ISU investigation: Former RISE Complex director misused university funds

POCATELLO — As the financial review of the Idaho State University RISE Complex is nearing its conclusion, university officials say they have found problems related to the spending of research and contract funds.

ISU says the law was broken, and university policies weren’t followed in the use of public funds and conflicts of interest.

In September of 2016 ISU began a review of the financial operations of the RISE (Research and Innovation in Science and Engineering) Complex.

Most of their findings pointed to one man, Dr. Eric Burgett, former director of the RISE Complex. Dr. Burgett was removed as director when the investigation began, and he resigned from the university the following day.

The investigation went back as far as 2010 and found that Burgett misused thousands of dollars of university funds and performed private consulting, which caused a conflict of interest.

“We had some weaknesses where we can do better in some areas and where we need to be vigilant when it comes to conflict of interests and disclosure of relationships,” said Kent Tingey, vice president for University Advancement.

The investigation also found Burgett had a previous relationship with a company called ScanTech, which he works for now.

ISU performed multiple research projects for ScanTech but was never fully reimbursed for its work, and when Burgett left ISU for ScanTech, there was an unpaid balance of over $628,000.

“What has been going on over the course of the last year demonstrates that we all take responsibility and we care what happens,” says Tingey. “This was reviewed, actions were taken and actions may still be taken.”

The review also found that Burgett performed private consulting for MD Anderson at the University of Texas while using ISU equipment and supplies, which wasn’t disclosed to or approved by management.

He spent almost $16,000 of university funds for equipment, supplies and travels, even though he was reimbursed by MD Anderson and he still was paid for his travel by ISU, according to the investigation.

“We reviewed 200,000 documents, emails and documents, the fact there was immediate changes in personnel, and the fact we are reviewing these policies, shows how serious the university takes these types of actions,” said Tiney.

ISU has taken its findings to the Bannock County Prosecutor’s Office, where charges could be filed.

The university says it will use this incident to review its conflict of interest and private consulting policies with the entire staff.

Here’s its statement:

In July 2016, Idaho State University’s Office for Research, during routine financial and operational reviews of the Research and Innovation in Science & Engineering (RISE) Complex, found evidence of what were believed to be financial discrepancies related to the spending of research and contract funds. On July 21, Dr. Neels Van der Schyf, Vice President for Research and Dean of the Graduate School, and Brian Hickenlooper, then Assistant Vice President for Finance & Administration, met with financial personnel from the RISE Complex to have these concerns addressed directly. Based on the response of the RISE personnel at that meeting, Dr. Van der Schyf decided that the financial operations of the RISE Complex should be reviewed immediately.

The ISU Office for Research, in conjunction with the Office for Finance & Administration, began a review of the financial operations at the RISE Complex. This review, which revealed that revenues were not sufficient to cover expenditures, led to personnel reductions that occurred in mid-August. As part of the review process, the RISE Complex University Business Officer (UBO) was reassigned. In the course of this review, evidence emerged that raised concerns regarding the management of the RISE Complex under then-Director Dr. Eric Burgett.

As a result, on September 15, 2016, Dr. Van der Schyf removed Dr. Eric Burgett as Director of the RISE Complex and returned him to his position as tenured faculty. Also on September 15, and with the support of President Arthur C. Vailas and Executive Vice President & Provost Laura Woodworth-Ney, Dr. Van der Schyf asked the Director of Internal Audit, Mr. Reese Jensen, to conduct a comprehensive review. Mr. Jensen functionally reports to the Idaho State Board of Education Audit Committee. This review was to include all activities at RISE Complex, including funding, personnel, travel, and third-party relationships. Dr. Burgett tendered his resignation from Idaho State University on Sept. 16, 2016.

The review by Mr. Jensen has been thorough and encompassed not only interviews of employees but also included a review of nearly 180,000 emails and documents. Because of the large scope of the investigation, ISU auditors divided the investigation into separate reports. Although the entirety of the internal review is not finalized, the Office of General Counsel has received a request for records and released them under the Idaho Public Records Act. The reports that have been completed indicate that there were violations of Idaho state law and university policies and procedures regarding the use of public funds and conflicts of interest.

University administration recognizes that there was a lack of compliance at the RISE Complex. As part of ISU’s commitment to a culture of compliance, the internal auditors will conduct a university-wide conflicts of interest audit. ISU has also instituted a conflicts of interest training for all faculty and staff that is to be completed by Dec. 31, 2017.

Click here for the audit report.

This story first appeared on KPVI. It is used here with permission.