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President Bresciani, student body president respond to performance audit

NDSU President Dean L. Bresciani and NDSU Student Body President Luke Brodeur testified about a performance audit on student fees at a Legislative Audit and Fiscal Review Committee meeting today in Bismarck.

Bresciani’s message to campus as well as his and Brodeur’s testimony follow. 

Bresciani’s message to campus
Members of our Campus Community- 

As many of you are undoubtedly aware, a recent review of UND and NDSU by the Office of the State Auditor is now a matter of public record and is by many measures critical of the use of student fees at both universities. NDSU and UND will today be responding to that report during the state’s interim Legislative Audit and Fiscal Review Committee meeting. I want you to have considerably more information about that than can be drawn from media coverage of the matter.

There are four important points to understand:
1. The audit is what in North Dakota is referred to as a “performance audit.”  Such audits are very different than the objective, standards-based GAAP (Generally Accepted Accounting Principles) audits with which you are probably far more familiar. Performance audits are a review of practices, policies and compliance from the perspective of the auditors. Analysis and findings are thus subjective and typically reliant largely on the auditor’s experience, understanding and expertise regarding the subject under consideration.

2. It goes without saying that higher education in general and major research universities specifically, are some of largest and most complicated organizations in the country. In the case of North Dakota, that’s certainly the case; one could easily argue that NDSU and UND are by far the two largest “companies” in the state, and experts would certainly agree that the complexity of what we do well exceeds that of other private or state entities.

3. Many if not most of the audit “findings” cited in the current report are based on previous audit findings already reported, and which date back as far as 2007. In other words, they are not new and took place well before NDSU’s current successes and administration.

4. Given the above, I would guess you will hear challenges to our portrayal of our current policies and procedures as “common higher education business practices.”  And therein lies the dilemma UND and NDSU are facing today. 

The bottom line is that NDSU’s use of student fees, in my experience with nine public universities from coast to coast, is appropriate and actually rather commendable. As a matter of fact, I suspect our peers nationwide would on reflection of the situation we face, be nervous that they don’t measure up to NDSU’s current policies and practices! 

Our meeting with the committee will provide us an opportunity to demonstrate our good if not great stewardship of state resources, accountability, and transparency, while highlighting our exceptional contributions to our state and nation and reflecting the thoughtful and dedicated work of our faculty, staff and students. We are good at what we do and I value any chance to share that with legislative and civic leaders and the people we serve. I am also resolute in my belief that we all work with a focus on and commitment to students and the appropriate handling of student fees, and I am confident that—at the end of the day—will become obvious.

Although the above probably gives you a good sense of our position, I’ve attached two documents.  One is my legislative statement to the record regarding our official response to the audit, and the second is the same of our student body president. I consider the latter particularly important given that the purported concern is for the appropriate use of student fees, and as our student body president will point out, we are perhaps a national model for the involvement and concurrence of our students in how we go about that.

Thank you for your time and consideration, and most importantly, for the principled and exceptional work you contribute to North Dakota.

Dean L. Bresciani, President
North Dakota State University

Bresciani’s committee testimony
Chairman Dan Ruby and Committee Members-

For the record I am Dr. Dean Bresciani, the president of North Dakota State University. As a matter of introduction, it may be helpful for me to provide some context regarding my background and perspective on auditing. 

I am a career higher education professional with 30 years of experience spanning nine public institutions. I’ve served in graduate and undergraduate faculty, research, and administrative roles in university settings around the nation, including five institutions in the Midwest. My educational background is in higher education finance, with a doctoral minor in economics, and I’ve taught finance, business management, and higher education administration coursework at doctoral, masters, and undergraduate levels. In light of that, I believe I have a strong understanding of good business management, common practices in our nation’s best universities, and of auditing therein. In fact, I value and appreciate auditing as one of the most important management tools leaders have at their disposal and I’ll highlight that point in my following remarks.

I’d like to also introduce our Provost Dr. Bruce Rafert, who joined NDSU last year after serving for seven years as vice provost at Clemson University. He has over 40 years of academic experience as a teacher, researcher, research institute director, physics department chair, dean, and vice provost in both private and doctoral public national research universities.  Dr. Rafert has been recognized as both teacher of the year and researcher of the year, and received the CSGS outstanding contributions award in graduate education in 2010—essentially, the graduate dean of the year.  He has served on the U.S. Army Science Board, founded three research institutes, and developed the world’s first Ph.D. program in Space Sciences. His scientific contributions span physics pedagogy, autonomous astronomical observatories, stellar astrophysics of binary star systems, and remote sensing physics where he was the scientific and technical founder of the U.S. Air Force hyper spectral imaging effort, and designed the optical payload of the world’s first orbiting hyper spectral system.  In short, he literally “is” a rocket scientist.

I could go on and on introducing the senior leadership of NDSU. But my point is only to suggest that our university benefits from a collective breadth of higher education leadership experience of nationally respected expertise and perspective.

That all said, while the audit before you seems to often draw from past audit findings dating back some five years ago to 2007, I obviously can’t “undo” concerns from well before the arrival of current NDSU leadership. However, the record will show and in fact the auditors have noted in their report that soon after arrival at NDSU some two years ago I immediately undertook efforts to reorganize our internal auditing function, bolster and substantially improve adherence to state and campus operational policies, and create a culture of accountability that set a high expectation for compliance. Many of those efforts were well covered by the media, which added helpful attention to our compliance initiatives. I believe we’ve come a long way in the past two years, and we are proud of the fact that our most recent objective-type operational audit was very positive, although we note from their report that our state auditors assert that observation is irrelevant and misleading.

Complementing the efforts just highlighted, NDSU has also for some time utilized a variety of student advisory groups to approve initiation of and annually review student fee policies within our academic and student affairs areas.  Additionally, last year we created an umbrella “Student Fee Advisory Board” for review and approval of mandatory student fees.  That board is chaired by the student body president, who is here today to confirm the substantial involvement and satisfaction of students with the current environment of student fee review at NDSU.

I recognize, though, that we are an exceptionally large and complex organization involving an over $300 million dollar annual operating budget, thousands of staff many of which turn over on a regular basis, and likely millions of business transactions every year. We would be kidding ourselves if, even under the best of circumstances, we imagined no mistakes are ever made.  That said, when such mistakes are made and discovered they are addressed—and in situations where those mistakes were the result of careless work or willful disregard of policies, disciplinary action up to and including separation from the university now takes place.

Toward the same end and pertinent to the performance audit in front of you, NDSU has in the past two years aggressively worked to simplify and bring more transparency to our collection and use of tuition and student fees.  As you may know, the SBHE unanimously approved and this fall NDSU will initiate the “Student Success Tuition Model.”  That model (in Phase I) encourages students to take full 15 credit course loads leading to better retention and graduation in four years and also eliminates most of the confusing array of program fees and (in Phase II) course fees which we are discussing today, by consolidating them in a single “tuition” charge.

In other words…by this time next year, many if not most of the areas of concern identified in the auditor’s report will be moot at NDSU 

Both the State Board of Higher Education, and our state auditors in their report, have recognized and applauded this initiative. Our hope is that it will prove a helpful model for other System schools; we understand that several out of state institutions are studying it as well.

As we turn now to the subjective performance audit at hand, we’d like to thank the State Auditor’s office for the 8-10 months and estimated thousands of hours of work put in to the review; we can only imagine the challenge of the situation for them.  As highlighted above, major research universities are much larger and more complex than typical state agencies. Understanding the nuanced complexities necessary to administer universities, and the expertise-driven discretion requisitely afforded to higher education professionals doing so, no doubt seems unfathomable to those not coming from a higher education background. It would certainly be much easier if there was a policy manual for all aspects and contingencies involved with running a university—but anyone experienced with them or for that matter any large highly complex organization would appreciate the impracticality of that notion. What universities require is a balance of experience, expertise, and judgment with reasonable policy expectations.

We also want to thank the auditors for their ongoing willingness, up to the last possible minute, to discuss and learn more about common operational practices we know to be virtually ubiquitous in higher education—and particularly major research universities. Their willingness to after discussion remove several NDSU audit issues suggests an openness that is appreciated and respected.  And in spite of the auditors various concluding remarks still challenging many common knowledge practices in higher education, with more time to continue those discussions we believe most if not all of the few remaining issues at NDSU might have been resolved. We’re also pleased that in the two circumstances where NDSU agrees that policies were not adhered to, they involve only the bulk purchase of toner cartridges and lab animal food (which the auditors refer to as pet food) and are from 2009—which was two audit periods ago and prior to the current administration. We’ll note nonetheless that the individuals involved in both circumstances are no longer with the university. 

At the end of the day, and although the auditor’s framing of it may not illuminate this critical point, we’re pleased to note that with the exceptions just mentioned, on a strictly objective basis NDSU was found in this audit to be complying with policies and procedures as they are currently stated.  Our intent is to continue doing so, and in coordination with the Chancellor, also continue both reviewing and improving our practices.  That will remain the case if and when policies evolve more specifics in the future.  We will also continue working with state auditors to develop “shared” subjective definitions of compliance; optimally and ostensibly those will reflect common higher education business practices nationwide.

One final clarification we’d like to offer is that NDSU adhered very strictly to the definitions of “agree” and “disagree” provided to us by the Office of the State Auditor.  The auditor’s definitions required complete and absolute agreement both with their entire finding, and as was often challenging—how those findings were framed. Unfortunately, if following their directions, we had no choice but to disagree even when on some points within an item we found common ground. With the chair’s permission I’d like to briefly turn the podium over to Mr. Luke Brodeur, the student body president at NDSU.

Thank you for your consideration of this introduction.  I’d like to now turn to your comments and any questions you may have.  Depending on the specificity required, Provost Bruce Rafert, Vice President for Student Affairs Prakash Mathew, Vice President for Finance and Administration Bruce Bollinger, Mr. Brodeur, and our internal auditor Mr. Eric Miller will provide assistance in responding.

Brodeur’s committee testimony
Mr. Chairman and members of the committee-

As the president stated my name is Luke Brodeur, student body president at NDSU. We felt that it’s important that you hear the students’ perspective on the findings of this audit seeing as it is our dollars being spent and us as students being affected.

There is no question that procedures for use of institutional dollars can constantly be improved. And the points made in this report certainly point out legitimate concerns about mistakes that were made and draw attention to those areas that must be evaluated. However, as has been pointed out several times within the report, those efforts are well underway. Furthermore, I think it’s important for you to know that we as students are directly and constantly involved in discussions about accountability.

A few examples of our involvement would include the creation of the Student Fee Advisory Board, which was largely initiated by our Student Government and of which student members make up the majority. Additionally, when discussions arose about the newly adopted Student Success Tuition Model, our Student Senate put significant energy into discussing and questioning its effect on the student body, and ultimately supported the initiative. Finally, I would point to our Student Activity Fee, which is wholly monitored and allocated by our Student Government. In fact, as finance commissioner for Student Government last year, my entire responsibility was the oversight of the Student Activity Fee and all other cost of education issues.

The amount of effort that our student leadership puts into supervision of these financial affairs is why it was especially disheartening that we were never approached directly while this audit was being conducted. A fact that is especially troubling given that each year our student leadership attends a nationwide Student Government conference, and each year learn more and more that Student Government at NDSU has more knowledge and involvement with cost of education issues than almost all other Student Governments from across the country that we meet with.

Please know that we as student leaders are dedicated to continued diligence in looking out for the best interests of our fellow students, especially concerning these important issues of how our dollars are being spent.

 

 


Student Focused. Land Grant. Research University.

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Vice President for University Relations
North Dakota State University
Phone: +1 (701) 231-1068 - Fax: (701) 231-1989
Campus address: Old Main 204
Mailing address: Dept 6000 PO Box 6050, Fargo, ND 58108-6050
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