The University of South Carolina's economic development office has come under scrutiny for misspending a significant amount of federal COVID relief funds. According to findings by the Legislature's auditors, the office's actions have raised concerns about ethical standards and proper oversight. This article delves into the details of the audit and the university's response.

Uncovering the Misuse of Taxpayer Funds at USC

Initial Findings and Mismanagement

The Legislature's auditors discovered that the University of South Carolina's economic development office misspent $1.7 million in federal COVID relief funds. This mismanagement was revealed through a 165-page report released last Thursday. The office, tasked with forming industry partnerships and licensing university research, was found to have engaged in questionable transactions during a six-year period from 2017 to 2023.During this time, the university went through three presidents, including an interim role. The auditors pointed out a lack of oversight and mismanagement, as evidenced by various expenses that did not align with the intended use of the funds. For example, more than $600,000 was spent on contracts for computer labs in Columbia that never opened to the public. About $400,000 meant for marketing the computer labs went to promoting the Economic Engagement office itself. Over $280,000 was paid for salaries of eight employees who did not work on the project, and more than $237,000 was spent on renting a quantum computer in North Carolina without public access. Nearly $150,000 was spent on accessing a university research database that was not provided. Additionally, $4,500 was spent on Apple watches for 11 staff members.

Unopened Labs and Storage Woes

Economic Engagement initially tried to open one of the failed computer labs in a technology incubator controlled by the South Carolina Research Foundation. However, due to poor conditions in the building and a subsequent lease termination, the lab's equipment has been sitting in storage. A second, smaller lab within the South Carolina Research Authority's Ronald E. McNair Center was used for virtual classes but had a limited number of desks and no computers. Despite the university's efforts to open labs across the state, auditors' concerns led to a reallocation of funds to other legitimate expenses related to distance education technology services.

Golf Tournaments, Galas, and Football Games

Another finding questioned the travel expenses of Economic Engagement employees reimbursed with taxpayer dollars. From 2019 to 2023, an office employee attended two galas and four sporting events, including a trip to the Gator Bowl. The office justified these expenses for outreach and networking purposes, but when auditors questioned a business owner, the person denied attending. The employee no longer works for the university, and the report did not name either party.

Questionable Ethics and Agency Failures

The audit also found "examples of questionable ethics and potential violations of the S.C. Ethics Reform Act." For instance, an office official used the business incubator to hire a company for a $675,000 contract despite a conflict of interest identified by the school's audit office. The same company was also given federal COVID money for computer lab access to a university expert database, which was later discontinued due to lack of interest. Economic Engagement continued to pay for the database.In addition to criticizing the university, legislative auditors called out the state departments of Commerce and Administration for not ensuring proper spending of state and federal grants. Former Sen. Dick Harpootlian expressed concern that such mismanagement could put future grant funding at risk and advocated for more regular random audits of state agencies.The university pushed back in its response, questioning the cost of the review and faulting auditors for not interviewing top officials. However, the school has taken steps to improve oversight by transferring the grant management to its central grants office and appointing a new director. The university remains committed to using taxpayer funds prudently and continues its important work in forging business partnerships and encouraging innovation.The former director of the Economic Engagement office, Bill Kirkland, expressed pride in the office's accomplishments during his tenure but took exception to the report's findings.In conclusion, the mismanagement of federal COVID relief funds at the University of South Carolina has raised significant concerns. The university is now working to address these issues and ensure better oversight in the future.

The Denver City Council's recent actions regarding its contract with Caring for Denver have sparked significant discussions. This story forms a crucial part of CPR News' Cash for Caring series. To understand the full context, one can read the first installment here.

Contract Renewal and Transparency

On Monday, the Denver City Council approved a new yet shorter contract with Caring for Denver. This decision was accompanied by a vow to take the next year to review all of the city's sales tax initiatives overseen outside of government. Council members expressed unanimous support for Caring's mission to distribute over $40 million annually in tax dollars approved by voters for mental and behavioral health care grants in 2018. However, City Council President Amanda Sandoval emphasized the need to review all tax initiatives to ensure transparency in fund spending and consistent treatment by the council. "Our goal through this review process will be to implement consistent ordinance language across the board," she said. "By focusing on process and transparency, we aim to provide a solid framework for responsible governance."The original five-year contract of Caring for Denver was up for renewal this fall. After CPR News began asking questions, which led to stories questioning the stewardship of the tax money, the council slowed down the renewal process. A year-long review by CPR News revealed that millions from the program had gone to inexperienced organizations without state-licensed staff and to organizations led by staff with long and recent felony criminal histories.More than 200 organizations have received tax funds through Caring for Denver. On Monday, the council voted to renew the contract for one year. Lorez Meinhold, Caring's executive director, declined to allow CPR News to review any records showing how the organization oversees grantees, citing contract language she and the organization's attorney believe exempts them from Colorado's Open Records Act. This makes it difficult for the public to understand what Caring requires of grantees and how the organization ensures that only Denver residents benefit from the tax money paid by their neighbors. Several grantees receiving funds are located outside of Denver, but this is allowed as long as they serve only Denver residents."We just need to understand the level of transparency," said Council Member Jamie Torres. "Not just of Caring for Denver, but of all the sales tax initiatives." There is nothing in Caring's contract or the ordinance creating the tax that precludes them from releasing records.The council faced a room full of Caring for Denver grantees and their supporters who fought for continued funding and complained about being misunderstood or unfairly portrayed in CPR News stories. One such attendee was Geno Shvedov, executive director of Hazelbrook Sober Living and Caring grantee ParadigmONE. He claims to have invented a program where those who fail drug tests can remain in sober living in houses mostly located in Aurora. "The 'Transitional Safety Zone' is a one-of-a-kind, game-changing program that has literally saved thousands of lives of Denver residents," Shvedov told the council. "These are not just numbers; these are real lives saved and futures rebuilt. These results speak for themselves and are undeniable."Both Shvedov and Caring for Denver declined to let CPR News review any reports or audits showing oversight of ParadigmONE or other grantees. Shvedov acknowledged in an earlier interview that he can only follow former residents for 90 days after leaving his program.More than $6 million has gone from Caring to a pair of sober living companies. Other grants have gone to some of the city's best-known providers with long track records, including WellPower, Servicios De La Raza, and Denver Health.Even with the infusion of $170 million since Caring's overwhelming passage by voters, the number of suicides and overdoses in Denver remains stubbornly high.