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Patrick Springer, Published May 02 2010

Special audit ordered after death of North Dakota Retirement and Investment Office director

Steve Cochrane’s suicide earlier this month remains a mystery to his family and colleagues.

The tragedy also is a potential cause for concern among thousands of public employees and retirees in North Dakota, given the position Cochrane held.

As director of the North Dakota Retirement and Investment Office, the 53-year-old managed $4.8 billion in investment funds, including retirement plans for public employees and teachers.

As a precaution, the state investment board will order a “special audit” – essentially a forensic audit – to scrutinize transactions and financial records involving the investment funds.

“It’s just a good business practice in a situation where you had someone unexpectedly leave a situation,” said Becky Dorwart, director of internal auditing for MDU Resources in Bismarck, who serves as chairwoman of the audit committee of the State Investment Board.

“It’s trust but verify,” she added. “It’s the proper thing to do.”

Meanwhile, a legislative leader said lawmakers will ask for a briefing on the status of state investments in light of Cochrane’s suicide when an oversight committee meets on May 12.

“I think we need to visit about it,” said Sen. Randel Christmann, R-Hazen, chairman of the Legislative Audit and Fiscal Review Committee. Committee members will also want to be briefed on the scope of the investment board’s special audit.

“Then hope it is real deep and wide and hope we don’t have to do two audits,” Christmann said. “If it’s not, I’m guessing the committee will choose to” order its own audit.

The State Investment Board’s five-member committee, which still is working to define the scope of the audit, will send out a request for proposals from independent audit firms as early as this week, Dorwart said.

Dorwart and others, including Lt. Jack Dalrymple, who heads the State Investment Board, which oversees the investment office, have said Cochrane did an excellent job, and there are no signs of any irregularities in the funds he supervised.

Cochrane was found dead at his home north of Bismarck on April 10, a Saturday, the victim of what authorities concluded was a self-inflicted gunshot wound.

But investigators could find no motive – personal or professional – for the father of five to take his own life.

He left no note and gave no hint to family or friends that he was contemplating suicide, said Sgt. Steven Hall of the Burleigh County Sheriff’s Department.

The investigation by the sheriff’s office was narrow in its focus. “Our investigation centered on the means of death,” he said.

Hall added: “We weren’t able to identify any specific cause. In this case, there were no notes left or anything to give any insight. The reasons behind it are open to speculation.”

The means of Cochrane’s unexpected death, and the mystery from the lack of apparent motive, naturally fuel speculation, highlighting the need for a thorough audit, Dorwart said.

Dalrymple, who had met with Cochrane in a briefing about a teachers’ retirement fund two days before his death, does not believe Cochrane’s suicide was work-related.

The performance of state funds, which sank during the financial crisis in fall 2008, have since rebounded to a considerable degree, he said. He added that retirement fund balances are above national benchmarks.

“It’s really kind of a tough one,” Dalrymple said. “A lot of us saw Steve fairly close to his death. Everybody was just shocked because you couldn’t detect anything in his behavior.”

Readers can reach Forum reporter Patrick Springer at (701) 241-5522