“This is a great day for Parallax Research, for the state of Ohio and for the dozens of partners across academia, industry and the military with which our team works and supports every day,” Dennis Andersh, Parallax president and chief executive, said in a statement. “As Ohio’s only independent and non-profit research institute, we have a special responsibility to be as transparent and accountable as possible.”
The office examined spending with vendors from 2012 through 2017, spurred by an Office of the Inspector General report in 2019 that “concluded there was reasonable cause to believe a wrongful act or omission had occurred.”
Andersh believes this new auditor’s report represents a reversal of that finding, a spokesman said.
The auditor’s goal was to determine whether WSARC funds were spent “in accordance with the Ohio Constitution and consistent with language in the Ohio house bills,” the report said.
Report relied on ‘additional narratives’
The money was appropriated for job training and workforce development.
While in all instances the auditor found WSARC’s spending was allowed, in several instances, initial contracts and modifications reviewed by auditors did not support that funds were used for those purposes. But the report says Parallax provided additional “narratives” and data showing that the work did support those purposes.
For example, when it came to spending with Ron Wine Consulting Group, the audit report states: “The contracts and modifications, on their own, did not support regional job training efforts to equip Ohio’s workforce with additional skills to grow the economy, and the consulting services appeared to benefit WSU only. However, the additional narratives provided by Parallax indicated Ron Wine did perform some work that trained WSRI and WSU employees to secure federal contracts and those contracts did ultimately lead to job training.”
The audit uses similar language for several other vendors.
The auditor’s office reviewed contracts and invoices with 16 WSARC vendors. Payments, payroll expenses and costs totaling were $15.5 million were examined, of which $6.5 million was originally flagged as unallowable but then deemed allowable after additional information was provided.
When a spokesman for the Ohio auditor’s office was contacted about the report, he said a phone interview would be difficult. He asked that the Dayton Daily News submit questions in writing.
“This engagement was not a financial or performance audit, the objectives of which would be vastly different,” the auditor’s report said. “Therefore, it was not within the scope of this work to conduct a comprehensive and detailed examination of the workforce development activity or evaluate for efficiencies of the processes.”
The auditor’s office recommended that Parallax evaluate and update contract language and requirements to ensure all expectations are clearly defined. And the office recommended that Parallax “ensure all documentation related to awards/appropriates received from governmental agencies are retained until the full compliance period has ended and all related audits, monitoring, or other matters are concluded.”
Parallax noted that the audit had no finding for recovery, which is a finding that money was misspent and must be repaid.
“The auditor of state found WSARC’s (now Parallax) use of the workforce development funding to be in compliance with the Ohio Constitution and related Ohio workforce development house bills.” Parallax said in its release.
The audit “allows Parallax to move forward with a complete rebrand of this world-class community, state, and national asset,” the institution said.
However, according to the state auditor’s web site, Andersh still has a finding of about $942,000 against him from 2019. That finding is labeled on the web site as unresolved.
That finding stems from a separate 2019 audit that found WSARC improperly paid Ron Wine Consulting Group more than $1.3 million. Findings for recovery were issued against Wine, the former WSARC CEO, former Wright State provost, former WSARC chief financial officer and Andersh. All of those findings remain unresolved, according to the state auditor’s website.
“Anyone who has an unresolved finding for recovery is prohibited from receiving a contract for goods, services, or construction, paid for in whole or in part with state funds,” according to the site.
Through a spokesman, Andersh said $1.4 million, remains unresolved. “We are continuing to work for a resolution of those payments,” spokesman Chuck Vella said.
Asked about the amount still to be recovered, the auditor’s office said in an email that the scope of the audit “was limited to evaluating the nature/intent/purpose of the various contracts paid for with workforce development funding which was passed through from the Ohio Department of Higher Education.”
“We did not evaluate WSARC’s policies, procedures, or practices over their day-to-day operations,” the auditor’s spokesman also said. “We should also point out that WSARC, now Parallax, is no longer affiliated with Wright State.”
“While the original finding for recovery of over $1.3 million of misappropriated state funds remains in place, the university is glad to learn such misconduct was not criminal in nature,” Wright State spokesman Seth Baugess said when asked for the university’s reaction to the new audit report.
‘Compliance and excellence’
Known as Parallax since October 2020, the institution has led the Ohio Federal Research Network, a network that Parallax said has generated more than $350 million in research funding for Ohio.
Parallax has grown from 70 employees in 2020 to more than 170 today nationwide, including those with an affiliate, the Ohio Aerospace Institute.
“Since Dennis Andersh took over as CEO in 2015, the Parallax team has worked tirelessly to create an atmosphere of both compliance and excellence,” Parallax board member and retired Lt. Gen. C.D. Moore said in the statement from Parallax. “As a decade-long partner of Parallax and its world-class scientists, I have long believed in the work they support for Ohio and the nation. With this audit concluded and report published, our team and clients can continue to strive toward new frontiers.”
Shortly after WSARC rebranded as Parallax in 2020, Wright State sued its former research funding arm, alleging that the agency refused to return state property and money after separating from the university.
The university’s lawsuit against Parallax, which involves the recovery of millions of dollars of “misappropriated funds and assets,” remains pending in the Ohio Court of Claims, Baugess said. There have been no recent settlement talks, he added.
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