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Audit spurs bill to tighten oversight of University System high‑impact entities; faculty warn against overly broad conflict-of-interest restrictions
Summary
House Bill 10‑54 responds to audit findings that University System of Maryland high‑impact entities used noncompetitive procurement and in one case spent $25.7 million on an abandoned IT project; auditors recommended greater oversight while faculty urged preserving limited conflicts-of-interest waivers for founder‑inventors.
Delegate Wu opened the hearing on HB 10‑54 by citing a Department of Legislative Services audit and by describing problems at the University of Maryland Global Campus (UMGC) and related high‑impact development entities created by the University System of Maryland.
“Recent investigation, particularly an audit by the Department of Legislative Services in August 2024, have raised significant concern,” Delegate Wu said, summarizing the audit findings that UMGC Ventures and related entities received hundreds of millions in payments from UMGC without competitive procurement and that a $25.7 million student‑information‑system project was abandoned after failing to work.
Adam Westover of the Office of Legislative Audits described the audit findings in more detail: UMGC obtained IT services from Ventures totaling about $184 million from November 2018 to December 2022 without competitive procurement; a major IT project reached $25.7 million before cancellation; and Ventures relied heavily on UMGC funding. Westover said his office made recommendations and will assess UMGC’s follow‑up in a subsequent audit.
Several UMD faculty and researchers testified in support of oversight reforms but urged a targeted amendment to preserve a narrow waiver that would allow faculty inventors to take leadership roles in startups. Tom Abrams, a faculty member in medicine, said restricting founders’ leadership roles would deter commercialization. “The founding inventor must be visible if a company is to attract investors,” Abrams said. Professor Min Woo and others described cases of faculty leaving Maryland because restrictive conflict‑of‑interest policies made it difficult to launch and lead companies.
The committee heard detailed audit testimony and competing policy views: auditors urged stronger procurement oversight of HIDA entities; faculty urged the committee to tailor conflict‑of‑interest language so it does not bar faculty from serving in necessary leadership roles for startups. No final vote is recorded in the transcript excerpt.
