AUSTIN, Texas (AP) — The beleaguered $3 billion cancer-fighting agency in Texas approved lucrative taxpayer-funded projects despite unfavorable marks from scientists, kept sloppy records and allowed imprudent relationships between top agency executives and recipients of multimillion-dollar grants, according to a scathing state audit released Monday.
The report is the latest black eye for the Cancer Prevention and Research Institute of Texas, and will likely serve as a 99-page blueprint for state lawmakers who have vowed this legislative session to reform the troubled agency. Just three years after debuting to widespread acclaim and hiring Nobel laureates, CPRIT has become a national embarrassment that's under criminal investigation.
"The report ... serves as another reminder that CPRIT is in need of significant change," said Republican state House Speaker Joe Straus, whose power includes appointing members of the agency's governing board.
Findings by the State Auditor's Office revealed fresh details into known controversies that caught the attention of Texas prosecutors, and also exposed new problems. Among them are irregularities discovered with a $25 million statewide clinical trial network — unlike any in the county — that the agency long hailed as a symbol of the potential and impact of CPRIT.
Auditors bluntly stated that CPRIT "did not have adequate documentation" to support the grant to the Clinical Trials Network of Texas.
They also revealed that the CTNet proposal not only received poor marks from independent peer reviewers — whose opinions are supposed to guide the agency about which projects are funded — but also received a score lower than nine other similar, but rejected, applications. The report also criticized CPRIT for letting agency executives and two members of a key review board council have "business and professional relationships" with the operation of CTNeT.
"Those weaknesses concern the appropriateness of CPRIT's decision to award a grant to CTNeT and CPRIT's individual and professional judgment in monitoring CTNeT's use of grant funds and compliance with grant requirements," the report said.
Auditors also discovered grant recipients that failed to acquire matching funds from outside sources, a requirement lawmakers built in to help secure the state's investment.
State Auditor John Keel launched the audit in June, though each of CPRIT's top three executives resigned before the findings were published. Interim executives at the agency told auditors they generally agreed with the report's conclusions.
"The report paints a picture of an agency in the early stages of its development," interim executive director Wayne Roberts told Keel in a letter.
CPRIT's problems started in May with the departure of Dr. Alfred Gilman, the former chief scientific officer and a Nobel laureate. Gilman had clashed with executive director Bill Gimson over agency priorities, accusing him of letting politics trump science. Dozens of scientific peer reviewers loyal to Gilman also severed ties with the agency.
Yet the turmoil didn't peak until November, when CPRIT revealed that an $11 million award to Dallas-based Peloton Therapeutics, a private biomedical startup, was approved even though Peloton's proposal had entirely bypassed review two years earlier. Chief Commercialization Officer Jerry Cobbs resigned as problems with the Peloton grant surfaced, and Gimson stepped down in December.
Public corruption officers in Travis County and the Texas attorney general's office launched separate investigations. No one has been accused of wrongdoing.
CPRIT was a darling of the scientific community and some of the nation's biggest advocacy groups, including the American Cancer Society, after launching in 2009 as an unprecedented cancer-fighting effort on the state level. The agency oversees the nation's second-largest pot of cancer research dollars, next to only the federal National Institutes of Health.
That money is now frozen, with CPRIT under a moratorium until confidence in the agency is restored. To show they were serious, state lawmakers appropriated no new money to the agency in the first draft of the next state budget.
The report also called for stricter safeguards with the CPRIT Foundation, the agency's nonprofit arm that was partly created to supplement the salaries of agency executives. CPRIT has said that the agency does not receive information about donors to the foundation.
"Without that information, CPRIT has no assurances that it is not awarding grants to the CPRIT Foundation donors, which creates a conflict of interest," the report said.
The foundation has recently returned more than $19,000 to donors affiliated with grant recipients.
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