Quantcast
Get breaking news alerts via email

Click here to manage your alerts
Audit: $334 million USTAR effort inflated jobs, revenue
High-tech initiative » Report says the project over-reported jobs it created and revenues it brought in.
First Published Oct 15 2013 03:23 pm • Last Updated Feb 14 2014 11:35 pm

USTAR, hailed as an engine for innovation, has exaggerated — by thousands — the number of jobs it has created and inflated — by millions — the amount of money it has brought in, a new audit says.

The $334 million Utah Science Technology and Research (USTAR) initiative is designed to create jobs and businesses by investing in and leveraging university research.

Photos
Join the Discussion
Post a Comment

"It appears to me that USTAR has been more of just a glitzy way to fund University of Utah and Utah State University research," said Senate President Wayne Niederhauser, R-Sandy, at a Legislative Audit Subcommittee meeting Tuesday. "We could have done that without the glitzy title."

The problems stem from a "compete lack of management," said House Speaker Becky Lockhart, R-Provo.

USTAR was created in 2006 to recruit researchers, promote technology commercialization and build university research facilities with the aim of expanding the number of technology-based start-up companies and high-paying jobs.

It has played a key role in recruiting several prominent researchers to the state’s universities, Niederhauser said.

In a January report, the organization said it had created 3,380 jobs, but about 60 percent of those no longer existed — they were construction gigs at already-completed research facilities. The number of research-based positions, meanwhile, was based on projections rather than actual jobs and auditors could confirm only a fraction of those had actually been created and filled.

The organization also claimed to bring in $463 million in contracts, sponsored research and private donations. But more than half that money, about $268 million, was either over-reported, hardly involved USTAR or represented contracts that hadn’t yet paid out.

Legislators also hoped that USTAR would ramp up revenue from commercializing technologies created at Utah’s universities, but aside from about $33,000 at USU, that hasn’t happened, the report found.

Auditors couldn’t independently confirm that USTAR has helped companies raise $56.7 million in external funding, meanwhile, because those numbers are self-reported by the businesses and there is no mechanism for validating them. In addition, the audit found the USTAR Governing Authority hasn’t always followed the state’s open-meetings laws for keeping minutes and recordings.


story continues below
story continues below

Executive Director Ted McAleer didn’t dispute the findings Tuesday, instead pointing to a revolving door of financial managers in recent years for the bad data.

The auditors have "identified a number of issues we need to take very seriously and address," said McAleer, who previously worked in technology commercialization at the U. "I think the most critical piece of my responsibility as the executive director is I need to hold a finance manager, my assistant, accountable for working with me closely on these recommendations."

During the past seven years, the state has invested $134.2 million from the general fund, $33 million in federal stimulus money and construction bonds worth $116.5 million in the program. Legislators voted Tuesday to refer the audit to several committees in appropriations, business and higher education for action.

Auditors recommended the organization develop a better methodology for tracking and validating reported outcomes such as jobs created, companies formed and commercialization revenue.

"The main message of this audit is we need more structure," said deputy auditor general Rick Coleman. "There’s been the funding, there’s been a lot of good things done, but there needs to be better structure."

lwhitehurst@sltrib.com

Twitter: @lwhitehurst



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Login to the Electronic Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.