Wright State research corporation illegally paid consultant, auditor finds

Wright State University
Posted at 12:43 PM, Jul 30, 2019
and last updated 2019-07-30 13:02:30-04

DAYTON — A corporation created by Wright State University to serve the school’s research institute illegally paid a former consultant more than $1.3 million, a report issued today by the Ohio Auditor of State shows.

The Wright State Applied Research Corporation processed and approved 18 invoices for consulting services provided by Ron Wine Consulting Group, LLC from October 2013 to January 2015, according to the auditor’s report.

WSARC made the payments despite not having a consulting agreement in place to define the scope of the services the corporation was paying for. The invoices submitted by Ron Wine Consulting also “lacked supporting documentation detailing the work performed,” the report states.

The Dayton Daily News originally revealed Wine’s questionable dealings with Wright State in 2015. Our reporting brought to the auditors’ and the public’s attention the fact Wine was invoicing Wright State for millions of dollars despite a lack of written contracts and loose oversight of Wine’s firm by WSU officials.

Wright State spokesman Seth Bauguess said via email that the university could not directly comment on the auditor’s findings because of ongoing litigation in the Ohio Court of Claims and the Greene County Common Pleas Court.

"These findings arise from investigations that were conducted in 2015 and findings that were identified in Wright State University’s Plante Moran Report,” Bauguess said for the university. “Wright State has since thoroughly addressed and corrected these issues. Over the last four years, the university has made sweeping changes and has strengthened the university by implementing compliance and transparency reforms.”

The state auditor also found that three former employees and one current employee of WSARC are liable for the improper payments to Ron Wine Consulting Group.

Dennis Andersh, current chief executive officer of WSARC and executive director of the Wright State Research Institute, is liable for up to $942,700, according to the report.

Former provost Sundaram Narayanan and former WSARC CEO Ryan Fendly are each liable for up to nearly $1.2 million. Former WSARC chief financial officer Keith Ralston is liable for up to $216,448, according to the auditor’s report.

As a consultant for Wright State, Ron Wine has said he brought in at least $134.7 million — $69.5 million in federal funding and $65.2 million in state funding — but was only paid $2.2 million of the $6.7 million he was owed when his work was terminated in 2016.

Wine has filed a lawsuit against the school for $4.5 million claiming he had a verbal contract with former WSU president David Hopkins obligating the school to pay him 5 percent of every dollar he helped bring in. Hopkins has denied making such a deal, though at least one university administrator says Wine was paid under it.

An Ohio Inspector General’s investigation that concluded in December 2017resulted in a report questioning $1.8 million of the $2.2 million WSU paid Wine.

Wine’s multi-million dollar lawsuit was filed as the university fights to keep financial woes from dragging it down. Years of overspending forced WSU to reduce its expenses by around $53 million in fiscal year 2018, marking the first time in six years the school didn’t spend more money than it brought in.

The release of the auditor’s findings today comes just over four months after the state auditor found that Wine’s consulting group was improperly paid $73,750 by the university from April 2013 to July 2013 for invoices associated with a purchase order, according to the audit.

As with the most recent findings, the report issued in March found that WSU did not enter into an agreement with the consulting group that would have defined the scope of services it was to perform. Invoices submitted by the consulting group did not provide documentation with details of the work performed, according to the report.

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