LSU nonprofit affiliate misused millions in funds, audit says

LINK

A cybersecurity research nonprofit affiliated with LSU paid its executive staff millions without approval, misused state funds and possibly retained as an attorney a contractor who wasn’t licensed to practice law, an audit released last week found.

The report from the Louisiana Legislative Auditor said LSU may have violated the Louisiana Constitution and state law by failing to properly oversee the nonprofit Stephenson Technologies Corporation, or STC. The LSU Board of Supervisors approved STC as an affiliate in 2015 to secure federal contracts for the university.

In a statement Thursday, LSU System President Wade Rousse said he had directed Chancellor Jim Dalton to “immediately evaluate STC's sustainability as a partner.”

“The audit clearly reveals significant deficiencies in LSU's past oversight of Stephenson Technologies Corporation leading to considerable funds being misdirected and misused, and those actions do not serve this university's mission or values," Rousse said. "LSU is committed to taking decisive action to strengthen oversight over all of our affiliated organizations moving forward.”

On its website, STC identifies itself as “An Applied LSU R&D Nonprofit” that bridges academic research and national security operations. It contracts with the federal government and other clients to work on tech security issues.

Per the auditor’s report, the corporation paid its former CEO and LSU employee Jeffrey Moulton at least $1.3 million in wages, incentive pay, a golf club membership, condo lease payments and other compensation without the approval of LSU between 2017 and 2022. Moulton was known as a Baton Rouge area cybersecurity expert.

“None of Mr. Moulton’s STC compensation was properly approved by LSU as required by Louisiana law, and LSU policy,” the audit said.

...