The Office of the New York State Comptroller released an audit of The Research Foundation for the State University of New York on Monday Oct. 22, which highlights what are being considered to be questionable spending practices within the nonprofit between July 2008 and January 2012.
Founded in 1951, The Research Foundation funds research and development at the 64 state college campuses. The State University of New York Chancellor Nancy Zimpher is the former officio chair of the 15-member board.
The audit concluded that a “culture of entitlement” exists among certain employees within the foundation. Further, the audit reported that these employees demonstrated a “cavalier attitude” toward their “policies and responsibilities.”
“We launched the audit after improprieties that came to light about the previous president of the Research Foundation,” said a spokesman from State Comptroller Thomas P. DiNapoli’s office. “Part of our mission is to make sure taxpayer dollars are not misspent.”
The audit’s key findings included the spending practices of Edgar H. Turkle III, former operations manager for the Research Foundation at Buffalo State College.
“Turkle charged $130,887 to his corporate credit card for such questionable items as foreign travel, high-end dining and hotels and personal items such as a laptop computer, an iPad, iPhones and groceries,” the audit said.
“His actions violated policy and resulted in his personal enrichment at the expense of the Research Foundation.”
Further, the audit found that the central office compensated a former general counsel for the foundation with $345,034 – in addition to a severance package for an 11-month employment period – that ultimately cost $665,356.
“We question the Research Foundation’s justification for agreeing to these payments in the employment contract it entered into with this individual,” the audit reported.
According to the audit, the Research Foundation paid $3 million for 10 contracts that “identified a potential conflict of interest and violations of Research Foundation policies.” These contracts also had “little or no assurance that reasonable prices were paid for services.”
Among the 10 contracts was a single source contract with Skadden, Arps, Slate, Meagher & Flom, LLP and Affiliates – totaling $913,500 – to investigate the men’s basketball program at SUNY Binghamton for the SUNY Board of Trustees.
The audit explained that single-source contracts must be justified and documented in order to gain approval prior to the contract being let.
Rather, the documents were dated Feb. 22, 2010 – the same day the firm received payment – thus letting the contract prior to the justification and documentation for the sole source.
The audit further said that conditions for appropriate expenses should be clarified based on Zimpher’s account, which was charged $27,968 to pay for “questionable items, including membership to a private club.”
The most recent audit’s findings are similar to those of prior audits of the Research Foundation. Specifically, of the previous report’s six recommendations, one was executed, two were partly implemented and three were not.
“We believe that many of the problems reported here are attributable to a weak internal control environment,” the audit reported.
“Since multiple people and locations were involved in the problems we found, we believe an improved internal control environment is necessary to prevent abuses.”
“Under new leadership and as a result of thorough review, the RF is a markedly changed and improved organization,” Research Foundation President Timothy Killeen said in a statement.
“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,” he said.