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.