Lawmakers concerned about USTAR initiative after audit indicates issues

Posted at 6:24 PM, Oct 17, 2013
and last updated 2013-10-17 20:24:25-04

SALT LAKE CITY -- A state initiative meant to attract research and innovation at two Utah universities is under fire for a second day in a row.

Lawmakers are angry after an audit revealed USTAR inflated revenue and job numbers.

During a State Senate subcommittee hearing Thursday, some lawmakers who championed the program said they felt betrayed and misled by an inflated return on investment that never really delivered.

The Utah Science Technology and Research initiative (USTAR) was created in 2006.  The state intended to attract jobs and innovation by funneling hundreds of millions of taxpayer dollars into the University of Utah and Utah State University.

However, an audit reveals the success of the program is greatly exaggerated. Auditors reveal millions of dollars in inflated revenue on projects where USTAR was barely involved, or it was projected work.

Auditors also said more than half of the jobs created by the program no longer exist, and many of them were construction positions.  At a Business, Economic Development and Labor Appropriations Subcommittee hearing, lawmakers called the news disappointing and said USTAR needs a major overhaul if the program is going to continue.

"We're not questioning that there's been good things happening at the University of Utah and Utah State, our issues shows there are many areas where management and oversight clearly need to improve," Auditor Brian Dean said.

Gov. Gary Herbert spoke about the issue.

"I haven't had a chance to look at the USTAR audit in detail,” he said. “I think it raises some concerns about the outcomes, what we've done with USTAR. The audit may be a little bit of a distortion as far as what the reality is. Likewise, I don't want exaggeration and hyperbole that we're doing better than we really are, so I'm interested in what the truth is. I think the concept of USTAR is a good one, we just want to make sure we get the best bang for the buck that we can."

USTAR’s Executive Director said there was no intent to inflate data.  He said the program may have inadvertently overly summarized its findings. He also said financial managers have come and gone from the program.

This is already shaping up to be a big story on Utah's Capitol Hill for the upcoming legislative session. USTAR's board will now review the audit and has to report to the legislature.  On Thursday, there was talk of taking the program back to square one, since lawmakers like the concept. Another option is a major overhaul that could include budget cuts and firing managers.