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THE DEPARTURE OF DR. KAYSE SHRUM AT OSU
The pressure that ultimately led to Dr. Kayse Shrum’s departure from the Oklahoma State University presidency had been building for months, communications obtained through an Oklahoma Open Records request show.
Shrum resigned Feb. 3 after OSU regents effectively froze accounts related to the Innovation Foundation, an umbrella organization she created for some of the university’s most prominent research institutes.
At issue was the accounting of $41.5 million in state appropriations. OSU regents said the money was improperly juggled among accounts, while Shrum insisted nothing had been done without the knowledge of the regents and the board’s legal counsel.
The emails, provided in partial response to a Feb. 5 Open Records Act request, include almost no messages from Shrum but suggest other administrators initially viewed objections raised by internal auditors as a relatively minor bookkeeping problem.
If so, a Sept. 13 meeting with Michelle Finley, the chief audit executive for the Oklahoma State University and A&M Colleges Board of Regents, likely disabused them of that notion. Finley issued a lengthy list of correctives to Innovation Foundation’s financial relationship with the university.
Still, 11 days later, OSU’s then-interim Senior Vice President for Administration and Finance Eric Polak sent an upbeat note to Finley, asking for an update and saying he had “prepped” the Innovation Foundation’s top two officers, Jerome Loughridge and Elizabeth Pollard, and “just want to make sure we hit the mark and not hold up the audit.”
Loughridge is no longer at the university. Pollard, who resigned as the foundation’s executive director soon after Shrum, said regents and administrators were kept informed of the foundation’s activities.
Polak likely meant the university’s annual external audit for fiscal year 2024, which ended June 30. When issued Nov. 22, the external audit would include a finding that $17 million had been misclassified as unrestricted.
When the external auditors first raised this issue — and what role, if any, it played in the pressure to address a situation that had existed for more than a year — is unclear. The agenda for the Jan. 30, 2025, regents meeting refers to several confidential ethics complaints, but an Open Records request for those complaints was denied.
Of that $55.5 million, $41 million spread out in monthly installments had actually been received by the end of January.
Because the Legislature cannot appropriate money directly to colleges and universities for specific programs, the appropriations were made to the Oklahoma State University Medical Authority, which administers the OSU Medical Center in Tulsa.
OSUMA, as it’s known, then sent the funds on to OSU under the conditions of annual cooperative agreements that specified how they were to be spent.
These agreements included the regents guarantee that “these funds will only be spent to meet the purposes of appropriation made by the Legislature.”
The agreements then listed that year’s appropriations and the program for which they were intended.
OSU administrators, apparently including Shrum, gave this agreement a broad interpretation that allowed for transfer of funds from one program to another, depending on the situation. Some money went directly to the Innovation Foundation, a private entity, rather than OSU.
This does not seem to have been a closely held secret.
Several of the emails and documents obtained allude to the practice without attempt to disguise it. Whether the regents knew or understood the significance is unclear.
It caught internal auditors’ attention, though. They said it violated state law, university policy and the state constitution. For months they issued directions on how to correct the situation.
Shrum has said little since her resignation and declined an interview request for this story. Those around her insist some regents made more of the situation than warranted as an excuse to force Shrum out.
After Shrum’s resignation, the university cut off funds for Innovation Foundation’s shared services and facilities, resulting in 10-15 employees losing their jobs. Last week, officials said the financial tangle is still being combed out.
Of the $41 million at issue, $29.5 million was sent to OSU — as auditors say it should have been — but deposited in unrestricted or improperly restricted accounts and/or spent inappropriately.
The remaining $11.5 million was sent directly to the Innovation Foundation, which the March audit report said was illegal without a contract between it and the OSU regents.
Asked last week for an update, OSU issued the following:
“At this time, we’ve identified at least $11.5 million that will need to be transferred from the Innovation Foundation to reimburse university funds. Additionally, at least $2 million in unallowed expenses have been identified, which will need to be reimbursed from university funds.
“These expenses include, but are not limited to, salaries for Innovation Foundation employees, a transfer to a for-profit entity, Innovation Foundation employee clothing, consulting, Innovation Foundation furniture, Innovation Foundation marketing, etc. These expenses were paid via legislatively restricted funds — a funding source that was never intended to be used for those purposes.”
THE DEPARTURE OF DR. KAYSE SHRUM AT OSU
Emails shed light on financial conflicts before OSU President Kayse Shrum's departure
- May 18, 2025 Updated 2 hrs ago
Randy Krehbiel
Tulsa World Staff WriterThe pressure that ultimately led to Dr. Kayse Shrum’s departure from the Oklahoma State University presidency had been building for months, communications obtained through an Oklahoma Open Records request show.
Shrum resigned Feb. 3 after OSU regents effectively froze accounts related to the Innovation Foundation, an umbrella organization she created for some of the university’s most prominent research institutes.
At issue was the accounting of $41.5 million in state appropriations. OSU regents said the money was improperly juggled among accounts, while Shrum insisted nothing had been done without the knowledge of the regents and the board’s legal counsel.
The emails, provided in partial response to a Feb. 5 Open Records Act request, include almost no messages from Shrum but suggest other administrators initially viewed objections raised by internal auditors as a relatively minor bookkeeping problem.
If so, a Sept. 13 meeting with Michelle Finley, the chief audit executive for the Oklahoma State University and A&M Colleges Board of Regents, likely disabused them of that notion. Finley issued a lengthy list of correctives to Innovation Foundation’s financial relationship with the university.
Still, 11 days later, OSU’s then-interim Senior Vice President for Administration and Finance Eric Polak sent an upbeat note to Finley, asking for an update and saying he had “prepped” the Innovation Foundation’s top two officers, Jerome Loughridge and Elizabeth Pollard, and “just want to make sure we hit the mark and not hold up the audit.”
Loughridge is no longer at the university. Pollard, who resigned as the foundation’s executive director soon after Shrum, said regents and administrators were kept informed of the foundation’s activities.
Polak likely meant the university’s annual external audit for fiscal year 2024, which ended June 30. When issued Nov. 22, the external audit would include a finding that $17 million had been misclassified as unrestricted.
When the external auditors first raised this issue — and what role, if any, it played in the pressure to address a situation that had existed for more than a year — is unclear. The agenda for the Jan. 30, 2025, regents meeting refers to several confidential ethics complaints, but an Open Records request for those complaints was denied.
No attempts to disguise transfer of funds
In setting up the Innovation Foundation, formerly known as the OSU Research Foundation, the university obtained state appropriations totaling $55.5 million over three fiscal years, 2023 to 2025.Of that $55.5 million, $41 million spread out in monthly installments had actually been received by the end of January.
Because the Legislature cannot appropriate money directly to colleges and universities for specific programs, the appropriations were made to the Oklahoma State University Medical Authority, which administers the OSU Medical Center in Tulsa.
OSUMA, as it’s known, then sent the funds on to OSU under the conditions of annual cooperative agreements that specified how they were to be spent.
These agreements included the regents guarantee that “these funds will only be spent to meet the purposes of appropriation made by the Legislature.”
The agreements then listed that year’s appropriations and the program for which they were intended.
OSU administrators, apparently including Shrum, gave this agreement a broad interpretation that allowed for transfer of funds from one program to another, depending on the situation. Some money went directly to the Innovation Foundation, a private entity, rather than OSU.
This does not seem to have been a closely held secret.
Several of the emails and documents obtained allude to the practice without attempt to disguise it. Whether the regents knew or understood the significance is unclear.
It caught internal auditors’ attention, though. They said it violated state law, university policy and the state constitution. For months they issued directions on how to correct the situation.
Illegal arrangement, improper spending
As late as January, officials were trying, with increasing urgency, to figure out how to get the books in order. As events hurtled toward a Jan. 30 showdown during a regents’ meeting in Stillwater, the OSU Foundation — the university’s primary fundraising arm — turned down a request to pay some of the Innovation Foundation’s bills.Shrum has said little since her resignation and declined an interview request for this story. Those around her insist some regents made more of the situation than warranted as an excuse to force Shrum out.
After Shrum’s resignation, the university cut off funds for Innovation Foundation’s shared services and facilities, resulting in 10-15 employees losing their jobs. Last week, officials said the financial tangle is still being combed out.
Of the $41 million at issue, $29.5 million was sent to OSU — as auditors say it should have been — but deposited in unrestricted or improperly restricted accounts and/or spent inappropriately.
The remaining $11.5 million was sent directly to the Innovation Foundation, which the March audit report said was illegal without a contract between it and the OSU regents.
Asked last week for an update, OSU issued the following:
“At this time, we’ve identified at least $11.5 million that will need to be transferred from the Innovation Foundation to reimburse university funds. Additionally, at least $2 million in unallowed expenses have been identified, which will need to be reimbursed from university funds.
“These expenses include, but are not limited to, salaries for Innovation Foundation employees, a transfer to a for-profit entity, Innovation Foundation employee clothing, consulting, Innovation Foundation furniture, Innovation Foundation marketing, etc. These expenses were paid via legislatively restricted funds — a funding source that was never intended to be used for those purposes.”
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