Comptroller's Audit Finds SUNY Research Foundation Allowed Statewide Abuse

New York State's SUNY Research Foundation abused taxpayer dollars and employed questionable hiring practices over several years, according to a report released Monday by state comptroller Thomas DiNapoli.

“For too long, SUNY Research Foundation employees took advantage of lax oversight to cheat taxpayers, skirt state laws and violate the foundation’s own policies,” DiNapoli said in a statement. “The Research Foundation needs to vastly improve its internal controls, budgetary oversight, and ensure compliance with all relevant laws and policies. The foundation needs to recover all misspent funds immediately and fundamentally change how it operates.”

Among the report's findings:

In September 2010, a state retiree, who had returned to employment at SUNY Stony Brook, was hired by the Research Foundation and placed on the Research Foundation payroll when the retiree’s compensation on the Stony Brook payroll neared the $30,000 cap. It appears that the hiring by the Research Foundation was to enable the retiree to avoid the retirement and Social Security law limitations.

The audit also found Edgar H. Turkle III, a senior SUNY Research Foundation official at Buffalo State College, charged more than $130,000 in 348 instances for personal spending on his foundation-issued credit card between November 2007 and November 2011. He has been fired and the case is being handled in criminal courts. The audit also found nearly $3 million in contracts that "involved a potential conflict of interest and violated Research Foundation policy."

SUNY Chancellor Nancy Zimpher said in a statement that the result of the audit "is a markedly improved organization."

“From the beginning, SUNY and RF leadership have viewed the audit as an opportunity to acknowledge past problems and pledged full cooperation," she said. "The comptroller’s findings are confirmation that change was necessary."

Zimpher said the foundation has implemented new policies and procedures in response to the audit, which was conducted between July of 2008 and January of 2012. Among those changes, she said the foundation did the following:

Instituted new protocols that raise the standards of accountability of officers and employees alike, and set clear expectations of ethical behavior; reviewed its policies and procedures relating to procurement, contractual and transactional work across the operation; strengthened its governance and attracted new members to its Board of Directors, each of who brings different and diverse skill sets and valuable expertise to the table.

The SUNY Research Foundation was established in 1951 as a private, nonprofit
educational corporation that would support research and discovery at its 30 colleges and universities. Headquartered in Albany, it is governed by a 15-member board and the state's chancellor of education serves as ex officio chair. It manages nearly $1 billion in SUNY research activity each year.