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Published May 05, 2010, 10:45 AM

Audit Critical of Building Projects at NDSU and UND

A state audit says capital projects in the North Dakota University System are not adequately monitored.

By: Associated Press, WDAZ

FARGO, N.D. (AP) — Several building projects run by the state university system weren't properly monitored, including construction of a new North Dakota State University president's house that was budgeted for $900,000 and cost $2.2 million, according a state auditor's report released Wednesday.

A lawmaker who had already been critical of spending in the university system said the report should convince some higher education officials to step down. Rep. Bob Skarphol, R-Tioga, said he'll hold up the report when the colleges start asking for money.

"Some of those folks need to say to themselves, 'Maybe I'm not serving the best interest of the institution I represent and maybe I should seriously consider moving to a different position or retiring if that's an option.' And let new and more credible people take their place hopefully," Skarphol said.

"I'm not naming names, but they know who they are," he added.

The state Board of Higher Education ordered the audit after North Dakota State and the University of North Dakota went over budget on new president's homes and NDSU President Joseph Chapman resigned over complaints about his spending habits. The report backed up earlier claims that NDSU failed to accurately report costs on several capital projects.

Board president Richie Smith said the report shows the need for the state to create a position to oversee capital improvements.

"I'm not going to follow people around the campuses to see if they're doing what they're told to do," Smith said. "It's a question of who has the time to monitor that."

Bruce Bollinger, NDSU's vice president of finance and administration, said NDSU agrees with the findings and is reviewing changes in school policies and personnel. Bollinger replaced John Adams, who resigned over the spending flap.

"I think we need to improve on our reputation — and we will," Bollinger said. "I guarantee you that this will not happen in the future."

The NDSU president's house had several unnecessary features, including heated sidewalks, automated blinds and outdoor restrooms, the audit said. The school also failed to document that significant work remains on the house, including a 3,934-square-feet unfinished basement, the audit said.

NDSU also is using public money to make lease payments on a campus building in downtown Fargo that went $3.5 million over its original $20 million price tag, the audit said. The state is waiting for an attorney general's report on the project.

"Joe Chapman did a marvelous job of leading NDSU forward and advancing the institution's reputation among its peers," Skarphol said. "But he did it, I believe, at the expense of his credibility and the credibility of the system as a whole."

Chapman, who suggested an audit in his resignation letter to the board, has moved from Fargo and could not be reached for comment.

Rep. Kathy Hawken, R-Fargo, said NDSU and other schools are taking steps to improve their reporting practices and the report should not be an excuse to hammer away at higher education.

"Let's not get carried away. Let's look at the total picture," she said. "I truly believe that our colleges and universities are economic engines and they do make a difference. We don't want to throw the baby out with the bath water."

The audit also identified these problems:

— A home the NDSU Development Foundation leased for Chapman during construction of the president's house sat vacant for three months while payments continued to be made because Chapman wouldn't allow it to be shown to prospective buyers, as was required by contract.

— Dickinson State failed to get board approval to use student fees to help pay for renovating an activities center.

— Both NDSU and UND split remodeling work of president's offices into smaller projects to avoid asking the board for approval.

— UND failed to accurately report costs for its president's house, which was budgeted for $900,000 and cost $1.3 million.

"You can't undo what's past, but we can learn from what's there," said Alice Brekke, UND budget director. "I tend to be kind of pragmatic about this kind of stuff. We have to do the best we are able to do going forward."

Copyright 2010 The Associated Press.