Dickinson State University Foundation Headed For Dissolution

During the 2015 legislative session one of the hot topics of discussion was whether or not North Dakota’s university foundations are accountable to the public.

These foundations claim that they’re private and thus cannot be audited and do not have to abide by open records requests. To the latter point, Attorney General Wayne Stenehjem has consistently ruled that the foundations do have to abide by open meeting/open records laws. As to the former point, the Legislature passed SB2004 into law earlier this year which gives the state auditor the authority to target the university foundations.

Much to the displeasure of the foundations. “I can’t even imagine how you would justify making the independent agency pay for the state’s audit,” NDSU President Dean Bresciani said back in February, according to the Fargo Forum. “I’ve never heard of a state auditor’s office being able to audit a legally established, independent agency.”

But the necessity of this is made clear by the situation in Dicksinson where the Dickinson State University Foundation now seems to be headed toward dissolution after being placed in receivership last year.

“The attorney appointed as financial receiver for the Dickinson State University Foundation says the foundation’s financial situation is so bad, it will have to be dissolved,” reports Dustin Monke for the Dickinson Press. Things are so bad at the foundation that auditors tasked with unraveling what happened can’t even tell if funds at the university were inappropriately used:

In the latest report, Smith wrote that he has not discovered “any malfeasance, wrong-doing, or fraudulent activity on behalf of the current or past management, staff, or directors of DSUF,” and that he has not been able to determine if the DSU Foundation used restricted assets — money donated to the foundation to be used for specific purposes — in improper ways. However, Smith added that neither he nor Brady Martz have been able to obtain adequate information regarding the actual amount of the foundation’s total restricted funds in order to make that determination.

Previously it was alleged that the foundation had been using dollars intended for scholarships to cover operating costs. Which is a big, big problem except now it seems that nothing can be proved because the finances of the foundation are in such disarray.

Which is, you know, convenient.

Meanwhile, the taxpayer bailouts have already begun. Earlier this year the State Board of Higher Education approved the purchase of foundation property by the university. If that sounds familiar, the same thing happened when the UND Research Foundation in Grand Forks went belly up and had to get a $10 million bailout from the taxpayers.

But again, these foundations insist that they’re private.

That’s a hugely problematic stance when the taxpayers are the ones picking up the pieces when these foundations fail. Which they’ve done in North Dakota of late with alarming frequency.