After the Office of Internal Audit for the Oklahoma Agricultural and Mechanical Colleges Board of Regents released its findings this week of a $41 million misallocation of state-approved funds at Oklahoma State University, multiple executive changes, including the university’s CFO, have taken place.
Chris Kuwitzky, CFO at the University of Oklahoma for more than 30 years until 2018, has been named finance chief of OSU. Most recently, he was vice president of fiscal and administrative affairs at Langston University, the state’s only historically Black college or university and, like OSU, operates under the Oklahoma A&M system. His tenure at OSU will begin on March 17.
During Kuwitzky’s tenure at OU, the university faced numerous financial challenges, an issue that has become increasingly common at both private and public institutions across the U.S. His deep experience with higher education finance in Oklahoma likely played a role in his hiring.
The audit on OSU found that funds received from July 1, 2022 through Jan. 15, 2025 “were not properly restricted and in some instances were co-mingled with other funds, leading to expenditures that were not aligned with the restricted purposes.”
The misallocation occurred under former university President Kayse Shrum and soon-to-be former interim CFO Eric Polak. The timing of Shrum’s resignation, along with that of former executive director of the university’s Innovation Foundation, Elizabeth Pollard, have been speculated upon, as both departures came just weeks before the audit’s findings were published.
On Feb. 2, Shrum abruptly resigned after serving for just over three and a half years. She has since denied allegations of any wrongdoing. Shortly after Shrum’s resignation, Pollard also stepped down. Pollard led the Innovation Foundation, formerly the Oklahoma State University Research Foundation, whose funding practices are a contributor to the $41 million misallocation.
Audit and failure of financial controls
Though Polak’s future at the university has not been announced, the audit found that funds were misallocated under his and Shrum’s leadership to the university’s Innovation Foundation in violation of multiple accounting standards and Oklahoma A&M policies.
Auditors also noted that more than 95% of the foundation’s funding came from money appropriated to the OSU Medical Authority. OSU has since shut down the foundation, citing an unsustainable financial structure.
“This decision was necessary as the financial structure of The Innovation Foundation is simply not sustainable,” interim President Jim Hess, who has the “full support” of OSU leadership, wrote in an open letter to colleagues earlier this week.
Auditors reported that $11.5 million of the $41 million misallocation was directed to the Innovation Foundation. The funds were unauthorized because there was no written contract between OSU and the A&M board, according to the report, which cites:
- 70 O.S. §4306(C): Prohibits state funds from being transferred to foundations without documented reimbursement agreements.
- Article 10, Section 15 (Oklahoma Constitution): Forbids public funds from benefiting private entities without proper agreements.
- Board Policy 1.12: Requires board approval for institutional financial transactions.
Auditors also found that more than half of the misallocated funds — $24 million — were improperly transferred to unrestricted auxiliary accounts. Education and general funds were used to finance these accounts, which are typically reserved for self-sustaining operations such as dining services, athletics, bookstores and campus parking.
The laws and institutional policies violated, according to auditors, include:
- 70 O.S. §3901: Limits state-appropriated education funds to their designated purposes.
- NACUBO Farm 363: Governs the categorization of government appropriations.
- OSRHE Red Book 4.3.3: Prohibits education and general funds from subsidizing auxiliary enterprises.
Additionally, auditors found co-mingling of restricted and unrestricted funds totaling more than $20 million, violating financial transparency and spending requirements. The accounting standards and OSU policies violated include:
- OSU Policy 3-0201: Requires separation of restricted and unrestricted funds.
- GASB 34: Prohibits improper fund blending in government accounting.
- GASB 46: Governs financial restrictions for public institutions.
- NACUBO 205.42: Requires strict classification of funds in higher education.
The audit also found $4 million in a restricted capital account with no intended use, violating OSU policy and GASB regulations, which require restricted funds to be clearly designated and used only for their intended purpose.
The relevant policies include:
- OSU Policy 3-0201 (Sections 1.01 & 7.03): Requires restricted funds to be used only for their legislated purpose.
- GASB 34: Mandates accurate fund categorization in public accounting.
- GASB 46: Ensures compliance with financial restrictions.
- NACUBO 205.42: Governs proper fund usage in higher education.
