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Devils Lake Journal - Devils Lake, ND
  • Audit questions NDSU, UND student fee policies

  • BISMARCK, N.D. (AP) — A new audit questions how the University of North Dakota and North Dakota State University use student fees, noting that the money has been spent on a $20,000 employee buyout, iPads for a dean and other school employees, and first-class plane tickets for a recruiting trip to India.


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  • BISMARCK, N.D. (AP) — A new audit questions how the University of North Dakota and North Dakota State University use student fees, noting that the money has been spent on a $20,000 employee buyout, iPads for a dean and other school employees, and first-class plane tickets for a recruiting trip to India.
    The report, obtained Tuesday by The Associated Press from the North Dakota state auditor's office, also shows that some academic departments have used fees to build up large reserve funds, one of which the audit called a potential "slush fund." Some of those funds accumulated hundreds of thousands of dollars.
    "We do not agree with program fees being established and/or used to provide a dean or a department with a rainy-day fund or a pot of money which basically sits unused," the audit said, adding that fees also shouldn't be used for "various discretionary projects."
    The universities disputed elements of the report, saying the funds weren't misused. Both charge their students fees in addition to tuition.
    The audit is scheduled to be presented Thursday to legislative committee that reviews audit reports.
    NDSU's engineering and architectural college sets aside 5 percent of its fees for the dean's use, and those fees equaled almost $1,000 per student in the fall 2010 semester. The audit noted that in one instance, more than $20,000 in fees was used to make a severance payment to an NDSU employee, who was not identified in the report.
    Money from a $5 fee UND students must pay to get an official copy of their college transcripts was used to send the dean of UND's graduate school to a workshop in Puerto Rico at a cost of $5,500 and to buy iPads for the dean and four employees costing $3,000.
    That transcript-fee fund had more than $385,000 in June 2011.
    The report also noted that UND's business school accumulated a $370,000 reserve after raising its per-semester fee on business school students from $100 to $150 before the fall semester in 2007. NDSU's pharmacy program regularly kept a reserve of more than $400,000, including one year when it was more than $900,000.
    In a written response, NDSU argued its pharmacy reserve funds were reasonable.
    "The use of fees in each respective program mirrors common practices at similar universities nationwide," the school said. "Cash balances in (the pharmacy program's) fee fund, and other funds noted by the auditors, are maintained at a fiscally prudent level in order to cover future obligations without running deficits."
    NDSU also argued that the school and the Board of Higher Education had not established specific policies for the use of some fees. The auditor replied that NDSU's stance would allow the school "to charge a fee which will create a slush fund for the department or division's use."
    Page 2 of 2 - "We do not concur fees should be established in such a manner," the audit says.
    NDSU spokeswoman Laura McDaniel said Tuesday that the university would defer additional comment on the audit until the legislative committee's review Thursday. UND President Robert Kelley said in a statement that the school would attempt to "understand and resolve outstanding concerns."
    "We invite and respect this performance audit feedback, and we will use it as a guide to continuously improve UND's financial operations, and better serve our students and the state of North Dakota," Kelley said.
    Duaine Espegard, president of North Dakota's Board of Higher Education, did not respond Tuesday to phone and email messages for comment.
    Other questioned spending cited in the audit included more than $11,000 on first-class plane tickets, funded by fees paid by students applying for NDSU graduate programs, for a recruiting trip to India by the graduate school dean. NDSU spent another $5,500 on "homecoming hankies."
    UND spent $4,500 on "Greek Life" T-shirts and a consultant to advise the school on how it could "better support Greek Life, and how Greek Life can work better with the university." And fees paid by UND law students funded $16,200 in scholarships for Norwegian students who attended the school in an exchange program, according to the audit.
    The audit also said there were inconsistencies in the fee policies of the two schools, which are the largest of the 11 colleges in North Dakota's university system. NDSU charges freshman students a "new student fee" that pays for drug and alcohol abuse counseling and tutoring. UND charges all of its students the same fee.
    Both NDSU and UND have mandatory fees, which are paid by all students in addition to tuition, and fees that are paid by students who take specific academic coursework, such as classes in law, architecture or pharmacy.
    NDSU collected $38.8 million in mandatory student fees from July 2007 through December 2010, according to the audit. The University of North Dakota collected $46.6 million during the same period.
     

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