The Research Foundation for the State University of New York

 

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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

The Research Foundation for the State University of New York
Technology Transfer Program and Royalty Payments

Issued: January 17, 2020
Link to full audit report 2019-S-10

Objective
To determine if the Research Foundation for the State University of New York (Research Foundation) has taken the appropriate steps to protect the State University of New York’s (SUNY) interest in the transfer of technology and royalties received for intellectual property developed at SUNY campuses. The audit covered the period January 1, 2015 through August 14, 2019.

About the Program
The Research Foundation’s mission is to provide talent, services, and technology that empower SUNY to research, innovate, and transfer discoveries that transform the world’s knowledge economy. As part of its duties, the Research Foundation supports SUNY’s technology transfer – a collaborative process that requires efforts from the Research Foundation, creators of intellectual property (IP), and industry partners to translate academic discoveries into commercial products and services that benefit society. When IP is licensed and begins generating revenue, the Research Foundation is entitled to receive royalty payments based on executed agreements with the licensee.

Key Findings

  • The Research Foundation has taken steps to protect SUNY’s interest in the transfer of technology and royalties for projects developed at SUNY schools. We found the Research Foundation retained ownership rights for 94 percent of all IP disclosures from January 1, 2015 through March 12, 2019. We also found the Research Foundation made decisions about retaining ownership rights for disclosed IP within the applicable time frames, and verified royalty payments were correctly calculated by the licensees and allocated to campus and creator accounts.
  • The Research Foundation has not developed routine monitoring mechanisms to determine whether a licensee is paying the full royalty owed. The lack of a standard approach and dedicated resources to monitor payments and compliance with licensing agreements creates the risk that SUNY and IP creators are not receiving the full funds to which they are entitled.
  • Since 1992, Downstate Health Sciences University (Downstate) has accumulated $1,019,390 in campus royalty revenue, none of which has been used to support SUNY research programs. Downstate’s failure to reinvest royalty proceeds may have hindered implementation of SUNY’s policy of encouraging innovation and managing royalty income.

Key Recommendations

  • Develop monitoring mechanisms to provide reasonable assurance that the royalty payments received comply with licensing agreements.
  • Work with Downstate to develop policies and procedures for the use of funds in the campus project account and for the distribution of future royalty revenue.

State Government Accountability Contact Information:
Audit Director: Brian Reilly
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