Saskatchewan·Exclusive

U of R failed to probe red-flagged spending for 15 months

The University of Regina acknowledges it failed to investigate possible "inappropriate activities or poor practices" in the faculty of engineering for 15 months, despite having discovered $1.8 million in questionable overspending.
Tom Chase, a senior official at the University of Regina, says work continues on spending issues identified in reports. (University of Regina)

The University of Regina acknowledges it failed to investigate possible "inappropriate activities or poor practices" in the faculty of engineering for 15 months, despite having discovered $1.8 million in questionable overspending.

The U of R's provost Tom Chase says, "some things unfolded in ways that they probably should have not, and what we're trying to do now is to ensure that that is examined very carefully by an outside party, in this case the provincial auditor."

In January 2012, an internal report dubbed "Report on Discover Project - Phase 1", uncovered $1.8 million in overspending in the faculty of engineering.

The report, obtained by CBC News, was commissioned by senior U of R administration and conducted by financial services staff.

The report indicates the overspending happened between 2006 and 2011, despite warnings from the university’s bookkeepers.

"Although Financial Services has notified the required parties of these overspent accounts over the years, the issue has not been addressed until now," the report says.

Chase said when the overspending was discovered, "We launched a fact-finding investigation to see what was going on. We put a stop to it."

In addition, he said, the university has put in place "fairly careful controls on that faculty to ensure that it will not occur again."

University did not investigate further

"However, Chase acknowledges that for 15 months, the university failed to follow several recommendations of the internal report."

No fewer than seven times, the authors urged the U of R to undertake further investigation into the breadth of the problem and the reasons for it.

"Many conclusions could not be determined due to the scope limitations identified," the authors explain. "Therefore further work will need to be completed in these areas."

The authors of the report say this investigation was hampered in several ways.

None of the members of the faculty of engineering were interviewed or even contacted for this review.

And the authors point out that they had limited time in which to conduct the probe.

As a result, they conclude "a definitive answer regarding the presence of inappropriate activities or poor practices in certain areas of the faculty is not available."

And yet, Chase acknowledged to CBC that the university has not done any of that follow-up work.

"There are many things, many things, in this complex file that need attention," Chase told CBC.   "And we are trying to do due diligence in as cautious and complete a way as we can."

Chase says the university has exercised due diligence by bringing in the provincial auditor to investigate these matters

He says on April 10, 2013, the university provided her with a copy of the "Report on Discovery Project".

CBC first contacted university administration about the Discovery Project on April 2, 2013

UILO reviewed for 'irregularities'

The University Industry Liaison Office receives special scrutiny in this report.

Until it was shut down in 2012, the UILO was responsible for helping U of R researchers take their inventions through the patent process and to the marketplace.

The UILO has been in the centre of some controversy in recent days.

Its director, Ian Bailey, was accused of conflict of interest in the case of IPAC-CO2 and he was the president of a secret company, Gen-Five, which was attempting to negotiate a carbon capture deal with two private companies.

In this latest report, the authors list 10 different instances of engineering funds being spent by UILO, totalling about $800,000.

"There are multiple transactions that have been identified as possibly not being reasonable," the report says. It concludes "further scrutiny of records are required."

For example, the report's authors aren't able to identify the purpose behind $81,000 that flowed from IPAC-CO2 to Ian Bailey.

And they also don't understand what happened to payments of $111,000 and $50,000 from private companies that were supposed to flow to engineering accounts, but instead appear to have gone to UILO.

With files from CBC's Geoff Leo