Auditor Search Notes

Background Regarding Concerns About Search for Chief Auditor
(supporting documents regarding the details herein are available)

Claire Ness
General Counsel, SBHE
On Monday, November 18, 2013, I received an email from Ms. Laura Glatt, the
Vice Chancellor for Financial and Administrative Affairs, informing me and the other
email recipients that Ms. DeAnn Arden Bahn, one of our two remaining external
candidates for the Chief Auditor position, had withdrawn from the search process. The
remaining candidates were Mr. Tim Carlson (an external candidate) and Mr. Eric Miller
(an NDUS auditor who currently reports to Ms. Glatt). Ms. Glatts email was a forward
of a string of messages between her and Ms. Arden Bahn that she had also sent to the
State Board of Higher Education members that day. At the bottom of the string of emails
was a message from Ms. Glatt to Ms. Arden Bahn describing the open meeting interview
environment in exaggerated terms that, in light of other circumstances, may have been
intended to discourage Ms. Arden Bahns continuation in the process.
Later that afternoon, I went in to Ms. Glatts office to discuss our options for
proceeding with the search. She had previously told me Mr. Carlson was considering
withdrawing, and she reiterated that in our meeting. I raised the possibility of having an
external auditing firm manage some of the work until we could restart the search process
at a later date. She said she felt we did not need an external firm because she supported
Mr. Millers candidacy. I acknowledged I had questions both about his skill set (due to
the audit plan he helped develop and that the Board did not like) and his independence
(due to the fact he currently reports to Laura but would then have to turn around and audit
her if he was put in the Chief Auditor role). We also discussed the possibility of having
an interim auditor.
On my way out of the office that evening, I stopped by Ms. Glatts office again. I
said I had read her email to Ms. Arden Bahn regarding the interview environment and
asked her whether she thought it would really be that intimidating to appear before the
Board. Ms. Glatt grew very angry and told me, in no uncertain terms, that she was never
intimidated by the Board, could not have done such a great job for twenty-four years if
she had been intimidated by the Board and found it offensive that I asked. The odd
reaction piqued my curiosity. I said I wasnt asking whether she was intimidated but
whether it would really be as intimidating as she described for the candidates. Instead of
responding, she glowered at me and said You know, Im real tired of your attitude! So
I set down my briefcase and said Ok, lets talk about that. What do you mean by my
attitude? She then proceeded to tell me I have an attitude and a chip on my
shoulder, in addition to other derogatory statements. She informed me I should stay out
of her business and told me what a good job she had done for twenty-four years. She
referred to my questions about the approval of Challenge Fund grants as an example of
my intruding on her expertise and getting in her wheelhouse. I let her know I needed
information about matters that had legal implications for the Board (such as capital
construction, etc), even if she handled them. I said our staff need to work together and
share information as we all have different roles to play in support of the Board and
system. The conversation was unpleasant.
Prior to the events of November 18, I had been curious about the way in which
Ms. Glatt had managed the search process for the Chief Auditor. The events of
November 18 raised additional red flags for me, based on my prior experience with
compliance matters. The following are some of the issues that led to my concerns:
Ms. Glatt had never raised the issue of a potential conflict regarding her
role as head of the search committee and the candidacy of an individual
who reports to her.
Ms. Glatt was the head of the search committee for the Chief Auditor, who
will report directly to the Board, but she had not invited any Board
members to participate on the committee. Nor had she invited the Chief
Compliance Office or General Counsel (me), both of whom will work
closely with the Auditor on Board matters.
o On Oct. 15, 2013, I emailed President Diederich to see whether she
wanted to participate on the search committee, and she said yes.
o On Oct. 16, 2013, I emailed Chancellor Skogen to let him know
Pres. Diederich wanted to be on the committee and also to ask
whether I could participate. He said Chief Compliance Office
Kirsten Franzen also had asked. He informed me only one of us
could be on the committee. Ms. Franzen and I spoke, and we
decided I would be the committee member.
Ms. Glatt established the points system for scoring Chief Auditor
candidates. In 2012, before Mr. Miller, her subordinate, was a candidate
for the position, she developed a scoring matrix. On October 18, 2013,
she changed the scoring matrix. The new scoring matrix favored Mr.
Miller in a few ways.
o Although Ms. Glatt asked Pres. Diederich to approve the (new)
points allocation by email, she did not inform Pres. Diederich that
there had been a different points system used earlier in the search
or share the earlier points system with her.
o In late October before the first round of interviews for the most
recent set of candidates I asked Laura for some background on
the points system she developed. (I was unaware at the time that
there had been a different points system earlier in the process.)
She immediately grew angry and said I was accusing her of
wrongdoing. I said I wasnt. Rather, I was trying to understand
how she developed the system as it weighted some things
differently than I expected.
On November 5, the screening committee held video interviews of the

candidates. During a break, I went in to Ms. Glatts office to discuss the
interviews. She made derogatory comments about Mr. Carlsons age. We

could not see him during the interview as his video equipment was not
working. Ms. Glatt based her comments (You have to wonder how old
he really is!) on his years of experience and his voice, which sounded
shaky.
Not long after the video interviews, Ms. Glatt informed me Mr. Carlson
was considering withdrawing his candidacy. I stopped by her office to ask
why. She informed me she had spoken to him on the phone and alleged
that he had expressed concerns about the open nature of the upcoming inperson interview. She said he told her he had several questions for the
Board that could take a couple hours to address. She also said We do
not need an auditor who does not like to be open, implying her
conversation with Mr. Carlson raised red flags about his ethics and
judgment. This was very inconsistent with what I learned of him during
his video interview.
I raised the issue of Ms. Glatts potential conflict with President Diederich as well and
advised her to avoid any appearance of conflict or actual conflict impact the search.
Early on November 21, 2013, President Diederich and I once again discussed Ms.
Glatts potential conflict of interest with regard to the Chief Auditor search. The Board
then interviewed both Mr. Carlson and Mr. Miller, the two remaining candidates for
Chief Auditor. The Board members and advisors who participated in the interviews
unanimously preferred Mr. Carlson to Mr. Miller after the interviews but did not take a
final vote. They agreed Mr. Miller was no longer in the running for the Chief Auditor
position, however. After the meeting, President Diederich and I discussed Ms. Glatts
manipulation of the scoring process for Chief Auditor candidates.
On November 22, 2013, I received an unexpected call from President Diederich
informing me she had spoken with Mr. Carlson about his communications with Ms. Glatt.
President Diederich told me Mr. Carlson confirmed to her that Ms. Glatt had tried to
dissuade him from continuing his candidacy. Per President Diederich, he also said he
would not authorize a background check by Ms. Glatt. President Diederich asked me to
finalize any work that needed to be done on the search and to immediately end any work
Ms. Glatt was doing on it. She was deeply concerned about Ms. Glatts actions and
directed me not to let her have anything more to do with the search. She then asked me
to arrange a special meeting of the Board to vote on whether Mr. Carlson should be the
Chief Auditor.
After my call with President Diederich, I spoke with Mr. Carlson to discuss the
next steps in the process. He confirmed he was concerned about Ms. Glatts
communications as they seemed not disinterested. He also confirmed he would not
authorize a background check if she was in any way involved in it. He said he believed
the Boards General Counsel should proceed with finalizing any additional work on his
candidacy due to the General Counsels professional responsibilities to the Board. I
agreed to manage the background check and said President Diederich had authorized this.
We discussed the role of professional responsibilities within the NDUS and with the
Board, and he communicated a strong understanding of ethics as well as a commitment to
them.

Auditor Search Notes

Uploaded by

Auditor Search Notes

Uploaded by

Background Regarding Concerns About Search for Chief Auditor

(supporting documents regarding the details herein are available)

On November 5, the screening committee held video interviews of the

interviews. She made derogatory comments about Mr. Carlsons age. We

You might also like