Auditor: WSU group inappropriately paid consulting firm over $1.3M

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COLUMBUS, Ohio (WDTN) – The Auditor of State released an audit Tuesday on Wright State Applied Research Corporation (WSARC), finding that it inappropriately payed a Centerville-based consulting group $1,333,648.

“I continue to have concerns about the system of checks and balances in place at Wright State University and its components,” Auditor of State Kieth Faber said. “These findings, and results of previous investigations, are strong indicators that previous school leaders should have had a much stronger system of controls in place to prevent mismanagement of funds.”

State auditors obtained copies of contracts and invoices associated with the Ron Wine Consulting Group LLC, and several instances of improper payment were noted.

WSARC approved 18 invoices for services provided by Ron Wine, totaling $461,198, but officials say that during this time WSARC did not enter into a formal contract with Wine that defined the scope of services, compensation, term, and termination criteria. Additionally, the invoices are said to lack sufficient detail and supporting documentation about the work performed.

Then-CEO of WSARC, Ryan Fendly, approved a $400,000 sub-grant agreement with Wine on May 31, 2015. The agreement was meant to compensate Wine for services applicable to the Defense Aerospace Graduate Studies Institute performed between October 1, 2012, and December 31, 2013.

The agreement expired, but the parties ended up extending it through April 30, 2015. However, the extension did not change the terms of the agreement that included the maximum fee, set at $400,000.

Fendley’s successor, Dennis Andersh, signed the agreement and wound up paying Wine a total of $1,132,500, which was $732,500 above the maximum fee allowed.

Andersh later entered into a different consulting services agreement with Wine on May 31, 2015. The purpose was to compensate Wine in exchange for services to the Alliance for Human Effectiveness and Advancement and the Aerospace Professional Development Center.

Under the agreement, the CEO of the corporation was supposed to preapprove support services, however, WSARC did not provide any documentation indicating Andersh approved the support services prior to completion of the work.

These unapproved support services totaled $139,950.

Faber issued a finding for recovery against Ron Wine Consulting Group LLC in the amount of $1,333,648.

The Auditor’s conclusions also hold liable WSARC employees who approved invoices between WSARC and Wine, and Wright State employees who gave WSARC the authority to do business with the consulting group.

The following individuals are “jointly and severally” responsible for improper payments listed below:

  • Ryan Fendley, former Chief Executive Officer of WSARC, former Senior Advisor to the Provost and former Director of Operations and Strategic Initiatives of the University, totaling $1,193,698
  • Dr. Sundaram Narayanan, former Provost of the University, totaling $1,193,698
  • Dennis Andersh, current Chief Executive Officer of WSARC, totaling $942,700
  • Keith Ralston, former Chief Financial Officer of WSARC, totaling $216,448

Management and members of WSARC’s board of directors disagree with the findings with respect to Dennis Andersh and Keith Ralston, saying:

“The WSARC Board did a thorough review and found no wrong-doing by Mr. Andersh or Mr. Ralston,” said Gayle Rominger, Chair of the WSARC Board of Directors. “Given the direct instructions provided by their supervisors, they acted appropriately and within the scope of their authority. Mr. Andersh continues to improve procedures, checks, and balances to ensure WSARC’s integrity.”

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