A new state audit report reveals a University of Iowa employee diverted nearly $1 million to a personal bank account. The UI is saying it plans to review its conflict of interest policy in light of the report.
The report was conducted by State Auditor Rob Sand in a special investigation into the UI Department of Physics and Astronomy Machine Shop, identifying $943,000 missing that was intended for UI accounts.
The report stated the money was placed into the personal bank account of the Machine Shop Manager Brian Busch, which should have been deposited into the university’s account as he utilized university equipment, according to a news release from the state auditor’s office Wednesday.
Busch failed to disclose the ownership of D3Signtech to the university in compliance with UI policy, and university officials were made aware Busch may have used department assets and staff to divert money from the university to his personal business, according to Sand’s report.
Busch was placed on paid administrative leave effective September 17, 2021, and terminated on August 28, 2024, following the completion of the state audit.
The money was received from Xometry, a 3-D printing service, for jobs completed by Busch’s company using university staff and equipment. Because UI resources were used, the money should have been deposited in the university’s bank account.
Sand said the university failed to increase supervision of Busch after he was ordered to repay $3,550 in 2019 from his company D3Signtech which had requested several parts from the university through Xometry.
Sand said when searching for the UI on the Xometry website, Busch’s home address and his business name populated.
Sand’s report also identified over $6,000 of improper personal purchases Busch made using his university-issued procurement care, and over $130 of unsupported disbursements related to shipping charges made on university accounts.
Sand said during a news conference on Wednesday that this is the fourth report since 2017 involving conflicts of interest among UI staff, with a fifth report on the way. Sand said that the university failed to complete an internal review of conflict of interest policies following the 2019 discovery of Busch’s ownership of D3Signtech.
The university is committed to managing resources responsibly and expects all employees to follow the conflict of interest and purchasing policies stated in the university’s policy manual, according to the statement issued Wednesday.
Two other UI employees were placed on paid administrative leave and later left the university, and it is currently investigating all potential avenues to recoup wages paid to these individuals during the duration of their leave, the statement said.
Busch received a yearly salary of $83,153 from the university while on administrative leave for roughly three years, according to public record.
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William Crile, a UI engineering coordinator, was placed on administrative leave due to his working relationship with Busch and discussions with UI department staff and officials. Crile left the university in 2023.
The Machine Shop collaborates with Protostudios, a rapid prototyping facility located on campus, according to the shop’s website. Spencer Kuhl, a UI research engineer, was in charge of invoicing all Protostudios billing and emailed Busch concerning unwarranted time being charged to Protostudios.
The email was forwarded to the department’s accounting staff for further examination. During the review of the bill to Protostudios, the purchasing department became aware of Busch’s ownership of D3Signtech, according to Sand’s report. The report further states that the purchasing department and the department administrator determined Busch’s ownership of D3Signtech violated the UI’s conflict of interest policy.
The department administrator met with Kuhl about Protostudios’ work with Busch’s company. According to Sand’s report, Kuhl said Busch was a member of Protostudios and he regularly worked with the compact as the owner of D3Signtech and as shop manager.
Kuhl also said Busch had informed him three and a half years ago that he had filled out his conflict-of-interest information with the university when he was hired, however, department officials found there was no record of the information being filed until 2021.
Following the completion of a separate internal audit, the Machine Shop updated its job intake and tracking procedures to ensure work performed is properly documented, according to the UI statement Wednesday.
The statement also said the university will review its conflict of interest and employment leave of absence practices to determine if new rules or procedures are needed.
The state auditor’s office sent a copy of the report to the Iowa Attorney General’s office and the Johnson County Attorney’s office for further review.
Sand said his office has also been working with federal prosecutors on the case.