OSU cuts funding to Innovation Foundation in response to audit results

Oklahoma State University will discontinue funding for its Innovation Foundation which is at the center of an internal audit that found $41 million in misappropriated funds.

The audit was conducted by the Office of Internal Audit at Oklahoma Agricultural and Mechanical Colleges Board of Regents and found significant issues in the allocation and management of legislatively appropriated funds at OSU. The report determined that $11.5 million of the $41 million in misappropriated funds were transferred to the Innovation Foundation, Inc. without a written contract approved by the OSU/A&M Board.

OSU Interim President Dr. Jim Hess made the announcement on Tuesday in addition to other organizational changes at the university

"As many of you have seen in recent news coverage, a state funds audit revealed financial concerns regarding The Innovation Foundation at OSU. While the financial decisions and transactions that occurred are concerning, they were isolated and do not impact OSU’s overall financial foundation, which remains the strongest among Oklahoma’s institutions of higher education.

As part of our work to address issues raised in the audit, we have made the difficult decision to discontinue funding for The Innovation Foundation at OSU and the shared services and facilities positions within it. This decision was necessary as the financial structure of The Innovation Foundation is simply not sustainable. We are working closely with affected employees to provide transition support during this challenging time.

Our three transdisciplinary institutes — OAIRE, HPNRI and the Hamm Institute for American Energy — which previously operated under The Innovation Foundation will now report to Dr. Kenneth Sewell, OSU Vice President for Research. Kenneth will report to me as we move forward and will also oversee Cowboy Enterprises and OSU’s One Health Innovation Lab. This realignment will enhance collaboration between these important units and our broader research enterprise."

Related: What is The Innovation Foundation, and why are they at the center of an OSU audit?

Find More OSU Audit Coverage