A University of Iowa professor spent nearly $300,000 on research for his private health startup in violation of university policies, according to a special investigation by the Iowa state auditor's office.
But the professor told the Des Moines Register that the university failed to communicate its policies to him and he never intentionally misspent any money.
The report by State Auditor Rob Sand, released Wednesday, July 30, found nearly $295,000 in improper spending from 2016 through 2023 by Dr. Calvin Carter, a member of the University of Iowa's Department of Neuroscience and Pharmacology, and Charles Searby, a research specialist in the Department of Pediatrics who assisted in Carter's research.
"We uncovered nearly $295,000 of improper disbursements for the purchase of items like animals and their care, lab equipment, software, patent, legal work, membership dues and the like," Sand said in a July 30 news conference.
In a statement, Carter said the report's findings "consistently point to institutional failures in policy communication and documentation systems rather than individual malfeasance."
"The idea that I intentionally misused funds is deeply hurtful and patently false," Carter said. "I love my career and have devoted my life to trying to cure cancer, diabetes and advance the science of medicine in Iowa. The university has derailed both my life and my research because of its extremely complicated, wasteful and unnecessary bureaucracies."
Sand said Carter did not spend any of the money for his own use, but the spending violated University of Iowa policies or fell outside the terms of the funding awarded to Carter.
"It does not appear that these funds were put towards personal use," Sand said. "They all appear to have been in the furtherance of research that Dr. Carter was doing. But that said, there’s agreements as there always are between University of Iowa faculty and staff and the university as to how funds can be used and what they can be used for and what we are reporting here are funds essentially being misallocated contrary to the agreement."
"And so Dr. Carter’s going to have some work here to make sure that he and the university are square on where those dollars are and what needs to be taken care of," Sand added.
University of Iowa officials became concerned in June 2023 that Carter was using a university procurement card to pay for services that were for his personal business, Geminii, Inc., according to the auditor's report. The next month, the university asked the auditor's office to conduct a review.
The university placed Carter on administrative leave in October 2023 after its own investigation found "several apparent financial irregularities" and "potential misuse of institutional funds," according to the auditor's report.
Both Carter and Searby are on administrative leave.
"Now that the state audit is complete, these individuals will be afforded due process available to all university employees as restitution and termination options are considered," the University of Iowa said in a statement.
Geminii is a medical device company that works to treat diabetes with a noninvasive therapy using electromagnetic waves. Carter founded the company in 2016 with his brother and one of his postdoctoral research fellows, the auditor's report states, and several University of Iowa employees are also part of the company.
A large portion of the disputed money, more than $128,000, was used on costs related to research on pigs with diabetes which were housed in a facility in Indiana, even though the auditor's report says Carter's project only received authorization from the university to perform research on mice, not pigs.
Carter said he had received approval to work with pigs from the Indiana company he was working to conduct research with, but the report says he also needed approval from the University of Iowa's Institutional Animal Care and Use Committee.
In his statement, Carter said his research on pigs was discussed with and approved by leadership at the University of Iowa.
"Everyone involved supported the pig project as an important next step in the research," Carter said. "In fact, we were awarded an additional $175,000 in funding based on our progress after presenting our results to University leadership."
Carter also spent money on other services that fell outside the University of Iowa's guidelines, including securing a website and URL, even though the university could have provided him with a free domain.
Carter said he followed common practice, hiring a vendor used and recommended by other researchers. He said he received approval from his department and the university's chief information officer.
About $3,000 of the misspent money was federal and the remainder was state funding, the auditor's office said.
Sand said a number of the improper invoices Carter submitted involved university dollars being misallocated and the university could have made sure the person approving those invoices had a better understanding of what the funds could be used for.
Those included invoices addressed to Geminii rather than to the University of Iowa, which should not have been approved. The report states university officials told the auditor's office that staff may have thought Geminii was the name of a project, rather than a separate company.
"While this money was misallocated when it perhaps should have been paid for by his business that’s related to this research, the university at the end of the day had someone who had the capacity to review some of these invoices and did approve them," Sand said.
The report recommends that the University of Iowa strengthen oversight and enforcement of its conflict of interest policy and require sufficient documentation and evidence is submitted for invoices to ensure the money is being spent on valid purposes.
In its statement, the University of Iowa said it fully cooperated with the auditor's investigation and has accepted all the audit's recommendations.
"The university has already made significant changes to its conflict of interest and conflict of commitment policies and procedures, per a recommendation by the state auditor," the statement says. "In addition, the university will implement procedures to ensure sufficient documentation and explanations are provided to verify the validity of charges made to procurement cards."
Carter said he is considering legal options, including potential defamation claims, "in response to the reputational damage caused by the report and related media coverage."
"I’m committed to my students, my colleagues, and the pursuit of science that helps people," Carter said. "But I will not stand quietly by while some administrators try to tarnish my name and the good work we do for Iowans, all over administrative policies and technicalities so obscure that others didn’t know existed either."
Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at [email protected] or by phone at 515-284-8169. Follow him on X at @sgrubermiller.
This article originally appeared on Des Moines Register: University of Iowa professor denies accusation he misspent $295K
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