Despite Citizen Opposition;
K-State administration welcomes release of regents report
The report detailing financial practices at K-State under Wefald, Krause,
Conflicts of interest were built into the structure of a Kansas State University business incubator led by former vice president for institutional advancement and athletic director Bob Krause.
That's one of the findings in a formerly confidential report released today by The Kansas Board of Regents.
The report details financial practices for K-State's non-state funded initiatives under retiring president Jon Wefald, including the alumni association, a golf course management and research foundation, a business incubator and aspects of the athletics department.
Kansas State University's new administration enthusiastically greeted the Board of Regents' release Friday of its April 27 exit audit of the university.
"We agree with the regents that it is the correct decision to release this report in a spirit of openness and transparency," K-State president Kirk Schulz said. "Our new administration is working to rebuild the confidence of our alums and constituents.
"Getting this information out into the open should help with that."
Although the auditing firm, Grant Thornton LLP, praised Wefald for increasing enrollment, raising the university's academic profile and helping bring
a national bio and agro defense research center to Manhattan,
it also noted that he delegated many responsibilities to Krause, which led to a "blurring of the lines" between the many entities Krause oversaw.
"The concentration of influence under Mr. Krause has resulted in an informality with regard to how the University and some of its related entities interact and transact," the report noted. "This has raised suspicions among the interested parties with regard to the intent behind various transactions that we researched."
The auditing firm detailed many instances in which those transactions were not documented appropriately.
In particular, the report noted that the National Institute for Strategic Technology Acquisition and Commercialization, an incubator for new businesses, allowed its directors and officers to own stock in and serve on the boards of companies the incubator launched -- a practice Grant Thornton said K-State should closely monitor for "duality of interest."
Some of Krause's athletics decisions have been quite costly, such as his so-called "secret" $3.2 million deal with former football coach Ron Prince -- which wasn't included as part of the audit findings.
"Dr. Schulz and I support the regents' decision to release this information," K-State athletic director John Currie said. "It's important to me that the athletics department, as an integral part of this university, operates as transparently as possible."
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