Oklahoma State University cuts funding to The Innovation Foundation after audit showed mismanagement
The audit claims $41 million in funds from the Legislature to Oklahoma State University’s Medical Authority weren’t “properly restricted” and were “co-mingled with other funds.”
Updated: 2:24 PM CDT Mar 12, 2025
PRESIDENT, THE FORMER PRESIDENT, ABOUT THESE CLAIMS. THIS NEWLY RELEASED AUDIT CLAIMS $41 MILLION IN FUNDS FROM THE LEGISLATURE TO THE OKLAHOMA STATE UNIVERSITY MEDICAL AUTHORITY WEREN’T PROPERLY RESTRICTED AND WERE CO-MINGLED WITH OTHER FUNDS. THE FUNDS, ACCORDING TO THE AUDIT, WERE FOR EDUCATIONAL AND RESEARCH ACTIVITIES AT OSU. BUT FROM JULY 2022 TO JANUARY 2025, THEY WERE IMPROPERLY HANDLED. THE AUDIT CLAIMS THERE WERE UNAUTHORIZED TRANSFERS, SOME OF WHICH VIOLATED STATE LAWS. THIS CHART SHOWS SIX ISSUES FOUND NOT PROPERLY ACCOUNTING FOR CERTAIN APPROPRIATIONS TRANSFERRING FUNDS INTENDED FOR OSU’S INNOVATION FOUNDATION. A LACK OF INDEPENDENT FUNDING FOR THE INNOVATION FOUNDATION. MORE THAN $55 MILLION IN FUNDS NOT BEING FULLY INCLUDED IN THE UNIVERSITY’S BUDGET. EXECUTIVE ROLES, CREATING CONFLICT OF INTEREST AND INAPPROPRIATE USE OF OSU’S EDUCATION AND GENERAL FUNDS. EACH OF THESE ISSUES, LABELED WITH HIGH RISK TO THE UNIVERSITY. THE AUDIT SAYS THIS MISHANDLING PUT THE UNIVERSITY AT FINANCIAL RISK FOR FEDERAL FUNDING AND GRANTS, AND AT RISK OF THEIR REPUTATION. IT’S UNCLEAR WHAT ROLE THESE ISSUES PLAYED IN PRESIDENT CASEY SHRUM’S RESIGNATION. SENATOR LONNIE PAXTON SAID LEGISLATORS HAVE BEEN BRIEFED ON THE AUDIT. ARE WE CONCERNED? ABSOLUTELY. WE’RE CONCERNED. AND SO IT’S YOU KNOW, WE WILL DIG DEEPER INTO IT TO SEE WHAT’S HAPPENED. I DON’T THINK IT SHOULD AFFECT FUNDING THIS YEAR BECAUSE, YOU KNOW, WE’D HATE TO MAKE A DECISION BASED ON HALF THE FACTS. WE DON’T KNOW ALL THE FACTS YET. AND THAT OSU’S ADMINISTRATION IS TAKING RESPONSIBILITY TO FIX IT. THE OSU CHIEF COMMUNICATIONS OFFICER FOR OSU TOLD ME TODAY THE NEWLY APPOINTED INTERIM PRESIDENT, DOCTOR JIM HESS, IS WORKING WITH THE BOARD OF REGENTS TO ADDRESS THESE ISSUES, WHICH HE CALLED CONCERNING YET ISOLATED AND NOT IMPACTFUL TO OSU’S OVERALL FINANCIAL FOUNDATION. THE UNIVERSITY BOARD OF REGENTS SAYS THEY HAVE A RESPONSIBILITY TO ENSURE FINANCIAL INTEGRITY, AND THEY’RE COMMITTED TO TRANSPARENCY AND TAKING SWIFT ACTION IN STILLWATER ALYSE JONES KOCO FIVE NEWS. ELISE, THANK YOU. AND AS WE JUST SAID, ELISE GOT HER HANDS ON THIS STATEMENT FROM THE FORMER PRESIDENT. THIS IS JUST INTO OUR NEWSROOM. FORMER OSU PRESIDENT CASEY SHRUM SENT US A STATEMENT SAYING NO MONEY IS MISSING. NO MONEY WAS TAKEN, AND THAT SHE UTILIZED THE LEGAL COUNSEL OF THE BOARD OF REGENTS THROUGHOUT HER TIME AS PRESIDENT.
Oklahoma State University cuts funding to The Innovation Foundation after audit showed mismanagement
The audit claims $41 million in funds from the Legislature to Oklahoma State University’s Medical Authority weren’t “properly restricted” and were “co-mingled with other funds.”
Updated: 2:24 PM CDT Mar 12, 2025
Oklahoma State University officials have decided to discontinue funding for The Innovation Foundation after an audit showed that the university mismanaged $41 million.| RELATED VIDEO ABOVE | Audit: Oklahoma State University mismanaged $41 millionA statement from interim President James Hess confirmed that Oklahoma State University has cut funding to The Innovation Foundation and the shared services and facilities positions within it. University officials told KOCO 5 that 12 employees were laid off as funding was cut. “This decision was necessary as the financial structure of The Innovation Foundation is simply not sustainable,” Hess said in a statement to students and faculty. “We are working closely with affected employees to provide transition support during this challenging time.” The audit claims $41 million in funds from the Legislature to Oklahoma State University’s Medical Authority weren’t “properly restricted” and were “co-mingled with other funds.” The funds were for “educational and research activities at OSU,” but the audit says they were “improperly handled” from July 2022 to January 2025. Video Below: Oklahoma State University names James Hess as interim president following Kayse Shrum’s resignationAccording to the audit, there were unauthorized transfers, some of which violated state laws.Three transdisciplinary institutes that operated under The Innovation Foundation– OAIRE, HPNRI and the Hamm Institute for American Energy – will now report to Kenneth Sewell, the Oklahoma State University vice president for research. Sewell will then report to Hess. Top Headlines TIMELINE: Severe storms bring hail and tornado risk to parts of Oklahoma on Wednesday ‘We are devastated’: Edmond North High School mourns death of senior Maddie Hayes Get to know Jordan Ryan, the newest member of the KOCO 5 News Team NASA’s newest space telescope blasts off to map the entire sky and millions of galaxies These natural sleep aids are backed by experts to help you get better sleep
Oklahoma State University officials have decided to discontinue funding for The Innovation Foundation after an audit showed that the university mismanaged $41 million.
| RELATED VIDEO ABOVE | Audit: Oklahoma State University mismanaged $41 million
A statement from interim President James Hess confirmed that Oklahoma State University has cut funding to The Innovation Foundation and the shared services and facilities positions within it. University officials told KOCO 5 that 12 employees were laid off as funding was cut.
“This decision was necessary as the financial structure of The Innovation Foundation is simply not sustainable,” Hess said in a statement to students and faculty. “We are working closely with affected employees to provide transition support during this challenging time.”
The audit claims $41 million in funds from the Legislature to Oklahoma State University’s Medical Authority weren’t “properly restricted” and were “co-mingled with other funds.”
The funds were for “educational and research activities at OSU,” but the audit says they were “improperly handled” from July 2022 to January 2025.
Video Below: Oklahoma State University names James Hess as interim president following Kayse Shrum’s resignation
According to the audit, there were unauthorized transfers, some of which violated state laws.
Three transdisciplinary institutes that operated under The Innovation Foundation– OAIRE, HPNRI and the Hamm Institute for American Energy – will now report to Kenneth Sewell, the Oklahoma State University vice president for research. Sewell will then report to Hess.
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