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ND higher ed board rejects report clearing Shirvani of fraud

FARGO -- North Dakota's State Board of Higher Education voted Thursday to reject an auditor's report that cleared Chancellor Hamid Shirvani of a fraud allegation after the auditor's emails with the original accuser and several board members, including the newly elected president, was called into question.

During a special meeting, Internal Audit and Risk Management Director Bill Eggert outlined a report based on his investigation into accusations by University System office employee Linda Baeza Porter that Shirvani tried to make graduation and retention rates at North Dakota's two largest universities look bad by using inappropriate comparison schools at a March 18 legislative hearing.

Eggert said the issue came down to two separate considerations: the validity of the data and how Shirvani presented the information to lawmakers.

He said the data checked out.

The presentation was more complex, because he said looking at the numbers alone could lead to the conclusion that Shirvani chose these comparisons to make the University of North Dakota and North Dakota State University look bad. But he said it came down to how it was presented and explained, and the chancellor's notes and accounts of the hearing show the other schools were "aspirational" and meant to be goals.

"I think it kind of pushes the envelope a little bit, but it definitely does not violate State Board policy," Eggert said.

He recommended higher education officials could avoid any future issues with improperly portraying data by hiring an institutional research data manager -- a position that doesn't exist in the state's university system.

But Eggert left the meeting after his presentation, despite being asked by Board President Duaine Espegard to stay in case there were more questions, and missed a 45-minute exchange that questioned the integrity of the report he had just presented.

University System Chief Information Officer Randall Thursby gave board members a five-page response to Eggert's April 24 fraud complaint report that included several copies of what he said were questionable email exchanges between the auditor, Porter and several board members.

Thursby said he looked into that report because of questions he had about how Eggert portrayed a March 20 email from Laura Glatt, vice chancellor for administrative affairs.

"The context in Mr. Eggert's report leaves one with the impression that only Chancellor Shirvani's slide was in question when actually both Ms. Porter's document and the slide were in question," he said.

Thursby also questioned a sharing of information between Porter and board member Kari Reichert, staff adviser Janice Hoffarth and Vice President Kirsten Diederich in the days before the Porter testified to legislators March 27 regarding the fraud allegation. He said they never shared that material with the rest of the board or appropriate university system staff.

Thursby also questioned why Eggert sent Porter a copy of his report on April 23 - a day before release - with the statement, "Verify for accuracy. If you want to change or add use track changes."

Reichert asked how Thursby was qualified to investigate the matter. She said he never asked her to explain any of the emails before raising suspicions during Thursday's meeting.

Hoffarth, too, questioned why she was included in Thursby's report. She said comments by Thursby that could imply that she helped suggest changes to Porter's testimony were untrue.

"Did you ask me, did I make any changes?" she asked. "Guess what? I did not."

Thursby said the chain of communication - especially leaving out some board members and key staff, and some comments that he said questioned if he was spying on their emails -- "really hurts," and also raised serious doubts about the integrity of the audit.

"I think it is a pattern where information itself is passed along by certain board members, and as a result of that, all this information about me was floating out there," he said.

Reichert said it wouldn't be appropriate to approach Thursby when he was being investigated by the auditor. She said she was trying to do her job by listening to an employee's concerns and making sure the matter was appropriately handled.

"Are you suggesting we should have come to you and not our auditor?" she asked.

Shirvani said he was "extremely unhappy" with the issues raised by Thursby. He said the independence of Eggert is now in "serious question," and said there were too many board members involved in Porter's accusation of fraud.

"This is really theatrical nonsense about some simple presentation," he said.

Eggert announced last month that he was resigning effective May 31, saying it was a "dead-end job" and that he didn't like the winters here. Thursby is retiring this summer.

Espegard said he was "dismayed" at the chain of communication and not being included in these discussions and called the credibility of Eggert's report was "not good."

Board member Grant Shaft made a motion to not accept Eggert's report, and the board voted 6-2 to reject the audit. Reichert and student representative Sydney Hull voted no.

After the meeting, Reichert told The Forum she was frustrated that she had "basically been accused" of improper behavior. She said if the board questioned Eggert's integrity, they should launch a proper investigation through an independent auditor instead of using Thursby's claims "as a platform to accuse board members of participating in undermining our auditor's report."

She also said she, Diederich and Hoffarth "never once" accused Shirvani of fraud or misleading legislators.

"What difference is it to me if this chancellor goes or stays, as long as he's effective?" she said. "That's all I care about is that we have an effective chancellor."

Diederich, who was elected at the start of the meeting to be the board's new president beginning July 1, said what happened Thursday can't happen again and that she would work to "mend" the board.

"I don't want any more secret talk going on," she said. "If we're going to be an open board, open records, open meetings, this has to stop."