This is an archived article that was published on sltrib.com in 1990, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Page: B1 (Copyright 1990)
The audit report noted a few apparent violations of University of
Utah procedure in the first months after Stanley Pons and Martin Fleischmann made their cold fusion claim, including Dr. Pons' hiring of his own son to work in his lab.
But Mr. Allen said Monday, "Now we feel they do have good controls in place."
The most significant problem Mr. Allen said he encountered in auditing the institute, regarded the university administration's waiver of procedures in paying Drs. Pons and Fleischmann $25,000 each shortly after their March 29, 1989, announcement. The money was reimbursement for expenses, but the two researchers had not provided
detailed documentation of those expenses.
That issue was not actually included in the cold fusion audit.
Instead it was moved to the university's standard annual audit because the payments were made before the institute existed, Mr.
Allen said.
The university audit has been sent to U. officials, but Mr. Allen said it was not available for release because the university had not yet given the auditor's office its responses.
The state auditor said he recommended the university count the $25,000 as income to the two professors rather than expenses,
thereby making the researchers responsible for documenting those expenses to the Internal Revenue Service, if they did not want to be taxed on the money.
Walter P. Gnemi, U. vice president for administrative services, said he had not yet seen the university audit. "I guess that in view of Tom's recommendation, we'll certainly study the matter and give it serious consideration," he said.
Mr. Gnemi said he could not remember whether the two researchers had requested the expense money or not, but he vaguely recalled that the decision was made to reimburse them in part because the payments
might strengthen the university's claim to any patents.
When they made their March 23, 1989, announcement, Drs. Pons and Fleischmann said they had used $100,000 of their own money to carry out their research.
The cold fusion audit contained nine "findings and recommendations" and included a response from Institute Director Fritz Will in each case. Many were minor miscalculations in reported hours or expenses.
In August 1989, shortly after the institute opened, Dr. Pons
hired his son, Joey, to work as a technician in his lab, which the auditor's report noted was contrary to the university policy prohibiting supervisors from hiring immediate family.
In his response, Dr. Will noted that the hiring occurred without the knowledge of the institute director, "and the scientist's son was removed from the payroll immediately upon discovery of this situation." He was on the payroll for 16 days.
Dr. Will said Monday that he believed Dr. Pons was out of town.
His attorney in North Carolina could not be reached Monday afternoon.
The audit also noted that the $20,968.64 in salary and benefits for Dr. Pons' personal secretary was paid entirely by the institute.
"The secretary felt that `almost all' of her duties were non-fusion related," the report noted. "In addition, her boss only charges 50 percent of his salary to the institute. {The rest is charged to the U. chemistry department.} Since she is his personal secretary, 100 percent of her salary should not be charged to the institute."
Dr. Will's response said the university has agreed to compensate the institute for half of the money, and the secretary is no longer paid anything by the institute.
Another finding noted that Dr. Pons had been overpaid $295 for two meals while he was in Japan in October 1989. "The error appeared to be a clerical error in calculating the reimbursement amount," the report said. "The supporting documentation was in Japanese and the yen had to be converted to dollars."
Dr. Will said Dr. Pons was notified by fax Friday that he would have to repay the money. No reply had been received by Monday afternoon, he said.