New York State Oce of the State Comptroller
Thomas P. DiNapoliDivision of State Government Accountability
Report 2011-S-24October 2012
Selected Human ResourceControls and Potenal Conictsof InterestThe Research Foundaon for theState University of New York
2011-S-24
Division of State Government Accountability
1
Execuve Summary
Purpose
To determine if certain aspects of the Research Foundaon for the State University of New York’s(Research Foundaon) employee pracces, contracts and purchases complied with applicablerequirements. The audit covers the period July 1, 2008 through January 31, 2012. In addion,we determined the status of implementaon of the recommendaons from our prior report(2004-S-13) entled Research Foundaon for the State University of New York: Administraveand Discreonary Costs.
Background
The Research Foundaon was chartered in 1951 by the Board of Regents as a private, nonproteducaonal corporaon. Its mission is to work with campus leadership to support research anddiscovery at the State University of New York (SUNY) through administering sponsored projectsand sharing intellectual property for public benet and economic growth. The SUNY Chancellorserves as ex ocio chair of the 15-member Research Foundaon governing board. The ResearchFoundaon has a central oce in Albany (Central Oce) and oces at 30 SUNY locaons. Thelocaons are responsible for day-to-day administraon of sponsored programs.
Key Findings
• Edgar H. Turkle III, Operaons Manager for the Research Foundaon at Bualo State College,charged $130,887 to his corporate credit card for such quesonable items as foreign travel,high-end dining and hotels, and personal items such as a laptop computer, an iPad, iPhones andgroceries. His acons violated policy and resulted in his personal enrichment at the expense of the Research Foundaon.• The Central Oce 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 employingthis individual was $665,356 for an 11-month period. We queson the Research Foundaon’s juscaon for agreeing to these payments in the employment contract it entered into with
this individual.
• The Research Foundaon assisted a reree in circumvenng Rerement and Social SecurityLaw limits on reree compensaon by hiring this former SUNY Stony Brook employee when sheneared the $30,000 salary cap. The employee connued to perform work for SUNY Stony Brookeven though she was being paid by the Research Foundaon.• The Research Foundaon paid $3 million for 10 contracts where we idened a potenal conictof interest and violaons of Research Foundaon policies. As a result, the Research Foundaonhas lile or no assurance that reasonable prices were paid for services.• The Chancellor’s account was charged $27,968 to pay for quesonable items, includingmembership to a private club. Given the nature of these items, we recommend that criteria bestrengthened to make clear when such expenses are appropriate.• We had quesons regarding the me and aendance of a Research Foundaon employee andreferred these maers to the State Aorney General’s Oce.• Certain of the ndings we idened are similar to the ndings in our prior audit of the ResearchFoundaon. In this regard, Research Foundaon ocials made limited progress in correcng
2011-S-24
Division of State Government Accountability
2
the problems we idened in the prior audit. Of the prior report’s six recommendaons, onewas implemented, two were parally implemented, and three were not implemented.• We believe that many of the problems reported here are aributable to a weak internal controlenvironment. Since mulple people and locaons were involved in the problems we found, we
believe an improved internal control environment is necessary to prevent abuses.
Key Recommendaons
• Improve the control environmentat the Research Foundaon to beer ensure compliance withall 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 withthe Research Foundaon’s mission.
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