ND Universities Need More External Oversight, Not More Internal Auditors

shirvani

Like clockwork North Dakota’s university officials are pushing yet another big budget increase request to the legislature, and the justification for a chunk of that spending is the need for more auditors in the university system.

“The Dickinson State issue or the controversy over the costs of the UND and NDSU presidents’ homes could have been avoided if the system had been adequately staffed with compliance officers and auditors,” wrote State Board of Higher Education President Duaine Espegard in a letter to the Grand Forks Herald earlier this month, apparently blaming those scandals on the legislature.

The university system budget request Chancellor Hamid Shirvani has sent to the legislature asks for 183 new employees, including a doubling of the staff at the central university system office. This new staff will, it is claimed, provide more audits and oversight of the system as a whole.

Setting aside the debate over whether or not the university system needs bigger budgets, we’re left with the question of whether or not the university system is capable of holding itself accountable. Will more internal audits in the university system, reporting to the university system itself, really solve rampant problems with fraud and spending abuses? After all, former Chancellor Bill Goetz lied repeatedly to legislators about the scandal at Dickinson State University, and actively tried to limit the scope of external audits of the situation. In another context, NDSU President Dean Bresciani has arrogantly suggested that external auditors aren’t smart enough to provide oversight of the university system (I’m not kidding). As a whole the university system is notorious for working to avoid transparency and accountability. The joke, among many ND reporters, is that NDSU and UND might as well be called “Non Disclosure State University” and the “University of Non Disclosure.”

University system officials no doubt feel they can get away with these shenanigans because the legislature has almost no oversight authority short of controlling appropriations and what can be revealed during committee hearings and legislative inquiries. Those aren’t very effective tools for a part-time legislature.

In a risk assessment report issued for North Dakota State University specifically, consultants Larson Allen were skeptical that internal auditors reporting directly to university officials were independent enough to do an adequate job of oversight. “The Director of Internal Audit reports directly to the President,” the report reads referring to President Bresciani, “resulting in potential independence issues.”

“Potential independence issues,” is the operative term. How can an auditor be truly objective, truly independent, if they are hired and fired by the very people they are auditing?

If legislators are intent on spending money in the name accountability in the university system, why not give that money to the Office of the State Auditor? Auditor Bob Peterson’s office already has an audit section focused on the university system. Why not expand that, so that audits of the university system are conducted by a state agency independent of the university system and overseen by an official accountable to North Dakota voters?

That would make more sense than pouring more money into the university system so that they, can in turn, produce more self-serving audits.

Per the state constitution, the university system is largely free of any administration by either the executive branch of the state government or the legislative branch. But that doesn’t mean legislators can’t invest in external auditors who would work to expose university system problems.

What can’t be fixed through direct administrative control can perhaps be fixed through transparency.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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