LOGAN — A blistering performance audit released by the Utah Office of the Legislative Auditor General states Utah State University must immediately overhaul its internal accountability structures following discoveries of financial noncompliance, misconduct and favoritism.
The report, presented to the Utah Legislature, claims the university suffers from a “history of weak oversight and controls at the presidential and executive leadership level.” Auditors found patterns where leadership and staff bypassed state code and university policies, creating an environment ripe for “asset misappropriation.”
“The nature and number of financial issues identified during the audit were concerning,” the report stated.
Among the most significant findings was a department that renewed contracts with a vendor for over a decade without a documented competitive process, totaling more than $12 million. When the contract expired in 2023, the department reportedly ignored instructions from the purchasing office and signed a new five-year contract with the same vendor in 2024.
The audit also detailed an instance where the president’s office disregarded procurement processes to hire an individual with prior professional connections to the university. The cost of that contract ballooned from an estimated $30,000 to over $100,000 in four months. In another case, the president’s office allegedly attempted to influence a bid to favor a specific vendor that exceeded the budget scope, asking the vendor to lower costs after the fact to change the outcome.
Beyond specific spending irregularities, the audit highlighted a systemic breakdown in governance.
Auditors reported that university leaders “actively weakened” the position of the internal audit team while elevating the role of legal counsel. The report details how leadership removed the internal audit function from the president’s leadership council and cut off their access to the university’s anonymous ethics hotline for over three months. During that blackout period, the university received complaints regarding employee financial misconduct and hostile work conditions.
“It is unclear why leadership removed audit from the hotline during this time,” the audit states, noting that internal auditors were initially blind to 45% of all allegations in 2024.
The report places partial blame on the Utah Board of Higher Education (UBHE) and the Board of Trustees for failing to provide adequate support and oversight. The audit revealed that due to changes in evaluation requirements, USU’s previous president “never received an in-depth evaluation” during their tenure.
The audit also criticized the university’s budgeting model, which auditors argue prioritizes sponsored research over teaching. Because researchers can receive additional resources atop their base salaries through sponsored projects, the system “disincentivizes effective teaching and program development,” according to the report.
The legislative auditor issued 26 specific recommendations, calling for robust succession planning, strict adherence to procurement laws, and the restoration of the internal audit department’s independence and authority.