Panel to look 'very thoughtfully' at audit showing conflict of interest at NDSCS
FARGO — Members of a State Board of Higher Education oversight committee are withholding comment on an audit of the North Dakota State College of Science that found that a vice president was “directly involved” in hiring a consulting firm without disclosing that his wife works as an executive in the company.
The board’s audit committee on Tuesday, April 16, established a timeline to consider the findings of the performance audit by the State Auditor’s Office that examined a contract awarded to the Flint Group to draft a strategic plan for a career academy the college is working to establish in either Fargo or West Fargo.
Kathleen Neset, who heads the audit committee, said the board wants to reassure students, faculty and staff at the North Dakota State College of Science that it will thoroughly review the findings of the audit, which was made public Monday, April 15.
“We will look at this very thoughtfully,” she said.
NDSCS President John Richman and his administration will have until May 1 to respond to the audit’s findings, she said.
“We know time is needed,” Neset added. The audit committee will discuss the audit and NDSCS response when it meets May 15, and the matter is likely to go before the full State Board of Higher Education at its May 30 meeting, she said.
One of the audit’s major focuses concerned a $39,500 contract between the college and Flint Group, hired to write a strategic plan for a career academy to help develop the state’s workforce.
Grindberg’s wife is Flint Group’s chief financial officer — a connection Richman said was well known by those involved in the contract process, though not revealed officially in a disclosure Grindberg filled out months before the contract discussions began.
State auditors determined that Tony Grindberg, the college’s vice president of workforce affairs, was “closely and directly involved in the procurement of consulting services from Flint Group, and President Richman was aware of Mr. Grindberg’s involvement.”
To support its conclusion, the audit report cited emails auditors said showed Grindberg was “personally involved in recommending Flint Group” for the consulting services, and was involved in email exchanges concerning the contract.
Richman said the decision to hire Flint Group was his alone. He described Grindberg’s role as that of a “courier of information.”
Grindberg, a former state senator, serves on the Fargo City Commission.
The decision to hire Flint Group was made after another potential vendor withdrew from consideration. Praxis, a firm owned by the holding company that also owns Flint Group, also was discussed as a potential consultant for the strategic plan.
Money to pay for the Flint Group contract came from surplus funds for the South East Education Cooperative, a consortium of public and private schools.
Auditors concluded the cooperative’s governing board had not given “separate authorization” to spend the money on the consulting contract, but reported that payment was requested by the cooperative’s executive director, Kyle Davison, a state senator from Fargo.
In an interview and in a written response to the auditors, Richman said he does not believe NDSCS, which has campuses in Wahpeton and Fargo, violated any policies of the North Dakota University System or state law.
Roger Reierson, Flint Group’s chief executive officer, said Richman contacted him about the consulting contract.
“We worked out the contract with President Richman and did the work as to the scope” of the project, he said. “We were happy to do the work. We’re hoping the academy can get some legs and get built. It would be great for the Fargo-Moorhead community.”