'I could not have anticipated that I would be serving under these circumstances': Board of Regents member Addresses OSU audit

In response to an open records request, Oklahoma State University released an audit report on March 5th that showed the mismanagement and misallocation of $41 million in state funds at OSU from July 1, 2022, to January 15, 2025.

The report finds OSU's Innovation Foundation at the center of the mismanaged money. Jennifer Callahan, the Chair of the Governance Task Force was confirmed as a member of the Board of Regents in July, and she says she was asked to be on the board of the Innovation Foundation shortly after, but never officially attended a meeting because of concerns.

She ultimately made the motion to freeze the funds of the Innovation Foundation in January. After the regents meeting on Friday, Callahan answered questions from the press.

Is the money back in the proper accounts?

It's quite a bit of dollars, right? So, I mean, they're in the process of this…You know, you've seen the audit report, it's identified the dollars. And then it's the process of returning to restricted funds, but, missing? I don’t know exactly what that means, but dollars were spent.

What was the impact of the programs and efforts that the money was intended for?

I mean, that's our commitment. And Dr. Hess’ commitment is that as we work to, to rectify this, that that there isn’t a negative impact.

Is there a victim here?

I guess I don't really look at things like this in an individual capacity, right? I think that this is a big, important institution and system. And so the mechanisms and the things that are in place, and the need for these governance checks and balances, ensures that the institution continues to fulfill its mission, which is to students, quite frankly.

What were these funds used for?

The audit has identified that those were transferred over to the Innovation Foundation instead of where they were supposed to go. You know, how those funds were utilized is subject to further review.

Part of the report said OSU spent $1 million of OAIRE-restricted funds for Innovation Foundation Executive/Administration compensation. Was that for their salaries?

Yes.

TIMELINE: What led to the OSU audit?

What exactly does the Innovation Foundation do or was supposed to do?

Good question. I think the report speaks specifically to the transfers. The report speaks to the state laws that were violated. There are specific provisions as it relates to what do you want to call them? Auxiliary or affiliated entities. And there is a heightened level of scrutiny and I think for good reason that when taxpayer dollars are transferred to even if it’s a 501C3, is a private entity. There are safeguards that need to be in place.

Do you think there will be another report once that further review happens?

Potentially, we have to drill down on that both with internal and external audits.

How much responsibility did former OSU President Kayse Shrum have in this?

Well I would refer you to the audit report and emails and correspondence that’s been provided with respect to the opens records requests.

In a statement Dr. Shrum wrote "to my knowledge, absolutely nothing was done that was wrong or inappropriate. My training is as a physician, I am not a lawyer, and I relied upon the same legal advice that the Board of Regents were given."

By The Numbers: Breakdown of OSU Audit

How much responsibility did Elizabeth Pollard, the now former CEO of the Innovation Foundation, have in all this?

Well, I mean we know what her title was right? I think the audit report speaks for itself and I think those emails do as well.

In a statement Elizabeth Pollard wrote "we stand by and are proud of our accomplishments. When given the opportunity to review any audit findings, I’ll look forward to sharing my recollection of events. No funds are missing to my knowledge.”

Do the Board of Regents hold any responsibility? Dr. Shrum said in a statement “The transfer of funds from OSUMA to OSU was approved by the Board of Regents with input from legal counsel.”

Well, you’d probably have to see what was actually communicated to the regents before you decide responsibility.

What happens next, and could criminal charges be filed?

We’re still processing the findings so, in terms of what happens after that, we absolutely want transparency, and we will identify if we need to work with state audit. They have the audit now. Now granted they’ve had it for two seconds. But we’ll work with state agencies as they feel appropriate.

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