State Audit Exposes More Problems at Cancer Institute

A state audit has revealed that transparency problems at the Cancer Prevention and Research Institute of Texas extend beyond the improper review of an $11 million commercialization grant that sparked criminal and civil investigations.

State auditors found business and professional relationships between CPRIT’s management, CPRIT’s commercialization review council, and donors who contributed to the CPRIT Foundation, a nonprofit association that supplements the salaries of CPRIT’s executive director and chief scientific officer. They also found three grants that were approved without proper review — the executive director recommended the applications receive grants, but the peer review council did not — for a total of approximately $56.3 million. CPRIT also broke a state constitutional requirement by allowing grantees to report matching funds spent on other projects, rather than the CPRIT-funded research project, according to the audit.

“Weaknesses in CPRIT’s processes reduce its ability to properly award and effectively monitor its grants,” the State Auditor’s Office report concludes. The report recommends that CPRIT address deficiencies in: making award decisions, evaluating grant applications, verifying compliance with matching fund requirements, processing payments to grantees, monitoring grantees' expenditures, assessing and measuring research progress and managing contract agreements with grantees.

“The Legislature should consider clarifying statutory requirements to strengthen the independence and professional judgment of CPRIT’s grant decisions and governance structure,” the report states.

The 2007 voter-approved constitutional amendment that created CPRIT authorized the state to purchase bonds to fund $3 billion in cancer research grants over 10 years. 

After it was discovered that CPRIT awarded an $11 million commercialization grant to Peloton Therapeutics without proper review, the Travis County district attorney’s office and the Texas attorney general opened criminal and civil investigations into the agency. Gov. Rick Perry, Lt. Gov. David Dewhurst and House Speaker Joe Straus have called for a moratorium on new CPRIT grants. And the 2014-15 biennium budgets proposed by both the House and Senate slashed all funding for the institute.  

CPRIT officials agreed with the state’s findings, and said in the report that the organization has already begun implementing a process to fully vet all grant applications for conflicts of interest, which includes comparing all grant applications to a list of CPRIT Foundation donors. They’ve also adopted administrative rules and revised policies to comply with some of the recommendations.

"Going forward, funding for CPRIT will continue only once complete confidence and trust is restore to the agency by the people of Texas," Dewhurst said in a statement on the audit. "I fully expect to address the concerns this Session and return CPRIT to its original mission of defeating cancer."

Straus said the audit serves as another reminder that CPRIT needs reform. "The Members of the House and I take these findings very seriously, and we are committed to reforming the agency this session so that public confidence is
restored and the critical work of fighting cancer can move forward," he said in a statement.

Read the full report to see detailed information on the state’s recommendations and CPRIT's response.