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NDSU audit shows public money used on president's house

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The final cost of the North Dakota State University president's house should be reported as $2.6 million and included about $300,000 in public money, said an audit released Wednesday.

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Audit Manager Gordy Smith said NDSU underreported some figures and used more public dollars than the state Board of Higher Education authorized.

"Those public monies, if they were spent here, they weren't spent on something for the university," Smith said.

The house cost $2.2 million, plus $400,000 worth of in-kind donations of architecture fees and other services.

Board members reluctantly gave the OK to use just under $200,000 in public funds on the house after the NDSU Development Foundation refused to pay more than the

$1.9 million it had already spent on the house.

Board members were clear that the money should not come from tuition dollars or taxpayer money.

However, the audit shows that $35,000 from the general fund was used toward the house.

Bruce Bollinger, NDSU's vice president for finance and administration, said that amount was for labor from facilities management staff who did work on the house project.

Chancellor Bill Goetz said the board will have to address the house costs again and decide whether to retroactively approve the use of those funds.

"The board's going to be very, very upset," Goetz said.

Auditors also raised concerns that unfinished work on the president's house was not presented to the board. The 3,934-square-foot basement is unfinished and sod or grass around the majority of the house has not been planted.

The audit also found that certain areas of the NDSU president's house "could be considered unnecessary and added to the cost of the house."

Examples given in the audit include portions of sidewalks that are heated, blinds in the bedrooms that are automated and outdoor restrooms.

Former President Joseph Chapman is referred to several times in the audit.

The home that the foundation leased for the Chapmans during construction of the new home sat vacant for three months and $2,500 monthly lease payments continued to be made.

Foundation representatives indicated to auditors that Chapman wouldn't allow the leased home to be shown to prospective buyers as required by the signed lease. As a result, lease payments had to continue after the house was vacated.

The audit also found that NDSU waited more than four months before requesting from the foundation the $373,855 the foundation agreed to pay NDSU for costs associated with the house. It was paid on April 14.

The audit also mentions Chapman's role in the remodeling of the president's office in Old Main.

"The project appears to have been started rather quickly due to the request of the former president."

A kitchenette was planned in the president's office project, but removed after costs were increasing and the chancellor's office asked questions about the costs, the audit says.

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