He says one employee, a senior SUNY Research Foundation official at Buffalo State College, Edgar H. Turkle III, used his foundation-provided credit card to personally enrich himself. A review of 424 of Turkle’s credit card transactions for the 48-month period November 2007 through November 2011 found 348 purchases totaling $130,887 that were not business-related. Turkle charged the Research Foundation $22,225 for Buffalo Sabres hockey tickets and other personal expenses such as a birthday party for his wife, an Apple computer, iPad and iPhones, chocolates, and groceries. He also traveled to foreign countries, primarily in Asia, in 29 out of the 48 months reviewed, incurring $125,342 in related costs paid through travel vouchers that had no trip itineraries or agendas.
Several of the problems cited took place with the knowledge and understanding of high level officials. Turkle’s travel vouchers were approved and processed by employees that Turkle supervised, and not by Turkle’s supervisor, while the provost at Buffalo State approved $50,000 in inappropriate extra service payments for Turkle.
Turkle has been terminated by the Research Foundation and the audit’s findings have been referred to law enforcement.
The arm of SUNY supports campuses and research and has often helped fund highly paid researchers to keep them at the state university.
There was no immediate comment from the foundation.
Buffalo State College has issued the following statement:
“It is clear that serious errors of judgment were made by a former Research Foundation employee in the handling of RF expenditures," said Buffalo State President Aaron Podolefsky. “Upon learning of these inappropriate and unethical actions, the RF employee in question was terminated and Buffalo State took immediate action to assume direct oversight of RF operations on campus, including appointing Buffalo State’s comptroller to serve as operations manager for the RF campus office. In addition, numerous controls have been implemented to ensure that all policies and procedures will be strictly adhered to in the future.”
The SUNY Research Foundation has issued its own statement:
The Office of the New York State Comptroller today issued a report on “Selected Human Resource Controls and Potential Conflicts of Interest” at The Research Foundation for The State University of New York (“RF”), following a broad and comprehensive internal and external review of the RF initiated by SUNY leadership that began in August 2010.
From the beginning of this process, RF and SUNY leadership have viewed the audit as an opportunity to acknowledge past problem areas at the RF, embrace potential improvements, refocus on the RF’s mission to serve SUNY, and to reclaim the public’s trust. We have pledged our full cooperation throughout this process and we are pleased to see this comprehensive review culminate in an improved culture and higher standard of overall operations at the RF.
Under new leadership and as a result of thorough review, the RF is a markedly changed and improved organization, having implemented an extensive control environment together with new policies and procedures to help safeguard the nearly $1 billion in research activity it processes annually. The RF has:
· Instituted new protocols that raise the standards of accountability of officers and employees alike, and set clear expectations of ethical behavior;
· 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, each of whom brings different and diverse skill sets and valuable expertise to the table, and
· Reinforced its institutional commitment to the highest standards of integrity and ethical behavior.
We thank the OSC for its thorough review and recommendations as SUNY and the RF strive to set a national model for research foundations across the country.
Background
A SUNY-commissioned report entitled Review of The Research Foundation – SUNY Relationship was released in May 2011, and the following month, SUNY charged two task forces – one comprised of members of the RF Board of Directors and the other of members of the SUNY Board of Trustees – to advise their respective boards on how to address over 50 recommendations with the goal of strengthening the RF’s ability to fulfill its mission to serve SUNY.
In November 2011 a Summary Report of the SUNY Board of Trustees and Research Foundation Board of Directors Task Forces’ Joint Review of the SUNY-RF Relationship was released. That review and the audit released today validate the critical role the RF plays in supporting essential research throughout the state.
As a private non-profit educational corporation, the RF provides sponsored programs administration and commercialization support services to SUNY faculty, students and staff who are making ground-breaking discoveries every day in the areas of nanotechnology, biotechnology, materials science, high speed computing and other fields.
The OSC report covers an audit period of July 1, 2008 through January 31, 2012, and was prompted by specific concerns related to previous management and oversight of the RF. This audit was primarily focused on the management of indirect cost recovery funds, also known as facilities and administrative costs or “overhead” – costs allocated to the general operation of the organization and the conduct of its grant activities. The funds in question represent a small fraction of the RF’s overall operation when compared to the much larger direct costs associated with grants and contracts administered across SUNY’s 30 state -operated campuses. As to these funds, and during the same period of review, the RF received independent audits by an external public accounting firm on its annual financial statements and its compliance with U.S. Office of Management and Budget Circular A-133. These audits validate the RF’s compliance and sound management of sponsored funds.
The RF exists to serve SUNY and to capitalize on its scope, scale and diversity as an engine of New York State’s innovation economy, and is working actively and collaboratively across the state to grow research, advance a culture of entrepreneurship, stimulate commercialization, and develop the needed human capital to build out SUNY’s innovation ecosystem for the benefit of New York and the world.