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3 golden objects Minnesota Legislature

Office of the Legislative Auditor - Financial Audit Division

Report Summary
Regenerative Medicine Minnesota


Financial Audit Division Report Released January 2020

Regenerative medicine assists the body’s own ability to heal. Cell and developmental biology, regenerative pharmacology and immunology, medicine and surgery, biotechnology, bioengineering, and other relevant fields, are brought together to develop ways to replace, restore, or regenerate damaged or malfunctioning cells, tissues, and organs to help people return to better health.

The 2014 Legislature provided funding to the University of Minnesota to bring Minnesota to the forefront of regenerative medicine. The Legislature provided $4.5 million in Fiscal Year 2015 and $4.35 million in subsequent fiscal years to establish a “collaborative partnership between the University of Minnesota and the Mayo Clinic for regenerative medicine research, clinical translation, and commercialization.”1 This partnership is now referred to as Regenerative Medicine Minnesota (RMM).

RMM partners created an advisory board to help oversee the program. This five-person board includes two individuals that are not affiliated with the University of Minnesota or the Mayo Clinic. Representatives from the University of Minnesota and the Mayo Clinic serve as co-chairs of the board.

RMM partners use their funding primarily to issue grants. The partners awarded 125 grants, totaling $17.44 million, from the inception of the program through the end of our audit scope, February 2019.

The Office of the Legislative Auditor (OLA) conducted this audit in response to allegations of mismanagement within the RMM partnership. OLA scoped its work to determine whether RMM had adequate internal controls and complied with finance-related legal requirements. The period under examination went from July 2014 through February 2019.

Internal Controls

OLA found that internal controls over the areas in our audit scope were generally not adequate to safeguard assets and ensure compliance with applicable legal requirements. Specifically, this audit identified internal control weaknesses related to proposal evaluations, project awards, and grant project oversight.

  • Finding 2. One proposal evaluator had a conflict of interest.
  • Finding 3. Grant proposals did not always receive an equal level of scrutiny.
  • Finding 4. Administrative errors resulted in inappropriate grant funding decisions.
  • Finding 5. Some grant contracts had inconsistent terms.
  • Finding 6. Grant reimbursement requests lacked sufficient documentation to justify costs and, in one case, included unallowable costs.
  • Finding 7. The Regenerative Medicine Minnesota Board does not review all project deliverable reports.

Legal Compliance

OLA found that RMM provided accurate information in its biennial reports to the Legislature. However, RMM awarded 58 grants that were not authorized in state law. We also found one instance where grant evaluators did not comply with RMM’s conflict of interest policies.

Finally, our audit found instances where grant proposals received unequal scrutiny due to noncompliance with RMM’s proposal scoring methodology.

  • Finding 1. RMM spent some of its state appropriation on grants the state appropriation law did not authorize.
  • Finding 2. One proposal evaluator had a conflict of interest.
  • Finding 3. Grant proposals did not always receive an equal level of scrutiny.

1 Laws of Minnesota 2014, chapter 312, art. 1, sec. 4, subd. 2.

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