The Legislative Audit and Fiscal Review Committee (LAFRC) has voted for audits for the state’s university foundations, and it wasn’t even close. During its January 29 meeting, LAFRC voted 11-4 for the audits.
The folks at the universities aren’t happy about it, including NDSU President Dean Bresciani who is apparently super worried about how much it’s all going to cost.
“I can’t even imagine how you would justify making the independent agency pay for the state’s audit,” Bresciani said, according to the Fargo Forum. “I’ve never heard of a state auditor’s office being able to audit a legally established, independent agency.”
This from a guy who has a personal chauffeur on the university payroll.
But beyond Bresciani’s rank hypocrisy is the idea that these foundations are independent entities separate from the state. This is where some of my work from last year comes in.
After reading an article from 2013 about the amount of time and money Bresciani spends fundraising for the NDSU Development Foundation – according to Forum reporter Kyle Potter, Bresciani spends just a third of his time on administration for the university and the rest doing things like ushering VIP’s to big-ticket concerts and sporting events – I decided I wanted to see where all this money Bresciani was raising was going.
But when I requested a look at the expenditures by the foundation, I was told it wasn’t public record because the Development Foundation isn’t a public entity(the university did provide me with specifics about reimbursements for Bresciani). So I filed a complaint witih the AG’s office, because I think the NDSU Development Foundation is a public entity, and I think when a public official like Bresciani spends 66 percent of his time fundraising, where that money goes and how it is used should be a public record.
The AG’s office agreed with me. You can read his opinion here.
Now that opinion looms large as lawmakers push to audit these foundations, and the foundations are thinking about challenging that opinion from last year in court:
One member of the executive committee, Jim Roers, said the NDSU foundation should use this as an opportunity to challenge the original attorney general ruling that made the foundation a public entity last year.
“We shouldn’t have rolled over on that,” he said, adding that now was the time to “try to delineate why we are not part of the university system and not subject to the rules and regulations.”
But the idea that these foundations, which are woven into the financial fabric of the universities and which benefit from no small amount of taxpayer dollars or work by state officials, are separate entities is a little ridiculous.
Especially when the taxpayers are often on the hook when the foundations fail. When the UND Research Foundation fell flat on its face with the REAC Building project, who had to bail them out?
When the Dickinson State University Foundation couldn’t make good on its scholarship commitments who had to bail them out?
There’s no question that these foundations, for the most part, are a boon to the institutions they serve. But allowing them to operate independent of state oversight when they represent massive potential liabilities for taxpayers is foolhardy.
The idea that state institutions or agencies can spin-off foundations which are independent from state oversight and transparency laws is ridiculous. That the people in charge of these foundations are angered and frightened at the idea of state oversight is telling.