Idaho State University forked over more than $850,000 of state money for a forensic pathology center that was never built — and for work that was never done.
University officials did this in order to avoid giving the money back to the state, as required, according to a state audit released Tuesday.
Legislative Services Office auditors did not look for evidence of criminal wrongdoing. But they did say Idaho State “misused or misappropriated” $853,700 of state money, and did not set up “adequate internal controls” to manage the funds.
Idaho State returned the $853,700 in January — but nonetheless, legislators still ordered the LSO audit.
The saga began in 2022, when the Legislature appropriated $900,000 for a regional forensic pathology center. Idaho State and Bannock County were supposed to collaborate on the project.
By the time county officials walked away from the partnership, $46,300 had gone into a site assessment and feasibility study. That left the rest of the state money, the $853,700.
Idaho State knew it had to spend the full $900,000 by June 30, 2023. According to an email from one university official — unnamed in the audit — “the cleanest path forward” would be for the county to submit an invoice for the money.
With this invoice in hand, Idaho State turned over the balance, “without evidence” that the county had actually done work on the project, LSO auditors wrote. Even as the project stalled, Idaho State didn’t immediately ask for the money back — even though state law required the university to return any unspent money.
“It appears … that ISU decided that the $853,700 was Bannock County’s resource to manage as they saw fit and no action was needed by ISU,” auditors wrote.
After the Idaho Freedom Foundation questioned the project finances, Sen. Glenneda Zuiderveld, R-Twin Falls, demanded the return of the $853,700 and a legislative audit.
Auditors did not look for evidence of “malfeasance, illegal expenditure of public funds (or) misappropriation of public funds or property.” It would be up to Attorney General Raúl Labrador to investigate misappropriation of public funds.
Labrador’s office did not respond to a request for comment on the audit.
However, one key legislator said Labrador should look into the situation, to determine whether the university’s actions go beyond a mere lapse in judgment.
“I do believe additional work has to be done by the attorney general,” said Rep. Wendy Horman, R-Idaho Falls, co-chair of the Joint Finance-Appropriations Committee.
Horman was quick to say the situation unfolded before January 2024, when Robert Wagner took over as Idaho State’s president. She praised the university administration for cooperating with auditors and responding to lawmakers’ concerns.
“ISU was as interested in transparency and accountability as JFAC was,” Horman said.
In a July 31 letter — added as an attachment to the audit — Wagner and CFO Jennifer Steele said Idaho State was taking the matter seriously. For example, they said the university had created a new in-house oversight team to track state dollars.
“We acknowledge the concerns raised in the report,” they wrote.
Idaho State has no additional comment on the audit, spokeswoman Emily Frandsen said Wednesday.
Gov. Brad Little’s office received the report Tuesday, and is reviewing it, spokeswoman Joan Varsek said late Wednesday. “The governor’s office takes any allegation of misuse of public funds very seriously and will determine if further action is needed after fully reviewing the report.”
