Audit of Oklahoma State University Finds Mismanagement of $41 Million in State Funds

TULSA, Okla. –

An audit report released on Wednesday by the Office of Internal Audit at Oklahoma Agricultural and Mechanical Colleges Board of Regents has found significant issues in the allocation and management of legislatively appropriated funds at Oklahoma State University.

The audit concluded that a total of $41 million in state funds received between July 1, 2022, and January 15, 2025, were not properly restricted and were in some cases mixed with other funds, leading to expenditures that did not align with their intended purposes.

The funds were provided by the Oklahoma Legislature to the Oklahoma State University Medical Authority (OSUMA) for educational and research activities at OSU.

The audit details four ways that the mismanaged funds were handled improperly (See Audit Page 4 Below):

$11.5 million of the $41M was transferred to the Innovation Foundation, Inc. without a written contract approved by the OSU/A&M Board as required by state law and Board policy. The Innovation Foundation is a research foundation formerly known as the Oklahoma State University Research Foundation.
$20.5 million $41M were “co-mingled with other funds” according to the report, a practice prohibited by OSU policy and accounting standards.
$24 million $41M were deposited into unrestricted auxiliary funds rather than restricted Education & General funds. The Office of Internal Audit indicates that this appears impermissible under state law.
$4 million $41M was deposited into restricted capital funds but was not specified for the restricted purposes

$55.5 million was the total amount of money appropriated to the Cooperative Agreements. The audit was limited to the $41 million of the 55.5M that had been transferred.

This report comes just a few weeks after OSU’s president Kayse Shrum resigned. The Innovation Foundation’s CEO also resigned a few days after former President Shrum.

In a statement, Lance Lathamn with OSU said:

“OSU remains focused on its land-grant mission to provide accessible education, conduct groundbreaking research, grow the state’s workforce, and deliver high-quality health care for Oklahomans. Newly appointed Interim President Dr. Jim Hess is taking swift action, along with the OSU/A&M Board of Regents, to address these matters. Dr. Hess has underscored that while the financial decisions and transactions which occurred are concerning, they were isolated and do not impact OSU’s overall financial foundation, which remains the strongest among Oklahoma’s institutions of higher education.”