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Auditor Faber Finds Wright State Applied Research Corporation Improperly Paid Consulting Group over $1.3 Million
Columbus –Auditor of State Keith Faber today released an audit on Wright State Applied Research Corporation (WSARC), which finds the corporation inappropriately paid Ron Wine Consulting Group LLC $1,333,648.
“I continue to have concerns about the system of checks and balances in place at Wright State University and its components,” Auditor Faber said. “These findings and results of previous investigations are strong indicators that previous school leaders should have had a much stronger system of controls in place to prevent mismanagement of funds.”
During their audit, state auditors obtained copies of contracts and invoices associated with the Ron Wine Consulting Group, LLC and noted several instances of improper payment.
From October 2013 through January 2015, WSARC processed and approved 18 invoices for consulting services provided by Ron Wine, totaling $461,198. However, during this time;
·WSARC did not enter into any formal contract with Wine that defined the scope of services, compensation, term, and termination criteria.
·Additionally, the invoices submitted by Wine lacked sufficient detail and supporting documentation on the work performed.
In October 2012, then CEO of WSARC, Ryan Fendley, approved a $400,000 sub-grant agreement with Wine. The parties created the agreement to compensate Wine for consulting services applicable to the Defense Aerospace Graduate Studies Institute performed between October 1, 2012 and December. 31, 2013.
·The agreement expired, but the parties retroactively modified it on March 27, 2015 to extend its performance through April 30, 2015.
·However, the modification did not change the terms of the agreement that included the maximum fee, set at $400,000.
·Dennis Andersh, Ryan Fendley’s successor, signed the modified agreement and the corporation ended up paying Wine a total of $1,132,500, $732,500 over the maximum fee allowed.
Andersh later approved entering into a different consulting services agreement with Wine on May 31, 2015. The purpose of the agreement was to compensate Wine in exchange for consulting services to achieve goals for the Alliance for Human Effectiveness and Advancement and the Aerospace Professional Development Center.
·The agreement was effective from May 1, 2015 through June 30, 2019. According to records, the corporation paid Wine $449,400 under this agreement before it was suspended on January 11, 2016. Between June 2015 and December 2015, Wine was paid $139,950 from the WSARC for program manager and executive support hours.
·Under the agreement, the CEO of the corporation was to pre-approve support services. However, WSARC did not provide any documentation indicating Andersh approved these support services prior to completion of the work.
·The unapproved support services totaled $139,950.
Auditor Faber issued a finding for recovery against Ron Wine Consulting Group, LLC for $1,333,648, with Ron Wine, as acting president, held jointly and severally responsible.
The Auditor’s finding also holds liable WSARC employees who approved invoices and contracts between WSARC and Wine, and Wright State University employees who gave WSARC the authority to do business with the Ron Wine Consulting Group, LLC. The following individuals are jointly and severally responsible to the extent listed below for improper payments.
·Ryan Fendley, former Chief Executive Officer of WSARC, former Senior Advisor to the Provost and former Director of Operations and Strategic Initiatives of the University, totaling $1,193,698
·Dr. Sundaram Narayanan, former Provost of the University, totaling $1,193,698
·Dennis Andersh, current Chief Executive Officer of WSARC, totaling $942,700
·Keith Ralston, former Chief Financial Officer of WSARC, totaling $216,448
The Auditor of State’s office, one of five independently elected statewide offices in Ohio is responsible for auditing more than 6,000 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.