Wednesday, January 30, 2013

State audit calls for extensive reforms of Texas’ cancer-fighting agency
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State Auditor John Keel (File photo)
Update at 2:25 p.m. by Daniel Lathrop: Now you can read the audit for yourself.
AUSTIN – Legislators should consider several changes in state law to make Texas’ cancer-fighting agency more accountable and transparent to taxpayers, according to a state audit obtained Monday by The Dallas Morning News.
The audit lists problems in seven major areas, from how the Cancer Prevention and Research Institute of Texas makes grant decisions to how it monitors how public dollars are spent.
“Weaknesses in CPRIT’s processes reduce its ability to properly award and effectively monitor its grants,” state Auditor John Keel concludes in the report.
The audit calls on the state agency, which is under criminal and civil investigations, to ensure that all decisions are free from real or apparent conflict of interest.
The report says CPRIT’s management “generally agreed” with the audit’s dozens of recommendations.
Bill Gimson, who resigned last month as CPRIT’s executive director, discussed grant recommendations with some members of the agency’s Oversight Committee before presenting recommendations to the 11-member panel. The audit, as is typical with its practices, does not identify the Oversight Committee members involved.
Also, auditors identified two members of CPRIT’s commercialization review council who had financial and personal interests in certain grant recipients. The audit also does not identify them.
One review council member also was a member of the board of directors for a grantee that received a $25.2 million research award, a nonprofit called the Statewide Clinical Trials Network of Texas, or CTNeT, which has offices in Dallas and Houston.
Another member of the review council worked as a consultant for two applicants applying for “incubator” grants. Incubators are designed to link research and business opportunities.
The person, however, was not listed as taking part in the review of incubator grant applications and neither applicant ultimately submitted a formal request for funding, the audit says.
The state auditor says CPRIT reports it does not receive final information about donors to the CPRIT Foundation – a nonprofit group formed to supplement funding for the state agency — or the donation amounts. But CPRIT has no assurances that it is not awarding grants to donors, which would create a conflict of interest, the audit says.
“CPRIT’s lack of controls for ensuring there are not any business or professional relationships between its peer reviewers and grantees impairs CPRIT’s ability to ensure the public that its award decisions are not improperly influenced,” according to the audit.
The audit notes two controversies revealed last year: the $20 million grant to a Houston area incubator in 2012 without a science review, and the $11 million award in 2010 to a Dallas-based biotechnology firm, Peloton Therapeutics, without both scientific and business reviews.
Keel adds a third grant with problems.
CPRIT awarded $25.2 million, its largest grant, in 2010 even though the recipient, a nonprofit group, did not exist at the time.
The grant originally went to the University of Texas-M.D. Anderson Cancer Center. It is unclear what allowed CPRIT to transfer the award from M.D. Anderson to the newly-formed CTNeT nonprofit group, the audit says.
“CPRIT also did not have documentation to support that the scientific review council recommended the original application for a grant,’ the audit says.
The audit also says:
* CTNeT’s grant application did not receive a favorable peer review
score.  CPRIT evaluated grant applications on a scale of 1 to 9, with 1
being the highest.  The CTNeT grant application received a peer review
score of 4.64.  Auditors reviewed the peer review scores for 44 other
applications and identified 9 applications that were not awarded grants
that received peer review scores ranging from 3.93 to 4.40.
*  CPRIT has a role in CTNeT’s business operations.
Without using names, the audit says Jimmy Mansour, chairman of CPRIT’s oversight committee chair; vice chair Dr. Joseph Bailes, and Gimson interviewed and
hired CTNeT’s chief operating officer, Patricia Winger, before the contract was executed.
In addition, Gimson, former chief scientific officer Dr. Alfred Gilman, and a
member of CPRIT’s commercialization review council were members of
CTNeT’s board of directors.
* CPRIT made $6.8 million in advance payments to CTNeT even though its
grant agreement with CTNeT allowed only reimbursement payments.
* CTNeT did not comply with matching funds requirements and annual
progress reporting requirements.
* CPRIT’s relationship with CTNeT and its lack of enforcing contract
requirements impair CPRIT’s ability to ensure that CTNeT is properly
using grant funds and complying with grant requirements.
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