Barry Miller: North Dakota University System Mistreats Auditors

As I read the article on the University System Auditor and Chief Compliance Officer being put on administrative leave I wondered how much more the people of North Dakota will stand for in regards to the university system?

As a former internal auditor for NDSU this all seems like “Groundhog Day” to me.

I was the internal auditor and NDSU from November 2006 to November 2008. I was asked to resign from NDSU after I found discrepancies in audits in the agriculture and architecture areas regarding policy violations. In May 2010 I wrote an email to then Chancellor Goetz and the members of the SBHE addressing issues that happened to me at NDSU (read it here).

During my tenure at NDSU, after several audits and in conversations and observances of the university, it was becoming apparent that certain people are expected to abide by policies while others were not held to the same standards. In fact, in a letter to Vice President of Finance at the time – John Adams – on that particular topic in October 2008, I basically stated that certain departments should not be allowed to avoid NDSU policies just because they were vocal.

I also had a conversation with the NDSU Provost in his office a couple weeks before my forced resignation in which the Provost said to me (I’m paraphrasing) that during his time at NDSU he has seen people come into university and try to make a difference and change things, and their time at the university was short lived. He further stated that NDSU has its own way of doing things, it may not be the right way, but it gets things done.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]”It was at that point that I knew my time at NDSU would be short.  This “our way or the highway” mentality of the supposed leaders/administrators does not allow any auditors to effectively do their job.” [/mks_pullquote]

It was at that point that I knew my time at NDSU would be short. This “our way or the highway” mentality of the supposed leaders/administrators does not allow any auditors to effectively do their job.

It appears that Mr. Carlson is now facing the same fate as I did just for doing his job. He is correct in the fact that they can manufacture issues that can be easily explained but will probably never be given the chance to clarify the issues.

Like Mr. Carlson my performance evaluations were positive.

What is of particular concern is why the chair of the audit committee is not the one to meet with Mr. Carlson and give him the notice. Why is the staff at university system involved in this? In fact, for an internal auditor to work efficiently they should not report to anyone in management except for daily administrative functions, rather they should report directly to the audit committee and the board.

In my email to the SBHE on May 10, 2010 I stated:

“I firmly believe that if the Internal Audit Department had reported to the SBHE office in Bismarck and not directly to the President or VP of their respective colleges (both at NDSU and UND) the Internal Audit staff would have the flexibility to perform meaningful audits and not be asked to resign at the whim of the management of that particular institution. In fact, I believe that audit staff at these universities should be increased. NDSU has 1 staff while UND has 2, which is way too small and limits what they can do. Perhaps that is what the universities want as they have not agreed with the audit recommendation from the State Auditors’ Office to have Internal Audit Staff report to Bismarck.”

For an effective Internal Audit Department, only the audit committee or the board should have the right to be involved in personnel decisions of the internal auditor. Why is the board not involved in this? Where is the board on this? Why is the board conveniently silent on this issue?

[mks_pullquote align=”left” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]”I have come to the conclusion that agencies, boards and commissions, universities and bureaucrats all want auditors in name only to make the public feel they truly are concerned about what is going on within their respective area. However they do all they can to circumvent the auditors for doing their job.” [/mks_pullquote]

I have come to the conclusion that agencies, boards and commissions, universities and bureaucrats all want auditors in name only to make the public feel they truly are concerned about what is going on within their respective area. However they do all they can to circumvent the auditors for doing their job.

Mainly it’s out of fear or lack of knowledge of the role of an internal auditor.

The role of internal audit is to provide independent assurance that risk management, governance and internal control processes of an organization are operating effectively. Internal auditors are important to the success of an organization, but sadly many that are being audited are fearful that the auditor will discover something wrong and try to point auditors in other directions or take audit findings as personal failures on their part and become fearful for their own job and work to push auditors out when issues are identified.

Where are the leaders in North Dakota? Sadly it appears we have no leaders in North Dakota. Only those with an ego who want their name in public but lack the wherewithal to tackle tough challenges and show integrity and honesty. We are in a sad state. The people of North Dakota including the governor (who appoints the board members) and the legislators need to stand up and say enough is enough.

People in North Dakota need to stand up and say enough is enough.

I am writing this as a taxpayer of North Dakota who is sick and tired of people who have government appointments and government positions thinking they can do whatever they want with no accountability or oversight. I am coming forward with my concerns and am ready to face the backlash that NDUS apologists will use to try to discredit me and Carlson and Franzen. I’m willing to stand up for what is right, why can’t any of the SBHE members or governor or legislators do the same?

Are their egos so big that they are willing to be ignorant of the issues? When will they take seriously the fiduciary responsibility they have as elected leaders of ND and appointed board members?

In my opinion, the SBHE should immediately call a special meeting, take back the control of the university system and reinstate Carlson and Franzen. But sadly I feel they won’t do that either because they are scared of the university presidents or are ill equipped to do the job that is expected of them as appointed board members.

If they can’t do what is right, I feel they should all resign.

Rob Port is the editor of SayAnythingBlog.com, a columnist for the Forum News Service, and host of the Plain Talk Podcast which you can subscribe to by clicking here.

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