AquaSeNT website

The Auditors of Public Accounts on Friday told Democratic Gov. Dannel P. Malloy that National Science Foundation awards to the University of Connecticut and a private company were frozen while the federal agency investigates a potential conflict of interest.

The private company — Aquatic Sensor Network Technology LLC —is a a marine sensor and communication technology firm that participated in UConn’s Technology Incubation Program from May 1, 2009, through April 30, 2014. Its principals include two UConn professors, who aren’t named in the auditor’s letter to Malloy.

The auditors, John Geragosian and Robert Ward, said they stumbled across information about the federal agency’s investigation of the conflict of interest during their regular audit of the university.

While the investigation initially focused on funds awarded directly to the private company, during the course of the investigation “it was discovered that NSF funds administered by UConn had been used to purchase 15 specialized acoustic modems from AquaSeNT between April and August of 2013 at a total cost of $253,500,” the auditors wrote in their letter to Malloy.

“The agency did not disclose to our office that this matter involved funds administered by UConn until we made it clear to UConn that we were already aware that it did,” the auditors wrote.

The auditors wrote that two of the three purchase requisitions included statements asking the professors to proclaim they had no financial interest in the vendor seeking the NSF funds.

“Two of the faculty members involved state that they did not read the portion of the sole source justification form they signed that contained the certification that they had no interest in the vendor,” the auditors wrote. “. . . The faculty should have been aware what they were signing.”

However, the University of Connecticut has a difference of opinion when it comes to what is being investigated and when it should have reported it to the auditors and state Comptroller Kevin Lembo.

“UConn procurement officials would have blocked the NSF-funded purchase if the three employees had disclosed their conflicts of interest as principals in the company from which the items were purchased,” Stephanie Reitz, a spokeswoman for UConn, said Friday.

“The NSF suspended its grant to the private company. The NSF also suspended other grants to the individuals at UConn whose conduct in the company was in question. The NSF has not alleged that any state funds were misused.”

As far as when it should have reported the investigation to the state, Reitz said the reporting requirement is triggered by the conclusion of the investigation.

“With this matter still under investigation by multiple agencies — including but not limited to NSF and UConn — the issue remains unresolved about whether allegations, in the absence of a conclusion, trigger the reporting requirement,” Reitz said.

The NSF told the university it was investigating the matter last December.