State audit ties $300K in improper, unsupported spending to University of Iowa doctor

IOWA CITY — A state audit the University of Iowa requested based on suspicions involving one of its business-owning doctors in the Department of Neuroscience and Pharmacology has turned up more than $300,000 in improper or unsupported spending.

Calvin Carter, appointed to assistant professor in the department on Jan. 5, 2022, was placed on paid administrative leave Oct. 11, 2023 pending investigation into financial transactions between Jan. 1, 2016 and Dec. 31, 2023.

The investigation identified $294,913.41 of “improper disbursements,” which included $3,182.40 of “question costs,” along with $7,257.13 of “unsupported disbursements.”

Auditors also raised concerns with “university policies and procedures related to conflicts of interest and commitment,” Auditor Rob Sand wrote in a report made public Wednesday.

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Before his most recent appointment in neuroscience and pharmacology, Carter was a postdoctoral research fellow in the UI Department of Pediatrics and a member of the Fraternal Order of Eagle Diabetes Research Center and the Iowa Neuroscience Institute.

Prior to joining the UI faculty, Carter earned his doctorate in neuroscience at UI and completed fellowships in neuroscience and diabetes and metabolism on campus.

While in Iowa City, Carter — along with his brother and another postdoctoral research fellow — in October 2016 founded Geminii, Inc., “a medical device company that offers a new solution for diabetes with their non-invasive therapy which uses transformative technology to reduce blood sugar and reverse insulin resistance.”

According to geminiihealth.com — in addition to the cofounders — Geminii’s team included several UI personnel like a research scientist, research specialist, and design engineer, according to the audit. The website, which has been wiped aside from a “contact us” box, indicated a partnership with the diabetes research center and advising from the UI chief innovation officer, a medical department chair and professors.

Carter disclosed in UI conflict-of-interest documents a 33 percent ownership in Geminii from 2018 to 2021, with that percentage increasing to 66 in 2022. A conflict management plan for Carter was established in April 2023.

“However, during the review of the management plan, we were unable to locate any information or follow up done by the university for the business days that Dr. Carter needed to use for Geminii,” auditors reported. “Also, there was no follow-up done to ensure the information listed in the disclosure was accurate and followed.”

Carter, UI respond

Carter in a statement issued through his attorney Wednesday disputed any narrative he intentionally misappropriated funds — citing rather “internal communication breakdowns that led to a technical failure to comply with an institutional policy; a policy that, according to the auditor’s findings, was never clearly communicated to Dr. Carter or, apparently, to his supervisors.”

“The idea that I intentionally misused funds is deeply hurtful and patently false,” Carter said in a statement. “I love my career and have devoted my life to trying to cure cancer, diabetes and advance the science of medicine in Iowa. The university has derailed both my life and my research because of its extremely complicated, wasteful, and unnecessary bureaucracies.”

In a statement responding to the audit, UI officials reported making "significant changes to its conflict of interest and conflict of commitment policies and procedures, per a recommendation by the state auditor.“

Additionally, the university will implement procedures to “ensure sufficient documentation and explanations are provided to verify the validity of charges made to procurement cards.”

Carter and associated research specialist Charles Searby both remain on administrative leave and will be afforded due process “as restitution and termination options are considered,” officials said.

“The university takes seriously its fiduciary responsibility to allocate taxpayer, donor, and research dollars wisely, and has several procedures in place to ensure this happens,” according to the statement. “Procurement policies are outlined in the UI’s Policy Manual and all purchases are reviewed by highly trained staff.”

Highlighting that UI concerns were the impetus for the audit, officials said, “the university’s internal controls worked as intended.”

Weighing legal options

Those concerns — and the domino fallout — began to crest in June 2023, when Carter’s UI-issued procurement card was placed on the university’s delinquency list over a specific charge. Moving a review of that charge up the chain of command, UI officials days later got the Board of Regents involved and eventually the state.

Auditors, in poring over UI policies and actions related to Carter and Geminii, found sparse follow up to a management plan created for Carter related to his business ownership.

“Although Dr. Carter’s plan stated that he would work on Geminii during normal work hours and use vacation for those hours, the university was not able to confirm that he took any time off for Geminii work,” according to the audit, which reported Carter disclosed travel and personal services related to his entities.

“However, the university did not follow-up” auditors reported, and “did not verify if all members of Geminii’s staff and advisers disclosed their relationship to the university.”

Auditors after spelling out their findings highlighted three key recommendations for the university — including clearly explaining how its employees should follow procedure.

“I’m committed to my students, my colleagues, and the pursuit of science that helps people,” Carter said in a statement, promising to cooperate with any investigation while also working to refute the audit’s claims.

He’s also weighing his legal options, “including potential defamation claims, in response to the reputational damage caused by the report and related media coverage.”

“I will not stand quietly by while some administrators try to tarnish my name and the good work we do for Iowans, all over administrative policies and technicalities so obscure that others didn’t know existed either,” he said.

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com