Board to discuss House proposal to separate auditors, attorneys from system

March 24, 2015

At its last meeting, the State Board of Higher Education tabled taking a position on sections of HB 1003 that call for the legal and audit functions currently overseen by staff members of the North Dakota University System to be moved to staff in the Attorney General and State Auditor’s offices.

The Board was concerned it didn’t have enough information on how the change would work, so it extended invitations to representatives from those offices to attend its next meeting on March 26. The meeting starts at 12:15 at Bismarck State College, with discussion of those items first on the agenda. Tom Trenbeath will be there representing the Attorney General’s Office. Bob Peterson will represent the State Auditor’s Office.

Internal analysis of the proposal is as follows:

HB1003 Proposal Description Action Consequences
Section 4 Appropriation – State Auditor
  • Removes seven FTE and $771,964 from NDUS System Office and $431,627 from campus budgets;
  • Provides 6.0 FTE and $1.2 million to State Auditor’s Office
  • Requires competitive hiring process
  • Terminate current staff ($102K unfunded)
  • New SAO average salary $64,250; current average $89,575
  • Likely lose 56 years of higher ed experience and 72 years of professional internal audit experience
  • Loss of internal audit function
  • Increased risk of noncompliance
  • Consulting costs passed along to NDUS, unfunded
  • Terminate current staff ($102K unfunded)
  • New SAO average salary $64,250; current average $89,575
  • Likely lose 56 years of higher ed experience and 72 years of professional internal audit experience
  • Loss of internal audit function
  • Increased risk of noncompliance
  • Consulting costs passed along to NDUS, unfunded
Section 5 Appropriation – Attorney General
  • Removes 8.6 FTE and $2.6 million from NDUS
  • Provides 6 FTE and $1.6 million to AG’s office
  • Requires competitive hiring process
  • Terminate current staff ($383 K unfunded)
  • New AG average salary $85,500; current average $124,435
  • Likely loss of 80 years of higher ed experience and 130 years of professional legal experience
  • Terminate current staff ($383 K unfunded)
  • New AG average salary $85,500; current average $124,435
  • Likely loss of 80 years of higher ed experience and 130 years of professional legal experience
Section 21 State Board of Higher Education Audits
  • Authorizes State Auditor’s Office to employ audit manager and determine NDUS audits, following consultation with Board
  • Does not require SAO to perform duties that would compromise independence
  • Permits SAO to asses NDUS for consultants
  • Shifts role from internal to external audit function
  • Possible consultant costs passed along to NDUS, without funding availability
  • Shifts role from internal to external audit function
  • Possible consultant costs passed along to NDUS, without funding availability
Section 22 Amendment – assistant and special assistant AG appointment, revocation and compensation
  • Prohibits the Board from employing legal counsel