FARGO — State auditors found that an administrator at the North Dakota State College of Science was directly involved in hiring a consulting firm that employed his wife, a link that college managers tried to hide from investigators.
Tony Grindberg, the college’s vice president of workforce affairs, was involved in hiring Flint Group, where his wife, Karen Grindberg, is chief financial officer, to promote a career workforce academy the college is working to establish, according to state auditors.
The failure to disclose the conflict of interest violates policies of the North Dakota University System and possibly a state law, according to an audit report released on Monday, April 15.
The undisclosed conflict of interest arose in securing a $39,500 contract to devise a strategic plan for the proposed career academy, and was documented in “numerous” emails managers at the North Dakota State College of Science failed to provide to auditors, the report said.
Grindberg, who’s also a Fargo city commissioner and is a former state senator, was “closely and directly involved in the procurement of consulting services from Flint Group, and President (John) Richman was aware of Mr. Grindberg’s involvement,” the report said.
Both Richman and Grindberg said, however, that it was Richman who hired Flint Group, and Grindberg’s role was that of a go-between and “courier of information.”
“I made that selection,” Richman said. “I did that with a telephone call. Tony’s involvement was proper,” and limited to funneling information.
“Tony was simply serving as a courier of information,” Richman added.
Initially, the College of Science intended to hire a faculty member of Minnesota State University Moorhead to conduct the strategic plan. But that person backed out and Denise Jonas, director for career and technical education for the Cass County Career and Technical Education Virtual Center, suggested Flint Group, Grindberg said.
“I was helping coordinate on behalf of the college,” he said. "I was involved in coordination, but not in final decision."
Karen Grindberg’s affiliation with Flint Group was known by administrators at NDSCS and others who are involved in the career academy initiative, Richman said.
“It was widely known,” he said. “We knew. Everybody knew.”
Grindberg filled out a “statement of business interest” form months before the decision to hire a consultant to draft the strategic plan, he said.
“My private consulting business is what I thought I should disclose,” Grindberg said. “Obviously I did that. Should I have (mentioned my wife’s work affiliation)? Probably.”
Citing email correspondence involving another NDSCS administrator, auditors concluded that both Grindberg and Richman were aware of the conflict of interest policy involving spouses, but did not follow the policy.
Emails and related documents obtained by the auditors revealed the following actions, according to the report:
Grindberg was “personally involved in recommending and engaging Flint Group” for the consulting services.
Grindberg submitted a written request for proposal to Flint Group, and received a written proposal from the firm.
In an email exchange another firm, Praxis, was suggested as a better candidate for the project. However, the auditors noted, “Mr. Grindberg stated he was hesitant to use Praxis,” which is a strategic partner of Flint Group.
Grindberg forwarded or copied Richman on correspondence involving the request for proposal and forwarded a copy of the Flint proposal, and Richman responded to Grindberg’s email.
Grindberg proposed modifications to the proposal, including specific payment terms.
Grindberg submitted the proposed contract to Flint Group’s CEO, Roger Reierson.
Auditors obtained those emails despite assertions from Dennis Gladen, the college’s vice president for administrative affairs, that there was no email correspondence “regarding a proposal or procurement of services for the Career Academy between NDSCS and Flint Group."
The auditors received the emails through a request to the North Dakota University System office.
Richman said there was never any attempt to “obstruct or mislead” the auditors. The auditors never submitted a detailed request for records to NDSCS, as they later did with the university system office, he said.
“Had NDSCS received a detailed request akin to the one received by the NDUS, it could have easily directed its IT professionals to conduct the search, returning the same or substantially similar results to those provided by the NDUS IT professionals,” Richman said in a written response to the auditor’s report.
Auditors also concluded that the State Board of Higher Education had not given clear authorization to pursue the career academy, among other initiatives that were not specified.
“NDSCS is diverting time and resources from existing academic programs for various strategic planning efforts without having first obtained clear authorization from the SBHE,” the report said.
But Richman said, and auditors noted, that the career academy was included within his goals, which the State Board of Higher Education approved.
In a statement accompanying the report, State Auditor Joshua Gallion called the findings “concerning.”
He said: “The activities we’ve discovered during our audit are concerning, and the report points to several changes that must be made by leadership at NDSCS to get back on track. Citizens should feel assured their tax dollars are used responsibly. That begins with integrity and transparency from the top down.”
Chancellor Mark Hagerott, in written responses to the audit, agreed with changes auditors recommended to improve procedures.
Hagerott did not respond to The Forum's request for comment on the auditors’ indication that emails they had requested were not provided by NDSCS. The college has campuses in Wahpeton and Fargo.