Lessons Learned from The Innovation Foundation at OSU’s Failed Governance

Why Proper Authority Governance is Imperative for Publicly Funded Institutions

Trust, Transparency, and Triggers

Early this year, an audit of The Innovation Foundation at Oklahoma State University sent tremors through higher education and public funding circles. The state auditor uncovered $41 million in state-appropriated funds that had been misallocated or improperly transferred. There was no allegation of missing money. But the absence of contracts, oversight, and compliance with legal protocols was enough to trigger a firestorm of reputational damage, legislative scrutiny, and public mistrust. The report cited the lack of “formalized and enforced internal controls and governance protocols,” spotlighting the broader issue: how fragile the credibility of public institutions becomes without proper fiduciary safeguards.

At the heart of the Foundation’s case was a failure to establish and enforce a comprehensive governance and accountability program, including a clear Delegation of Authority (DOA) framework.

What Is Delegation of Authority (DOA) and Why Does It Matter?

Delegation of Authority is the formal mechanism by which organizations define who is empowered to make which decisions, and under what conditions. It’s a governance blueprint that:

• Assigns financial accountability to specific roles
• Establishes approval thresholds based on risk, funding source, and transaction size
• Ensures decisions follow an auditable, policy-aligned path
• Prevents unauthorized commitments and co-mingling of funds

For institutions that manage taxpayer dollars, donor funds, or public grants, DOA is not optional. It is a fiduciary imperative. Without it, even well-intentioned actions can result in noncompliance, reputational harm, or penalties.

The Stakes for Public and Donor-Funded Institutions

Whether it’s a university managing Title IV funds, a hospital navigating Medicaid reimbursements, or a nonprofit deploying donor-restricted grants, the need for structured DOA is paramount. Financial governance in these institutions is complicated by diverse funding sources, distributed leadership, and evolving compliance requirements.

Key risks when DOA is missing or unclear:

• Unauthorized spending on contracts, vendors, or staff outside of budget scope
• Missed policy enforcement due to undocumented or informal approvals
• Difficult audits where records are decentralized or inconsistent
• Erosion of donor or public trust, especially when financial transparency is questioned
• Regulatory exposure under frameworks like OMB Uniform Guidance or Sarbanes-Oxley

Why Spreadsheets No Longer Suffice

Many institutions still track approval and signatory rights via static spreadsheets, email chains, or outdated templates. These tools are prone to error, lack real-time updates, and leave compliance teams scrambling when documentation is needed.

Common limitations of manual DOA management:

• No centralized view of current authorities by role or individual
• Hard to track revocations or expirations
• Inability to clearly map authority to organizational hierarchies
• Difficult to enforce consistency across departments or locations

When the auditor or grants officer calls, leaders are often left piecing together disparate records. It’s a reactive model that invites risk.

Enter Aptly: A Dynamic DOA Platform

Aptly is a SaaS platform purpose-built to digitize, centralize, and govern Delegation of Authority structures. For institutions that need to demonstrate control, defensibility, and transparency, Aptly offers:

• Role-Based Authority Management: Define who can approve what, where, and up to which dollar threshold, with precision.
• Workflow Automation: Route decisions through configurable approval chains that align with institutional policy.
• Real-Time Reporting: See at a glance which authorities are active, pending, or expired—and who holds them.
• Audit-Ready Trails: Every approval, delegation, and change is time stamped and logged.
• Cross-Functional Visibility: Finance, legal, compliance, and program leaders can access the same authoritative source.

Aptly reduces complexity, shortens audit timelines, and supports accountability across every level of the organization.

Real-World Use Cases

Higher Education: Universities receiving public appropriations and research grants must show that principal investigators, department heads, and procurement officers operate within defined authority. Aptly allows seamless mapping of delegations to grants, positions, and budgets.

Nonprofits and Foundations: Whether managing a $25,000 donor-restricted grant or a $5 million public-private partnership, organizations need to ensure funds are spent within the purpose and approval structure agreed upon. Aptly supports flexible delegation models that evolve with funding cycles.

Hospitals and Health Systems: Public health entities face increased scrutiny around Medicare and Medicaid reimbursements. Aptly provides visibility into who authorized high-risk expenditures or signed vendor agreements tied to federal funding.

State and Local Governments: CARES Act and ARPA funds came with strings attached. Aptly helps agencies document the who, what, when, and why of every authorized spend.

The Regulatory Landscape: Why Auditors and Donors Care

Today’s oversight doesn’t come only from regulatory bodies. Legislatures, journalists, and watchdog organizations are increasingly scrutinizing how institutions steward public and donor resources.

Regulatory standards that demand DOA alignment:

• OMB Uniform Guidance: Requires federal grantees to have internal controls and approval processes in place for cost allowability and documentation.
• Sarbanes-Oxley (SOX): For publicly traded entities, SOX mandates internal control over financial reporting (ICFR), which includes authorization of transactions.
• NACUBO and AGB Guidelines: Highlight the need for board-approved policies defining fiduciary roles and limits.
• State Auditor Protocols: Vary by jurisdiction but increasingly emphasize segregation of duties and transparent approval structures.

A lack of DOA is often flagged in management letters, audit findings, or accreditation reviews.

Governance, Not Just Compliance

Delegation of Authority isn’t just a compliance issue—it’s a governance one. A well-structured DOA program:

• Builds confidence among boards, donors, and funders
• Prevents fraud and waste
• Accelerates decision-making by eliminating ambiguity
• Helps align institutional risk appetite with operational practice

When implemented through technology like Aptly, DOA becomes an enabler of agility and resilience.

Questions for Leadership

As stewards of fiduciary trust, CFOs, General Counsel, Compliance Officers, and Boards should be asking:

• Do we have a formal DOA policy aligned with funding and regulatory requirements?
• Is our current DOA structure documented, digital, and defensible?
• Can we track who is authorized to make decisions at any level of the organization?
• Are we prepared for an unannounced audit or media inquiry about financial approvals?

If any of these answers cause concern, it may be time to explore modern solutions.

Conclusion: The Price of Inaction

The Innovation Foundation at OSU audit showed that even when funds aren’t misappropriated, the lack of clear authority and controls can cost institutions public trust and internal cohesion. In a world where scrutiny is rising and transparency is table stakes; a modern Delegation of Authority platform isn’t a luxury—it’s a necessity.

AptlyDone.com offers the structure, flexibility, and oversight that public and donor-funded institutions need to lead with integrity. For those answering to regulators and donors, the question isn’t whether you need DOA. It’s whether yours can withstand the next audit.