Legislative investigation finds university lacked adequate controls over state appropriation for Eastern Idaho Forensic Pathology Center project.
A legislative audit has found that Idaho State University (ISU) misappropriated $853,700 in state funds intended for a forensic pathology center that was never built.
The Idaho Legislative Services Office Audits Division released its limited scope financial investigation on Aug 12, covering the period from March 2022 through February 2025. The audit focused on appropriations made in House Bill No 776 (2022) for operating expenditures related to the Eastern Idaho Forensic Pathology Center (EIFPC) at ISU.
Investigators found that ISU paid an invoice from Bannock County for $853,700 “that was not supported by evidence of allowable expenses and appeared to have been directed and submitted to avoid reverting unspent general funds to the State of Idaho, as required.”
Forensic Lab Project Background
The forensic pathology center was proposed during the 2022 legislative session as a partnership between ISU and Bannock County. The project would have established a facility in ISU’s Eames Building, described as providing 5,000 square feet with infrastructure necessary to support forensic pathology operations, including specialized ventilation, radiological capabilities, and space for future expansion.
The Idaho Legislature appropriated $900,000 from the state’s General Fund for operating expenditures related to the EIFPC at ISU. Of this amount, ISU paid $46,300 to SmithGroup for a site assessment and feasibility study completed in January 2023, which estimated renovation costs between $8.99 million and $9.19 million.
However, the remaining $853,700 was transferred to Bannock County through an invoice dated April 17, 2023, with only the description “Forensic Pathology Project” and no supporting documentation of actual expenses incurred.
Internal Control Failures
The audit revealed that ISU treated the state appropriation as “pass through funds” rather than restricted funds, despite the university having established policies and procedures for funds designated for specific purposes such as research and grants.
“ISU lacked adequate internal controls to administer funds for the EIFPC project in compliance with the requirements included in House Bill No. 776 (2022), Section 7,” the audit states.
Email communications reviewed by auditors showed ISU staff understood that Bannock County could “only receive funding (through the form of reimbursement) for actual expenses incurred” and that the county should “incur expenditures then invoice ISU for reimbursement.”
Despite this understanding, ISU processed the $853,700 payment without verifying actual expenses. An email from June 14, 2022, indicated ISU was concerned about ensuring the appropriation was not reverted to the state, stating “we need to expend the $900K state appropriation to ISU by June 30, 2023.” However, the project stalled before the money was used as intended.
Project Abandonment and Fund Recovery
In August 2023, Bannock County notified ISU it was no longer moving forward with the forensic pathology lab on campus and would instead locate the facility on county-owned land. Despite this development, ISU initially took no action to recover the disbursed funds.
Following media scrutiny and legislative pressure, according to the report, ISU ultimately recovered the funds from Bannock County in two separate payments: $684,817.68 on Dec 19, 2024, and $168,882.32 on Jan 9, 2025. These amounts were remitted to the Idaho State Treasurer.
New Oversight Measures
In response to the audit findings, ISU created an Appropriations Tracking and Oversight Team in February 2025. The team includes personnel from finance, legal, facilities, and government relations divisions and is responsible for ensuring state appropriations are expended in compliance with legislative intent and applicable laws.
The audit made two key recommendations: developing written policies and procedures to ensure proper monitoring and compliance with appropriation laws, and improving internal controls related to invoice approval to ensure payments are supported by appropriate documentation.
In its management response, ISU acknowledged the audit findings and agreed to continue implementing measures to ensure appropriate accountability for financial transactions.
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