A committee of the North Dakota Board of Higher Education wants to give campus internal auditors greater independence, but under a proposal the auditors would still be hired and fired by campus presidents.
The Budget, Audit and Finance Committee discussed on Wednesday new policies regarding internal auditors at North Dakota State University and the University of North Dakota.
The plan gives the board's committee greater oversight of the internal auditors under the proposal, but campus presidents will still be responsible for hiring decisions, evaluations and setting salaries.
John Grettum, audit manager with North Dakota's Office of the State Auditor, said the proposal is an improvement because it gives the committee some oversight, but does not go far enough.
"In my opinion, it would be better if the board took over that duty," said Grettum, referring to the hiring and firing power.
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The board previously decided to change how internal auditors report in order to ensure their independence.
On Wednesday, committee members discussed how to implement that change. They plan to keep working on the policy and gather input from state auditors.
Laura Glatt, vice chancellor for administrative affairs, acknowledged during the meeting that the proposal may not satisfy state auditors, but it aims to find middle ground.
The committee will approve the annual internal audit plan and review the results of the work every six months under the proposal. It also requires internal auditors to notify the president and the committee immediately about fraud or other significant findings.
Board President Jon Backes said it's not practical for the committee to hire and fire internal auditors.
"I don't think an essentially part-time board is the appropriate mechanism for that," Backes said.
The dual reporting relationship should give the auditors independence, Backes said.
"There will be a check and balance in there," Backes said. "We're not going to allow a president to fire the internal auditors before they can come and tell us something."
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NDSU President Dean Bresciani pointed out that there's never been an assertion that any president in the system has ever interfered with an audit process.
"We're finding a solution to a problem that has not yet occurred," Bresciani said.
Only NDSU and UND now have internal auditors.
The system office is in the process of hiring a systemwide internal auditor.
Readers can reach Forum reporter Amy Dalrymple at (701) 241-5590
