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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  • Harold

    People in power are never prosecuted for their crimes against the people and these university officials are some of those people who should have been prosecuted but weren’t. There is no hope for the working class anymore who fund these people and their abilities to break our fiscal laws

  • ND Observer

    You are so right that higher ed needs EXTERNAL oversight, not more internal oversight with more auditors. Higher Ed needs to be accountable to someone other than a weak board that does not want to hold the chancellor’s and the president’s feet to the fire for poor performance. They just want positive press releases and pretend that everything is great.

    The problem at DSU was not that the internal auditors did not find the problems with Chinese diploma mill. The problem was that Bill Goetz and BHE officials spent their time hiding the problems from the legislators and trying to cover it up in the press. The problems were discovered, but nothing was done until there was media exposure. The problems with the NDSU President’s home going way over budget was known, but again BHE officials did nothing afraid that the people in Fargo would get upset if they called Chapman on the carpet. More auditors is not the problem. Doing something about bad behavior and poor leadership is the problem.

    Then we have the Forum which avoids printing negative news about NDSU no matter outrageous action they take, from wild spending on president’s homes, buying enrollment by giving away tuition to 2/3 of their graduate students, to duplication of majors and programs, and not punishing football players who commit fraud on voter petitions. The Forum needs to be watch dog, not a lap dog.

    • kevindf

      The ND state media relies on contributions from the education cabal, so no discouraging word is ever uttered.

  • RCND

    “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,”

    No Duaine, it could have been prevented with real leadership from the SBHE and the Chancellor. An army of auditors can’t replace that. Quit making excuses… man up and take responsibility for the mess you have created. If you cannot, step aside and let others who are not afraid to lead do so

  • reggy

    It needs both. The current SAO audit approach for the schools (other than NDSU/UND) is that they’re reviewed every 2 years. A lot can happen in two years, and If the DSU issues extended beyond 3-4 years like their report states, it means the SAO reviewed their actions during the fraudulent period and somehow didn’t find anything.

    Additional internal auditing has value. That being said, if they really think it’s necessary they should figure out a way to fund it within their current budget, and not ask for state money or bill the campuses to fund it, a workaround that damages the campuses while bloating the system office.

    • http://sayanythingblog.com Rob

      It needs both. The current SAO audit approach for the schools (other than NDSU/UND) is that they’re reviewed every 2 years. A lot can happen in two years, and If the DSU issues extended beyond 3-4 years like their report states, it means the SAO reviewed their actions during the fraudulent period and somehow didn’t find anything.

      You’re kind of making my case for more funding for the state auditor’s office.

      Additional internal auditing has value. That being said, if they really think it’s necessary they should figure out a way to fund it within their current budget

      Agreed there. There has been rampant administrative bloat in the university system. They could repurpose some of those employees.

  • $8194357

    Kind of reminds me of Fast and Furious corruption.

    Two men are going to jail…

    Just not Barry and Eric who should be..

    http://news.msn.com/politics/2-men-sentenced-in-fast-and-furious-gun-case

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