Amid the investigation of Dr. Timothy M. Stearns and the findings of a CSU system audit, Stearns resigned from his position Monday as executive director of the Lyles Center for Innovation and Entrepreneurship.
For now, “Stearns will assist the provost in correction of the audit findings recently released by the California State University Office of Internal Audit, facilitate transition for new leadership of the Lyles Center and provide assistance in the planning of the upcoming 10-year anniversary of the center’s location on campus,” a press release said. “He will continue as a faculty member in the Craig School of Business.”
In June of 2015, Fresno State President Dr. Joseph Castro requested an audit to look into any possible conflicts of interest in Stearns’ relationship as Lyles Center director and partners in his side corporation, Kids Invent.
“I was disappointed by the magnitude and the seriousness of the audit findings. There are lessons to be learned from the audit that will help the university to minimize such risks in the future. Our goal is to keep such risks at or as close to zero as possible,” Castro said.
The audit’s reports raised questions about at least $15,000 of unaccounted for money from Stearns’ Paypal account, which he established between his Kids Invent Corporation and the Lyles Center.
The conflicts beyond the unaccounted for money led back to Stearns’ hiring of his business partners in the Lyles Center, who also allegedly performed work to benefit Stearns’ Kids Invent Corporation, which will remain in a relationship with the Lyles Center under the new interim executive director, in place of Stearns.
Reviewing the payments made between June 1, 2013, and June 30, 2015, there were over 700 payments made to Stearns from the foundation. The auditor, Larry Mandel, examined a sample of 20 of those payments.
“We found one questionable payment and also questioned the reason and need for the large volume of transactions to reimburse the director,” Mandel said.
There were also discrepancies as to why Stearns used his personal card so often rather than simply using a company card, which would eliminate the need for so many reimbursements to Stearns.
Stearns did not take responsibility for these questionable reimbursements.
“Why would the university give me $3,000 without documentation? And if reimbursements go on without proper paperwork, isn’t that on the university? It isn’t my job to sign the paperwork for them,” Stearns said.
However, the university chooses not to stand by Stearns’ claim.
“We stand by our record keeping, and we feel that we have good processes in place for good record keeping. We’re not going to say that we agree with that assessment of our record keeping,” said Provost Lynnette Zelezny.
Zelezny is already working to fill Stearns’ spot as executive director at the Lyles Center.
“I’m moving forward with finding a new interim executive director, and I’ve already received some recommendations and have started to interview. I did interview someone today, so I am moving quickly and swiftly on that,” Zelezny said.
Stearns’ standing at the university remains intact despite of the accusations.
“Dr. Stearn’s visionary leadership and entrepreneurial spirit have been central to the Lyles Center’s growth and success since it was established in 2003. I accepted his offer of resignation because we are both committed to the longterm success of the Lyles Center. I am pleased that he will dedicate his creative energy in the coming months to ensure a successful transition of leadership,” Castro said.
Zelezny said she is confident that Stearns will be capable of resolving any of the inconsistencies in the “questionable payments.”
“There won’t be a disciplinary action because we are required to find that receipt and to reconcile it and that is one of the things he is working on right now. I believe that he will be able to account for that receipt. That’s my expectation anyway,” Zelezny said.