USC audit finds $1.7M in federal grant mismanagement

COLUMBIA, S.C. — A recent report from the state’s Legislative Audit Council (LAC) found that the University of South Carolina’s Office of Economic Engagement mismanaged $1.7 million of federal grant money and potentially violated state ethics codes.

The phrase “questionable mismanagement of funds” was used in the findings of a two-year investigation.

According to LAC Audit Manager John Kesslein, the General Assembly requested an audit in 2022 to look into the actions of the Office of Economic Engagement, the USC/Columbia technology incubator and the South Carolina Research Foundation.

“We did not believe that the expenditures were necessarily consistent with the criteria that would be applied to these expenditures if they were spent appropriately according to the grant protocol, so that was the word we chose,” Kesslein said.

According to the audit report, some money was spent on items such as unopened computer labs for students, fringe benefits for employees and Apple Watches for USC employees.

“It’s not that this sort of thing happens every day, and it doesn’t, but these are just things that we think the money could have been spent on better or differently,” Kesslein said.

So what happens to the items bought with the $1.7 million?

“I don’t know what they are going to do with those. You’d have to ask to the university what their plans are for that,” Kesslein said. “The greater concern [in] drawing attention is that some of the controls should be applied to question the transactions we feel did not work.”

USC President Michael Amiridis released a statement addressing the funds, saying, in part, “The University of South Carolina is committed to prudent use of taxpayer funds, and welcomes good faith reviews of its practices.”

Kresslein said it’s now up to the university to accept recommendations, including having a grant administrator.