By Will Doran, state government reporter for WRAL

An investment group tasked with turning university research into commercial success — and backed by half a billion dollars in taxpayer funding — is complying with key rules focused on grant awards, State Auditor Dave Boliek‘s office announced Friday.

The audit was requested by a politically powerful member of the group’s board of directors, businessman and Republican Party megadonor Art Pope, who had alleged that NCInnovation wasn’t following certain policies, wasn’t allowing board members access to internal documents and data they requested, and should potentially be forced to return the money the legislature voted to give it as part of the 2023 state budget.

Pope told WRAL last year he had concerns about the group’s internal accounting. He asked then-auditor Jessica Holmes, a Democrat, to look into the group’s finances and has since publicly raised concerns about NCInnovation’s accounting and other practices during board meetings. Things came to a head in a November board meeting when the group’s top lawyer accused Pope of “constant harassment of staff.”

Holmes lost to Boliek, a Republican, in the 2024 election. On Friday the auditor’s office released its findings of the NCInnovation audit, in which Boliek wrote that “NCInnovation followed what is statutorily required of it,” with regard to procedures and documentation of funding commitments and ensuring grant recipients are able to measure performance.

However, Boliek added, the group should “improve transparency and communication to its board of directors … to ensure that the board — whose makeup includes publicly appointed individuals — is fully informed.”

NCInnovation President Bennett Waters wrote a letter back to Boliek, as part of the audit, acknowledging the clean findings and promising to continue following all the rules in place to make sure it’s not wasting taxpayer money.

“We are proud of our work to date, and we will not waiver in ensuring the interest and income from the investment of state funds are used in the manner for which they were appropriated,” he said.

The group still has critics inside the state legislature, including a group of House Republicans who earlier this year filed a bill seeking to take back all of the state money invested into it. House Bill 154 was filed in February but has yet to move forward inside the legislature.

Last year, the group awarded an initial round of pilot grants, totaling more than $5 million, to researchers around the state focused on energy technology, cancer treatments and more. One weakness identified in the audit was that NCInnovation board members weren’t given details on research projects that weren’t recommended for grants by the group’s professional staff, before the board was asked to vote on the grants the staff did recommend.

The audit found nothing amiss in the decision to award the grants it did but suggested giving board members more information in future votes. Additionally, the group has already made that change ahead of the next round of grants — which will be proposed to the board of directors in May.

“NCInnivation takes very seriously its responsibility to support regional economic development through commercializing UNC System applied research in accordance with state law,” Waters wrote to Boliek.

Such audits tend to be limited in scope, and the state notes that it wasn’t able to look into every potential issue that might exist. Boliek advised NCInnovation to be prepared to answer more questions in the future.

“Given the large amount of state funding entrusted to NCInnovation, the organization should be aware that the Office of the State Auditor may return at any point — announced or unannounced — to audit any aspect of NCInnovation on behalf of the taxpayers of North Carolina,” Boliek wrote.

When state lawmakers agreed to give NCInnovation $500 million in 2023, they did so on the condition that Republican legislative leaders be allowed to appoint many of the group’s directors. Pope was appointed by then-House Speaker Tim Moore, who originally wanted to give the group far less money than it eventually received as part of budget negotiations with the state Senate, where the idea enjoys substantial political support.

Pope had publicly opposed NCInnovation — citing general opposition to government spending in the private sector — before Moore added him to the board in 2023.

The preceding article originally appeared on March 15, 2025 at WRAL’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law. Any views or opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of the Carolina Leadership Coalition.