Research Foundation of the
State University of New York
Selected Human Resource
Controls and Potential Conflicts
Issued: October 22, 2012
Link to full audit report 2011-S-24
To determine if certain aspects of the Research Foundation for the State University of New York's (Research Foundation) employee practices, contracts and purchases complied with applicable requirements. The audit covers the period July 1, 2008 through January 31, 2012. In addition, we determined the status of implementation of the recommendations from our prior report (2004-S-13) entitled Research Foundation for the State University of New York: Administrative and Discretionary Costs.
The Research Foundation was chartered in 1951 by the Board of Regents as a private, nonprofit educational corporation. Its mission is to work with campus leadership to support research and discovery at the State University of New York (SUNY) through administering sponsored projects and sharing intellectual property for public benefit and economic growth. The SUNY Chancellor serves as ex officio chair of the 15-member Research Foundation governing board. The Research Foundation has a central office in Albany (Central Office) and offices at 30 SUNY locations. The locations are responsible for day-to-day administration of sponsored programs.
- Edgar H. Turkle III, Operations Manager for the Research Foundation at Buffalo State College, 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. His actions violated policy and resulted in his personal enrichment at the expense of the Research Foundation.
- The Central Office compensated a former General Counsel $345,034, plus a severance package, for less than a year of service. In fact, we calculated the total cost of hiring and employing this individual was $665,356 for an 11-month period. We question the Research Foundation's justification for agreeing to these payments in the employment contract it entered into with this individual.
- The Research Foundation assisted a retiree in circumventing Retirement and Social Security Law limits on retiree compensation by hiring this former SUNY Stony Brook employee when she neared the $30,000 salary cap. The employee continued to perform work for SUNY Stony Brook even though she was being paid by the Research Foundation.
- The Research Foundation paid $3 million for 10 contracts where we identified a potential conflict of interest and violations of Research Foundation policies. As a result, the Research Foundation has little or no assurance that reasonable prices were paid for services.
- The Chancellor's account was charged $27,968 to pay for questionable items, including membership to a private club. Given the nature of these items, we recommend that criteria be strengthened to make clear when such expenses are appropriate.
- We had questions regarding the time and attendance of a Research Foundation employee and referred these matters to the State Attorney General's Office.
- Certain of the findings we identified are similar to the findings in our prior audit of the Research Foundation. In this regard, Research Foundation officials made limited progress in correcting the problems we identified in the prior audit. Of the prior report's six recommendations, one was implemented, two were partially implemented, and three were not implemented.
- We believe that many of the problems reported here are attributable to a weak internal control environment. Since multiple people and locations were involved in the problems we found, we believe an improved internal control environment is necessary to prevent abuses.
- Improve the control environment at the Research Foundation to better ensure compliance with all relevant laws and policies, including those related to procurement and payroll.
- Recover funds spent on purchases and personnel costs that were excessive or not in line with the Research Foundation's mission.
Other Related Audits/Reports of Interest
Research Foundation of the State University of New York: Administrative and Discretionary Costs (2004-S-13)
State Government Accountability Contact Information:
Audit Director: Brian Mason
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236