NDUS investigation finds improper procurement in DSU contract

Multiple Eide Bailly Fraud Hotline complaints prompted an NDUS investigation that concluded findings that DSU was improper in their informal procurement process for instructional design with Wyoming-based Learning Corps.

Multiple Eide Bailly Fraud Hotline complaints prompted an NDUS investigation that concluded findings that DSU violated “at least seven laws or procedures” during an informal procurement process for instructional design with Wyoming based Learning Corps. (Dickinson Press File Photo)
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A report released in late June by the North Dakota University System’s Office of Compliance and Ethics detailed Dickinson State University’s procurement of a Wyoming-based company for instructional design and how the university’s process was not in compliance with North Dakota Century Code, the North Dakota State Board of Higher Education policy, North Dakota University System procedures and commonly accepted procurement practices.

“The allegations regarding improper procurement for Instructional Design...were supported by the investigation,” Karol Riedman and Dirk Huggett’s June 11 report concluded. “To reduce the likelihood of similar concerns in the future, and due to the multiple violations, recommendations to improve training, process and oversight of the procurement process were discussed with DSU.”

According to NDUS Chancellor Mark Hagerott, the context of the errors by DSU are important to consider in light of the severe time pressures related to the CARES Act funds and the system’s desire to quickly address the need for multiple modes of teaching and learning needed amidst the coronavirus pandemic in 2020 — in spite of, “pressure from faculty who resisted multimode delivery plans.”

“The past year has been incredibly difficult for the North Dakota University System,” Hagerott said in a memo attached to the investigative report. “...It appears that the primary errors were made by a staff member who is no longer employed at DSU, though individuals are not identified so this might be incorrect. While, in hindsight, it is correct that DSU should not have entrusted him with this responsibility, in real time DSU had to use available assets to do what is best for students.”

Findings of NDUS Investigations and response

The state of North Dakota requires that purchases of at least $10,000, but less than $50,000, solicit informal bids from three vendors; or post it on the bidders sites for the state; or complete an alternative procurement form. Documentation of this solicitation is required.


A series of open record requests provided documents that were detailed in a series of complaints forwarded to the Eide Bailly Fraud Hotline, between Feb. 26 and May 4, 2021, prompting an investigation into the allegations of improper procurement. Their conclusions found that DSU’s procurement “was in violation of at least seven laws or procedures and did not use any common procurement templates” available NDUS-wide for shared bidding and award processes and that allegations of conflict of interest were unsupported by the investigation.

The investigation into improper procurement concluded, “the allegations regarding improper procurement for Instructional Design were supported by the investigation.”

The NDUS system proposed a plan to bring DSU procurement into compliance with North Dakota Century Code, the North Dakota State Board of Higher Education policy, North Dakota University System procedures and commonly accepted procurement practices.

All purchases of $10,000 or more will now require prior written approval of the Chief Financial Officer or Controller; approval cannot be given unless all procurement rules are fully complied with, including documentation requirements; and the additional approval process will be worked into DSU’s automated purchasing system.

DSU has further requested that the added requirement that on-campus procurement training for staff, faculty and administration cover all levels of procurement remain a permanent process.


Steve Easton2.jpg
Dickinson State University President Steve Easton. (Dickinson Press file photo)

In response to the investigation’s findings, Dickinson State University President Dr. Stephen Easton spoke with The Press and detailed the errors made and path forward for the university.

“At some point, I reached out to the person I knew who had the most experience teaching in remote environments, my former colleague at the University of Wyoming, Dr. Maggi Murdock, to see if she could identify someone who might provide this training or if she might be interested in doing so...After Dr. Murdock’s indication that she planned to form a company to submit a proposal, I advised Dr. Debora Dragseth, our new Vice President of Academic Affairs and Provost, that I would have nothing further to do with the procurement process, as I did not want to suggest a preference for Dr. Murdock’s new firm,” Easton said. “As a new VPAA/Provost who had been in that position for only about two weeks, Dr. Dragseth had not been through the level of procurement training needed for the matter. It is my understanding that she turned the procurement over to an Academic Affairs employee who had completed this training. In this procurement process, Dr. Murdock’s firm, Learning Corps LLC, was selected. Learning Corps fulfilled its contract and provided strong training for our faculty that benefited our students.”

Dr. Debora Dragseth, Vice President of Academic Affairs for Dickinson State University. (Dickinson Press file photo)

Dragseth echoed the sentiments of Easton, saying the process should have been better handled but ultimately the university and its students benefited.

“The State of North Dakota’s procurement process holds each campus responsible for obtaining maximum value from expenditures of funds that are administered through university accounts, ensuring that all procedural requirements are met. In regard to the process of hiring Learning Corps, LLC, the University was acting in good faith and our employees are not guilty of fraud or malfeasance,” Dragseth said. “While, in hindsight, the process might have been more carefully documented, ultimately our students benefited from the enhancement of modalities that Dickinson State University (DSU) undertook during the pandemic.”

The Path forward

“In response to these reports of procurement challenges, we have taken several steps to improve our procurement process, including a presentation on procurement at our August 2021 kickoff to the academic year and adoption of a ticket system that requires advance review of forms and approval before purchases above $10,000,” Easton said. “Although I was not directly involved in the procurement process for the remote teaching resiliency training, I am responsible for it as DSU President, so I accept responsibility for errors in the process. It is good that we have improved our process, but it would have been better if we had recognized flaws before June of 2021.”


According to Easton, the plan moving forward is to continue with the increased scrutiny process beyond the NDUS suggested period, ending in December 2021, as he believes the new system is actually a better, albeit slower, process.

“I stand behind my efforts to get resources to DSU that help our students and faculty. Sometimes, our efforts to bring helpful resources to DSU will involve reaching out to those we know who might be able to help DSU. When it will help DSU, I will continue those efforts and encourage others to do so, as well.”

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