|Public Release Date: September 9, 1994||No. 94-44|
The Agricultural Utilization Research Institute (AURI) was established in 1989 as a nonprofit corporation. It was formed to promote the establishment of new products and product uses and the expansion of existing markets for the state's agricultural commodities and products. AURI is governed by an 11 member board of directors. The board appoints an executive director to administer the institute. Richard Nelson has served as executive director since August 1991.
Reserves and Investments
AURI has maintained a significant fund balance since becoming an independent entity in 1989. It carries forward reserve balances from year to year. AURI's total fund balance at September 30, 1993, was $4.2 million, a decrease from the September 30, 1992, total of $5.7. AURI invests its fund balance and idle funds in various types of investments. The market value of investments at September 30, 1993, was $6.1 million.
We found that AURI properly accounted for investment of reserve fund balances and related investment income. However, we believe controls over the investment process should be improved. AURI does not have a board approved investment policy or a formal agreement with its external investment manager, and it does not monitor investment performance and provide periodic reports to the board. In addition, AURI has not adequately separated the duties associated with investment activities.
Payments to Projects
AURI provides technical expertise and financial assistance for new product research, development, and commercialization. The institute provides financial assistance through reimbursement of costs incurred on approved projects. AURI disbursed $4.3 million in project payments during fiscal years 1992 and 1993. We found that AURI did not ensure that grantees submitted required quarterly reports before processing some contract payments.
AURI employee payroll and related benefits totaled $1.6 million in fiscal year 1993. We found that AURI properly processed and adequately controlled payroll transactions.