USM Research Foundation under investigation

HATTIESBURG, MS (USM) - What began last week as an inquiry into alleged violations by former members of USM's Research Foundation has now become a full-blown investigation, according to State Auditor Stacey Pickering.

According to Pickering, the investigation will focus on the Foundation's management as it relates to specific projects. He would not not the projects, but said his office will be looking into compliance of state and tax laws.

In a statement last week, The University of Southern Mississippi said, "some former members of USM's research foundation may have violated state college board policies."

According to the statement, the state auditor's office would open an inquiry into alleged violations. This inquiry has now become a full investigation into wrongdoing.

In the original statement, President Martha Saunders said she appointed a new Research Foundation board of directors in 2009 after reviewing some prior activities.

The new board concluded some previous actions may have violated IHL guidelines. Saunders said the state auditors office, the attorneys generals office, Mississippi's ethics commission, and IHL were all been notified of the findings.

According to the statement, litigation had already been started.

The following is President Martha Saunders' statement:

 Statement: President Martha Saunders

In 2009, the IHL established new policies relating to the operation of university foundations. To comply with those policies, I reorganized the USM Research Foundation Board of Directors and appointed new members.

Upon reviewing some prior activities and upon advice of counsel, the new Board concluded that some previous actions may have violated IHL policies, and were not in the best interest of the USM Research Foundation or the University. The IHL, the Office of the State Auditor, the Mississippi Ethics Commission and the Office of the Attorney General have been made aware of and briefed on the initial findings. In an effort to correct any potential problems, I have initiated several remedial measures pertaining to university employees. The newly formed board has hired outside legal and accounting experts to assist in conducting its inquiry and to take additional appropriate action.

I was notified yesterday, April 15, 2010, that the State Auditor will open an inquiry into this matter as well.

As litigation has already been initiated by the USM Research Foundation and additional litigation is possible, I am not at liberty to relate any specifics at this time.

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