Tag: Audit

  • The National Audit Office’s review of UKRI has lessons for the government

    The National Audit Office’s review of UKRI has lessons for the government

    It should come as little surprise – given the scale and complexity of the challenge – that the government sees investing in research and innovation (R&I), and the accompanying promise of new technologies and ideas, as key to achieving its complex policy goals of growing the economy, transitioning to clean power, and modernising the NHS.

    After all, history shows that state backing of R&I to overcome a range of problems – particularly in times of crisis – is hardly a novel idea. If the rapid technological advances witnessed in the 1940s to support the war effort are receding further into the past, then memories of the mass Covid-19 vaccine rollout at least remain fresh.

    With this in mind, the government’s commitment “to promote innovation and harness the full potential of the UK’s science base” through “protecting record funding for research and development” is merely the latest example of those in power acknowledging the vast capacity of R&I to transform society.

    This tradition at least partly explains the strong international reputation the UK has accumulated over the years in the field of R&I, with UK Research and Innovation (UKRI) – the country’s largest single public funder of R&I – at the forefront.

    In 2023–24, UKRI assessed 28,866 applications for competitive grant funding, ultimately spending £6 billion on R&I grants. Its recently approved projects have included funding for very early-stage research in microbial fuel cells and hydrogen purification, and the development of bone stem cell and biomaterial technology to reduce infection rates and the cost of hip repairs.

    In short, UKRI plays a critical role in the country’s R&I ecosystem, supporting cutting-edge work that feeds not only into the government’s environmental and health policy ambitions, but in other areas too.

    And by looking at the effectiveness of UKRI’s grant support, the National Audit Office (NAO) has identified some lessons for government that can serve a very useful, and much broader, purpose when it comes to tackling the major challenges facing the country.

    Lessons learned

    First is the importance of taking a planned and coordinated approach to R&I, which involves using good quality information on funding and knowing how to build a base to innovate in each research area. Government departments should be aware of other organisations with related objectives, determine whether they are also putting funds or resources into trying to innovate in that area, and identify potential linkages with their own workstreams.

    This “portfolio” approach to innovation is a key component in well-managed risk taking, which brings us to our second lesson: the need to establish a clear and effective risk appetite, and put in place the organisational cultures and processes that can support bold decision-making. Innovation – the act or process of doing something that has not been done before – goes hand-in-hand with risk. Embracing it requires the knowledge and the confidence in accepting that things may not turn out quite as intended, or may even fail together.

    The head of the NAO said as much in his recent address in Parliament, where he called on the government to unlock the vast opportunities for boosting productivity and strengthening resilience in the public sector by adopting a fast-learning approach when investing in innovation: in other words, learning quickly what works and what does not, so that failed projects can be promptly scrapped in favour of redirecting energy and resources to more promising ideas.

    Ultimately, a coherent, comprehensive and clearly communicated risk appetite can help organisations reap substantial rewards, more than offsetting the disappointment of unsuccessful ventures.

    Third is the caveat that while a clear plan, coordination and risk appetite can lead to successes, the full benefits of innovation cannot be realised without effective monitoring and evaluation. As well as evaluating programmes on a macro level, organisations should regularly draw together learning by theme (such as in a specific research area), with the support of strong data systems. Doing so can ensure that they effectively capture cumulative learning and develop a well-rounded understanding of which innovations are working well, which ones are not, and why.

    Across the whole of government

    Arguably the most important lesson of all, however, is remembering that these insights cut across the whole of government and need not be strictly applied to the domain of R&I. The projects funded by UKRI may be operating on the frontier of scientific and technological research, but this does not mean that what we learn about their approaches to innovation cannot be applied to other government contexts.

    If government is to achieve its long-term policy goals, it must do more to identify the public spaces where innovation is lacking, and take measures to reverse this trend. This includes breaking down the barriers that are preventing some organisations from adopting the right culture to allow innovation to flourish. It would do well to start with taking on board some of the lessons learned from UKRI’s approach.

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  • Oklahoma State improperly diverted state funds, audit finds

    Oklahoma State improperly diverted state funds, audit finds

    A new report finds that $41 million in state appropriations “were not properly restricted and in some instances were co-mingled with other funds” at Oklahoma State University in violation of state laws and policies, according to an internal audit obtained by media outlets in the state.

    The audit—conducted by an office of the Oklahoma Agricultural and Mechanical Colleges Board of Regents, which oversees Oklahoma State and other public institutions—found “significant issues in the allocation and management of legislatively appropriated funds” at OSU.

    The report found examples of such funds being transferred improperly, including $11.5 million for aerospace, health and polytechnic programs being directed to the OSU Innovation Foundation instead, without a contractual agreement or approval from regents.

    “As a result, some state appropriated funds were utilized for unauthorized and unrelated purposes, and were not retained in full by OSU, the intended recipient,” the audit found.

    A university spokesperson told the Tulsa World that “while the financial decisions and transactions which occurred are concerning, they were isolated and do not impact OSU’s overall financial foundation.”

    The audit also called on Oklahoma State to improve financial oversight and transparency.

    Though the audit did not name former president Kayse Shrum, who resigned abruptly without explanation last month, it indicated the alleged misappropriation happened during her administration. Shrum did not appear to be interviewed as part of the audit, according to a list of individuals who were contacted as part of the investigation into the use of appropriated funds.

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  • Florida equivalent of DOGE to audit state universities

    Florida equivalent of DOGE to audit state universities

    Florida governor Ron DeSantis is launching a state initiative to cut spending and optimize efficiency modeled after the Elon Musk’s federal Department of Government Efficiency, which has cut billions in contracts at federal agencies, The Orlando Sentinel reported.

    Over the course of a year, Florida’s version of DOGE intends to sunset dozens of state boards and commissions, cut hundreds of jobs, and probe university finances and managerial practices.

    “This is the DOGE-ing of our state university system, and I think it’s going to be good for taxpayers, and it’s ultimately going to be good for students as well,” DeSantis said Monday.

    He added that the state would leverage artificial intelligence to help with the initiative.

    The Republican governor also indicated that the state-level initiative would target what he referred to as “ideological study stuff” in an effort to “make sure that these universities are really serving the classical mission of what a university should be, and that’s not to impose ideology. It’s really to teach students how to think and to prepare them to be citizens of our republic.”

    The move comes as the state has already targeted curriculum in recent months, stripping hundreds of courses from the general education offerings of state universities earlier this year. Many of the classes touched on topics such as race, gender, sexuality, and non-Christian religions.

    Florida has also hired multiple GOP officials—some sitting, others who previously served—to lead state universities, including several who have no higher education management experience.

    In a response to DeSantis, who pressed for the need to eliminate inefficiencies, the Florida Democratic Party noted that Republicans have controlled state politics for nearly 30 years and questioned the outgoing governor’s motivations in launching the state equivalent of DOGE.

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  • Audit sheds light on state-issued credit card misuse in the Connecticut college system

    Audit sheds light on state-issued credit card misuse in the Connecticut college system

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    Dive Brief:

    • A state audit of employee spending practices at the Connecticut State Colleges and Universities system found several financial transactions that broke university policies or lacked adequate documentation. 
    • Comptroller Sean Scanlon detailed over $19,000 in spending on food by system Chancellor Terrence Cheng in fiscal years 2022 through 2024, by far the majority of spending on his institutional credit card. Violations included missing receipts, missing guest lists and purchases of restricted items like alcohol.
    • Scanlon’s probe came at Connecticut Gov. Ned Lamont’s request after CT Insider reported Cheng spent lavishly on meals with a state-funded credit card over the past few years.

    Dive Insight:

    The report from CT Insider alleged that Cheng had spent as much as $1,114 at restaurants in a week, and paid for private chauffeurs despite having access to a state-provided car at the time. Once, he spent nearly $500 for the service, the outlet reported.

    Scanlon’s office concluded that “while not technically violating state or university policy, we found that, in the absence of sound, comprehensive policies, the Chancellor utilized poor [judgment] when making P-Card purchases that were especially troubling given the financial stress on the CSCU system.”

    The audit zeroed in on spending on food and transportation by the chancellor. Meals designated as business meetings accounted for 70% of the spending on the official’s card, and some transactions exceeded the $50 meal limit for system employees, the audit found. It also found 18 food purchases with tips deemed excessive — above 22% — which the report noted “is not a policy violation but a questionable use of university funds.” 

    Of the chancellor’s food-related transactions reviewed by the comptroller’s office, 43% had either no itemized receipts or were missing receipts entirely. 

    Among other violations were 30 instances where Cheng paid sales tax. That’s a violation of policy because institutional credit cards — also known as P-cards — are exempt from sales tax but must go through a process with vendors to credit those taxes.

    However, the comptroller found that Cheng did not technically violate policy because as chancellor he can “override the policy at his own discretion.”

    As for chauffeur use, the report noted three times when Cheng — who lives in New York state — paid for a private car service with his P-card, including two trips even more expensive than the one reported by CT Insider. Scanlon determined that these services did not represent violations but said that they “are of note as the Chancellor was provided with a state vehicle for their use.”

    In an emailed statement Thursday, Cheng said that he appreciated the audit’s thoroughness and that the system is “committed to implementing stronger controls, policies, and comprehensive training.”

    The system review also found issues with P-card use by other leaders, including the interim president of Southern Connecticut State University, Dwayne Smith. The audit found that Smith’s P-card “shows a wide variety of infractions spanning almost every category of restricted purchasing and failure to follow many of the policy requirements for documentation and reporting of transactions.”

    Specifically, the comptroller’s office faulted Smith for failing to keep receipts, as well as purchasing tickets to an outside football game without stating its business purpose, among other issues. 

    In an emailed statement, Smith thanked the comptroller for his analysis and recommendations, adding that many of his office’s P-card transactions relate to his community engagement activities. 

    “These meetings have yielded significant support for our scholarship programs, internships, mentoring, and ultimately, enhanced job opportunities for our graduates,” Smith said.

    Scanlon’s audit found many other issues across the Connecticut college system’s staff. His office’s report lists 10 recommended changes the system should make, including reinstating internal audits, establishing a central policy for P-card use, creating accountability measures for card misuse and establishing a policy for vehicle use. 

    “Unfortunately, this audit revealed troubling gaps in oversight and questionable spending practices,” Scanlon said in a Wednesday statement. “Our recommendations provide a clear path forward with more comprehensive policies, consistent enforcement, and greater overall accountability.”

    In his statement, Cheng said the recommendations would “support the goal of accountability and transparency across the system.”

    He added, “The system has begun to take steps in this direction and over the next 100 days, I’ve instructed my team to implement recommendations to improve compliance and reporting.”

    The system’s governing board this fall moved to increase oversight of spending in its central office. As part of that process, the system recently hired a new chief compliance officer and legal counsel.

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