Star bright: will USTAR improve or implode?

• Author: Madison, Rachel
• Position: Utah Science Technology and Research

When the Utah State Legislature passed Senate Bill 75 in 2006, creating the Utah Science Technology and Research initiative, hopes were high among state officials, legislators and citizens alike. The program provided funding for strategic investments at the University of Utah and Utah State University, and according to its prospectus, would form more technology-based startup firms, offer more high-paying job opportunities and generate more business activity with an associated tax base expansion.

But in October 2013, a performance audit conducted by the Utah Legislative Auditor General's office revealed USTAR was way off the mark. The audit found USTAR's reported revenues and jobs were overstated and inaccurate, its return on investment was flawed, and commercialization success had been limited. It also found USTAR lacked proper oversight of areas like its budget and research teams, and management did not have proper policies and procedures in place in accordance with state laws. This proved to be a major concern to the state, primarily because more than $330 million in public resources has been used to fund USTAR since its beginning.

After the audit, changes to USTAR's management and a bill passed during the 2014 legislative session showed state officials' eagerness to remedy USTAR's past and improve its future. Although many agree USTAR can have the bright future always expected of it, others are concerned it may be a sinking ship.

An Unsatisfactory Audit

Brian Dean, of the Legislative Auditor General's office, was the supervisor of the USTAR audit. The role of the audit was to validate USTAR's January 2013 ROI Report to the Legislature, as well as hold USTAR accountable to what it was created to do according to its prospectus.

"USTAR came and presented their., ROI to the Legislature in January 2013," Dean says. "The first thing we did was go through and validate those numbers, but we found all kinds of concerns."

USTAR reported it had provided a 219 percent ROI to the state, but the audit found that to be inaccurate, especially because it did not reflect an actual ROI, or expansion of tax revenue to the state. More than half of the reported $463 million in revenue was invalid, including the overreporting of $254 million in engineering contracts and private investments, as well as $4.4 million in sponsored research.

When it came to jobs, the audit found USTAR reported it had created 3,380 jobs, but 1,737 of those were construction jobs to...