UMN misallocated millions in grants, according to state report

A legislative audit found a state-funded University grant program inappropriately awarded money, among other issues.

The Minnesota State Capitol as seen on May 13, 2013.

Bridget Bennett, Daily File Photo

The Minnesota State Capitol as seen on May 13, 2013.

Mohamed Ibrahim

Following allegations of mismanagement within a University of Minnesota grant program, an audit by state officials has raised questions about transparency.

A report by the Office of the Legislative Auditor released earlier this year found several discrepancies in grant allocations and conflict of interest concerns with the University’s Regenerative Medicine Minnesota program. University officials say they will address the finding, but the report has rekindled some lawmakers’ concerns about how the University spends state funding.

The RMM program, a partnership between the University and the Mayo Clinic, awards grants to researchers studying regenerative medicine, or the process of helping the body regenerate damaged cells, tissue and organs. RMM does not agree with all of the findings of the report, according to a letter included in the audit. 

The state allocated $4.5 million to the program in its first year in 2014 and $4.35 million every year after, totaling nearly $22 million in grants as of this month. An appropriations law enacted by the Legislature in 2014 requires the grants to be awarded for research, clinical translation and commercialization. 

The audit found that 52% of education grants were allocated as K-12 grant, which auditors concluded violated the appropriation law. In some cases, grant money went to expenses including activity books and youth science camps.

In a Jan. 8 letter to the OLA in response to the audit, the RMM board contested the findings, arguing education spending is acceptable under the law. 

“We believe the conclusions reached by OLA carry judgments that reach beyond the governing legislation and thereby do a disservice to the diligence and good faith of those advancing the mission of the RMM partnership,” the letter reads.

The report also found that RMM applied different levels of scrutiny to grant applications and made scoring errors that led to some proposals erroneously awarding funding over others.

The University and Mayo Clinic provided inconsistent contracts for the same grants, according to the report. Findings also included inconsistent documentation and a conflict of interest involving a grant evaluator.

“The key is that we want to make sure that anyone receiving state funding for grants, that they’re spending that money appropriately and for what we deem as allowable activities,” said Lori Leysen, OLA audit director and one of the auditors who compiled the report.

Sen. Jim Abeler, R- Anoka, a member of the Senate higher education finance and policy committee, called the findings “extremely disappointing.” 

“As nice as it is to educate grade schoolers on science, that’s not the point,” Abeler said. “Certainly we don’t want to dictate what they do, but we’re the only voice the taxpayers and the people of Minnesota have to the U to guide them.”

Though the RMM board disagrees with the OLA report’s conclusions, board co-chairs Jakub Tolar and Andre Terzic said in an emailed statement Tuesday that the program is taking steps to address the report’s findings.

The proposed changes include suspending K-12 grant awards indefinitely and adjusting the grant proposal review process.

“This statewide, bipartisan initiative has made great strides in advancing regenerative science, training the workforce of the future, rolling out clinical trials and investing in new biotechnology,” the statement reads. “Regenerative Medicine Minnesota looks forward to working with the Legislature and the people of our state as we pursue next generation regenerative therapies for the benefit of all Minnesotans.”