The president of the State University of New York’s Upstate Medical University, who was allegedly set to become Penn State’s next president, resigned Thursday amid allegations of financial dishonesty.

Penn State was set to announce David R. Smith as its next president last Friday when trustees learned their choice may have been padding his state pay without authorization, as reported by Capitol Confidential.

Smith was placed on leave on Tuesday while SUNY investigated the report, which alleges that Smith received $349,295 in unauthorized benefits. The report alleges that Smith and some members of his executive team may have been receiving unauthorized payment from outside companies in addition to his $625,000 compensation from SUNY.

The school released Smith’s statement of resignation Thursday:

“Over the past several weeks, I have been working with the leadership of SUNY as they conduct a review of all of sources of my compensation. As I recover from spinal surgery this week, I will continue to cooperate fully and do all that I can to bring the review to a swift conclusion. To avoid further distraction for the University from its important mission, I intend to submit my resignation as president of SUNY Upstate Medical Center, so that this great institution can move on to even greater success.”

President Rodney Erickson will retire by June 2014, and a select group of trustees has been searching for his replacement since last year. Penn State has remained quiet throughout the past week, repeatedly saying it will not confirm or deny that Smith was the university’s top pick for president.