Omaha, Nebraska: State Auditor Says Startup Academy Misused Grant Funds and Created Four Jobs

Nebraska State Auditor Mike Foley publicly released an 11-page letter on Tuesday, Nov. 10, alleging that an Omaha nonprofit, the Nebraska Startup Academy, misused state grant funds, misrepresented its results, and operated with conflicts of interest its filings did not disclose. The letter went to the Nebraska Department of Economic Development, which runs the grant program and has suspended new payments to the Academy.

A grant sold on startups and jobs

The Academy was established in late 2022 to support founders and new businesses in Nebraska. It received $887,000 from the North and South Omaha Recovery Grant Program, created in 2023 to support small business development, job creation, and economic development after the COVID period. Its total receipts were near $1.3 million, of which $1.1 million came from state and federal funds. In its application, the Academy estimated it would create and support 60 startups and upwards of 300 new jobs within its first three years. Foley asked where those startups and jobs are.

Most of the money went to four paychecks

The auditor's office found that more than $800,000 went to four people. Executive Director Charlie Cuddy received $387,126, the Director of Entrepreneurship received $268,840, and two board members received $79,000 each. The Plains Sentinel, reviewing the same letter, put the total paid to four of the Academy's seven personnel at $813,000, with the other three, all board members, receiving no compensation. The four who were paid are employees or members of Move Venture Capital, an Omaha firm. The firm's managing partner is the Academy's executive director, and two of its general partners serve as the Academy board's chairman and treasurer. The Academy reported to the IRS in 2025 that none of its officers, directors, trustees, or key employees had any business relationships with one another.

Jobs and revenue numbers that did not hold up

The Academy first told the department it had created 46 jobs, 15 direct and 31 indirect. When the auditor's office asked for supporting documentation and found it lacking, the Academy corrected its total to 4 jobs for the $887,000 in grants. The letter also found a revenue gap: for 2024, the Academy reported $184,000 in revenue to the Department of Economic Development and $770,000 in revenue to the IRS. Auditors said grant funds were repeatedly transferred into the Academy's other accounts, although the program requires grant money to stay in a separate, dedicated account. The letter noted that disbursements from the program were issued 16 months apart after problems with expense and budget reporting, inadequate invoices, and missing financial and performance reports.

A suspension and a December deadline

In a suspension letter, the Department of Economic Development said the nonprofit had mismanaged grant funds. The suspension halts any new payments. The Academy has until Dec. 11, 2026, to address the noted issues or face termination of the agreement and orders to return the funds. Foley called the Academy's progress "pathetic" and urged the department to apply stricter oversight to public funding programs. The findings in the letter are allegations by the auditor's office, not court findings. The reports reviewed for this article did not include a response from the Nebraska Startup Academy, and the Plains Sentinel said it had contacted the Department of Economic Development for comment.