ND university system places two top accountability personnel on leave

By Rob Port | Watchdog.org North Dakota Bureau

BISMARCK, N.D. — Shortly after winning a victory over a ballot measure which would have replaced the existing State Board of Higher Education, the North Dakota University System’s top officials have taken action against two accountability officials.

Chief Auditor Timothy Carlson and Compliance Officer Kirsten Franzen have both been placed on administrative leave pending termination. Carlson says he and Franzen are facing retribution for trying to bring transparency to the system.

A investigation conducted by The Village Business Institute at the behest of NDUS Chief of Staff Murray Saugsveen concluded Carlson misrepresented his work as an independent business consultant, but Carlson said the report is one-sided and doesn’t represent the facts.

“Someone has spent six to eight months digging into my background on Internet websites, some of which are not credible,” Carlson told Watchdog via telephone. “I have come into possession of a huge stack of documents that they have used to put together a case, a spin doctored case, basically stating that I lied during the interview.”

The investigation claims Carlson misrepresented a cleaning business as a consulting firm. But Carlson said he and his wife set up the business as an umbrella for both a cleaning business and his consulting work and believes the real reason he’s being pushed out is his push for accountability policies for the university system. Among the policies Carlson was pushing was a records retention policy, which the university system currently lacks, as well as policies requiring disclosure of conflicts of interest.

Watchdog has reported previously on struggles between the universities and the Legislature over disclosing public records including emails, with lawmakers expressing concerns some records were being destroyed rather than being turned over.

Prior to the allegations about Carlson’s work history he received praise, and even a pay raise, from top university system officials. In a May letter Chancellor Larry Skogen said Carlson had done a “very good job of creating an internal audit function from whole cloth.” In a September letter from State Board of Higher Education President Kirsten Diederich, Carlson was notified of his permanent appointment as auditor and a raise.

“Your work to date has been excellent,” Diederich wrote at the time.

Carlson said things began to change after an Aug. 21 meeting of the Board of Higher Education’s Audit Committee during which he and Franzen made proposals policies regarding conflicts of interest.

“We were working on upgrading our code of conduct to a more contemporary corporate version that would require the disclosure of any potential conflicts of interest of decision makers throughout the entire system,” Carlson told Watchdog of his and Franzen’s efforts. “That has met with huge pushback.”

Franzen declined to comment, but in a Nov. 10 memorandum Saugsveen accused Franzen of providing misinformation at that meeting.

“During the Audit Committee meeting in Fargo on August 21, 2014, you provided misleading and inappropriate statements to the Committee,” state the memo, which lays out the reason for Franzen’s termination.

“The Chancellor has advised he does not trust you,” Saugsveen wrote elsewhere in the memo. “I do not trust you.”

The committee hearing also seems to have put Carlson in the crosshairs as well. The day after the Audit Committee meeting, on Aug. 22, Saugsveen contacted The Village Business Institute about beginning an investigation into Carlson’s work history.

Asked if he believed Franzen working with him was the cause for her being put on leave, Carslon said he couldn’t “say that for certain” but that it probably contributed. “I think it’s a distinct possibility that her work in the area of compliance and code of conduct contributed, yes,” he told Watchdog.

What may have also contributed was Carlson’s decision to notify a lawyer working on university system records requests for the Legislature that not all records were being turned over.

In an Oct. 10 letter to John Bjornson at Legislative Council, Carlson said he would provide documents that were “selectively omitted” from a previous request by Saugsveen.

“As Chief Auditor for NDUS, I have a professional obligation to provide information that I believe may have been selectively omitted when responding to your request,” Carlson wrote.