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Ryan Johnson, Published May 06 2013

UND error jeopardized grant shared with NDSU research park

FARGO – North Dakota State University officials considered filing a formal complaint last fall against the University of North Dakota – or asking Gov. Jack Dalrymple to quietly intervene – when a UND employee’s mistake jeopardized a federal grant shared by entrepreneurial offshoots of the two universities.

Emails obtained by The Forum through an open records request show NDSU leaders had serious concerns about UND’s error, which affected a three-year Economic Development Administration grant shared by NDSU’s Research and Technology Park and UND’s Center for Innovation with UND in charge of filing paperwork.

Officials from both universities now say the issue was resolved without permanent damage.

Interim Executive Director Brenda Wyland emailed research park and NDSU officials Nov. 13 outlining the problem after UND missed a second deadline to file late financial reports. She wrote that an EDA official told her it was a “rather unfortunate situation” because it was UND’s fault, but the park also was being penalized because the two were co-applicants.

NDSU President Dean Bresciani asked if they could file a complaint with Chancellor Hamid Shirvani, and research park board President Barry Martin wrote that if UND’s mistake would prevent NDSU or the state’s other higher education institutions from competing for future EDA grants, “shame on them.”

Martin asked if there was a formal process to bring the problem to the chancellor or Gov. Dalrymple’s office. Bresciani replied, recommending NDSU leaders “not be the ones to deliver the message – that would just complicate the matter further,” and suggested Wyland handle it.

“UND is taking everyone down with them and in a very serious and inexcusable manner,” Bresciani wrote.

When contacted, Wyland told The Forum the issue was promptly resolved with the help of North Dakota Commerce Commissioner Al Anderson and a meeting with UND officials to create a plan as required by the EDA on how they would meet future deadlines.

“Everyone did what they needed to step up and fix the issue,” she said. “Had that not happened, there would really probably be some issues. The Economic Development Administration would not be happy with us. But that wasn’t the case.”

Innovation center Director Bruce Gjovig said Thursday that the grant is the third of its kind to be shared by the two in the past eight years, and the first to have a problem. The issue was found in September and fixed by November.

“In eight years, it’s a one-time thing,” he said.

Wyland said the grant for advancing the efforts of the two organizations totaled $300,000 each year for three years, with an annual EDA award of $100,000 and state match of $200,000 from the Department of Commerce. The two split the money, with UND getting an extra $20,000 each year to handle the paperwork.

David Schmidt, UND’s assistant vice president for research and economic development, said Friday that the requirements switched from quarterly to monthly reports after the first year. An “oversight” meant this was missed, and the quarterly reports continued until the EDA contacted the grantees.

“We put together a corrective action plan, EDA agreed with it, and we’ve kind of moved forward from there,” Schmidt said.

Schmidt said that included “reshuffling” his office’s workload and taking the employee off the grant. It came down to a “reporting issue,” not a question of the work or how the money was spent, Schmidt said.

“I can tell you in my tenure here we have not had anything like this happen before, so we addressed it very quickly to make sure that we were back in compliance,” he said.

Schmidt said UND continues to work “very closely” with NDSU, a sentiment echoed by NDSU President Bresciani.

“The working relationship between the two research universities continues to be strong and positive, and we continue to look for more opportunities to collaborate,” Bresciani said Friday in a written statement.

Wyland said the grant will soon run out. Research park officials are now determining if they’ll again apply with UND for another round of EDA funding or compete on their own before the June 17 deadline.

“We need to make sure that we’re putting forth a good application, and if it makes sense for us to partner and do that together, that’s great,” she said. “If it doesn’t, then we’ll have to look at what that means individually.”

Readers can reach Forum reporter Ryan Johnson at (701) 241-5587