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(701) 202-6956

November 16, 2014

Murray Sagsveen
600 East Boulevard Ave, Dept. 215
Bismarck, ND 58505-0230
Mr. Sagsveen:
In response to your November 10, 2014 memorandum titled Notice of Intent to
Dismiss for Cause, consider this my request for a pre-termination review. In response
to the reasons for termination enumerated in the letter, I offer the following:
1. Failure to perform your duties as a Chief Compliance Officer.
You indicate Chancellor Skogen assigned [Kirsten Franzen] as the Chief
Compliance Officer more than one year ago. This is incorrect. I was hired as the Chief
Compliance Officer (CCO) in November 2012, prior to Chancellor Skogens
You indicate [w]hen [Skogen] hired [Sagsveen] in November 2013, [Sagsveens]
responsibilities included supervision of you and the compliance program. I am not in a
position to verify Chancellor Skogens directives to you or the circumstances of your
You indicate that I have made no visible progress to establish a functioning
compliance program. This is incorrect. I have had numerous conversations with the
Board, the Boards Audit Committee, and you regarding my work on the compliance
program. I have repeatedly recommended numerous policy changes to you that, to my
knowledge, have not been acted upon.
After the failure of NDUS management to adopt or substantively respond to my
recommendations, the Audit Committee began working directly with me and provided its
support and approval for compliance program development. You should be well aware
of my efforts before the Board and the Audit Committee because you have been in
attendance on several occasions when I have addressed those bodies.
I have requested permission from you to perform investigations into issues that
have arisen through open records requests, media interest, or through the Fraud,
Waste, and Abuse Hotline. Many of those requests have been denied, have been

reassigned, or have been handled by you or the Chancellor without a formal

investigation. Despite this lack of support for compliance program investigations, I
successfully performed investigations into complex issues involving Title IX, workplace
morale, and the February 2014 data breach. The results of these investigations have
been documented and provided to you, to other members of the legal staff, and to
senior staff.
I have had many conversations with you in which I explained my methodology
regarding the compliance program. You have not given me any specific directives to
change my methodology.
I have frequently asked you to provide specific items that you would like to see in
the compliance program. You have failed to provide specific direction or to identify
additional areas you would like the compliance program to address.
I have sent you several articles from compliance organizations, such as the
Higher Education Compliance Alliance and the Society of Corporate Compliance and
Ethics, which explain best practices of compliance programs. My methodology is
consistent with these best practices. You have not responded to these emails.
You indicate Chancellor Skogen shares your opinion regarding my work on the
compliance program. I have minimal contact with Chancellor Skogen and I am not in a
position to verify his thoughts on my work.
2. Failure to set up fraud awareness training.
You indicate I failed to set up fraud awareness training. This is false. I have
reviewed the curriculum.
I discussed the training video and opportunities for
improvement of the program with you. I directed Core Technology Services (CTS)
personnel to execute the training after the inside.ndus rollout, another project that was
fairly labor-intensive. As part of that direction, I told CTS personnel to notify me when
the fraud training had been successfully assigned to each employee and asked that
CTS contact me if any further direction was needed. I have not yet received that
notification. Additionally, according to your letter, the deadline you selected for
completion of this project is December 31, which is a month and a half from now.
Prior to execution of my plan, I specifically discussed the timeline with you. You
did not direct me to alter my timeline.
3. Failure to establish trust with your clients.
You indicate I have failed to establish trust with my clients. I am unsure why the
word clients appears in quotes. If you intend those quotes to convey particular
significance, the meaning is lost on me.

You also refer to trust being important to the attorney/client relationship.

Presumably, this suggests that you believe you and the Chancellor have an
attorney/client relationship with me. As I have discussed with you before, the role of
CCO is very different from that of an attorney. Importantly, the ethical responsibilities of
a CCO are very different from the North Dakota Rules of Professional Conduct for
attorneys. Where an attorneys first responsibility is to her client, the CCOs primary
obligation is to the public good. I provided you a copy of the Society of Corporate
Compliance and Ethics Code of Professional Ethics for Compliance and Ethics
Professionals so you would better understand the professional obligations that I am
bound by because of my certification.
While I have served as an attorney on specific projects during my time at NDUS,
I have clearly indicated when I was serving as an attorney and when I was not. I also
was very careful not to perform compliance work on projects where I had served as an
attorney and vice versa. I have discussed the distinction between these roles with you
numerous times. Moreover, to the extent I acted as an attorney, my client was the
NDUS or the institution I represented, not any specific individual within the organization.
You indicate that neither the Chancellor nor you trust me. You have said this to
me before, and when I asked for details as to why you do not trust me, you indicated
that you and the Chancellor believe that I was involved with Rob Ports open meetings
complaint regarding the July 31, 2014 closed session held by the Board. You
acknowledge you are unable to prove this allegation. I have told you repeatedly that I
was not involved in Rob Port making a complaint. Moreover, I should not be retaliated
against for imagined conduct that you are unable to substantiate.
You indicate that at least one president has advised that he did not want [me] on
his campus during a visit by the Department of Education Office of Civil Rights
personnel. You have mentioned this issue previously and indicated that you were
referring to President Steve Shirley. I asked you for more information as to why
President Shirley felt this way. You acknowledged that the conversation you had with
Dr. Shirley was brief and that you did not know any details regarding his alleged
hesitation to work with me. I asked you to follow up with him so that I could understand
Dr. Shirleys concerns. You agreed to do so. Despite this promise and the fact that I
have asked at least twice, you have not followed up with Dr. Shirley to my knowledge. I
cannot address concerns when you fail to provide me with relevant details.
This is not the only time that you have told me that the presidents do not want to
work with me but have failed to provide me with details of the circumstances or even
identities of the alleged complainants. As I have mentioned to you previously, since you
were hired, I have not been included in cabinet meetings or senior staff meetings, and
Ive rarely been included in Board meetings. The Chancellor relocated my office from

the Capitol to the Horizon building on the Bismarck State College campus. Though you
did not notify me, I was recently removed from the Roles and Responsibilities Task
Force; I was told of my removal by a member of the administrative staff only after I
asked whether I would be included. These developments have minimized my contact
with institution presidents and other senior officials. I should not be penalized for
strained relationships with colleagues when you and the Chancellor have made
decisions that almost completely cut off my institutional contacts.
Lastly, while I strive to have good working relationships with colleagues, my job
as CCO is to ensure that the NDUS and its agents are compliant with law and SBHE
policy. Sometimes that requires bringing conduct to light that may be embarrassing or
inconvenient. To the extent that this lack of trust is based on my obligation to perform
my duties as CCO, it is inappropriate to penalize me for doing my job.
4. Unprofessional conduct.
You indicate I engaged in unprofessional conduct because you claim I told Linda
Donlin that I would not accept a reassignment, that I wanted to report directly to the
SBHE, and that I would like a severance package in exchange for resignation. I do not
recall the conversation you reference verbatim and certainly cannot verify what was
reported to you.
As you acknowledge, you and I have never discussed reassignment. Dr. Feldner
informed me that you were considering reassigning me. I am not interested in a
reassignment and likely stated as much.
I have stated many times that it is consistent with best practices that the CCO
report directly to the governing board. I have told the Board this in open meetings.
Your comment that I stated I would like a severance package in exchange for a
resignation is likely related to my comments that I refused to be intimidated into
resigning and my determination that there was no ethical, personal, or professional
advantage to be gained by resigning despite significant pressure.
You do not indicate why you deem these statements unprofessional. None of my
comments revealed any confidential information. Moreover, I was never informed that
my ability to discuss work matters with my friends and colleagues was limited beyond
legally confidential information.
5. Misinforming the audit committee.
You indicate that on August 21, 2014, I provided misleading and inappropriate
statements to the Audit Committee. You do not indicate what these statements were or
why you believe these statements were misleading or inappropriate. I am therefore not

able to substantively reply to this allegation. That said, my comments on August 21,
2014, were truthful, were at the invitation of the Audit Committee, and were in response
to questions asked by committee members. You have not addressed this matter with
me until now, despite the several meetings we have had in the interim.
6. Refusal to accept that you do not directly report to the SBHE or the Audit
You indicate I refuse to accept that I do not directly report to the SBHE or the
Audit Committee. You state [t]he Chancellor has established an organizational
structure in which you report to the Director of Legal Services. According to the
organizational flowchart available on the NDUS People Search website, the Director of
Legal Services is Cynthia Goulet. My understanding is that I report to you, the Chief of
Staff/NDUS Ethics Officer. At any rate, I have been explicitly asked by Board members
at public Board and committee meetings about the possible conflicts inherent in my
reporting structure. I gave honest answers supported by citations to national
compliance organizations. Having a direct reporting relationship to the Board allows the
CCO to honestly address compliance issues without fear of retaliation, reprisal, and
threats of termination or other discipline. When the CCO reports to individuals deeper
within the organization, there is a risk that those individuals will use their authority to
intimidate the CCO and to chill the effectiveness of the compliance program.
7. Refusal to implement a preventive concept for the compliance program.
You indicate I did not implement a preventive concept for the compliance
program. This is incorrect. I made several policy and procedure recommendations to
you over the past year that, if implemented, would help employees comply with laws
and regulations.
You and the Chancellor have failed to implement these
recommendations. I agree that training is an important part of a compliance program.
However, training cannot be effective when appropriate policies have not been
implemented. Training employees on bad policy does not help them comply with law or
regulations. I have discussed my methodology for implementing a compliance program
with you many times, and I emphasized the importance of having good policy in place
before a focus is placed on training. I have focused my efforts on the policy component
consistent with guidance on best practices from national compliance organizations. You
have not given me specific direction to proceed differently. You indicate that I have
stated to you and others that you do not understand compliance. You provide no
context for this statement, and as such, I am unable to substantively address it.
In summary, the allegations that you have made against me are false,
unsubstantiated, or irrelevant to my job performance. The action taken against me
suggests that NDUS leadership is unwilling to be held accountable to legally and
ethically appropriate standards. This is truly unfortunate. I believe that a healthy

compliance program is essential to our mission of serving students. I am also aware

that the University System is supported by taxpayer dollars - we have a legal and ethical
obligation to ensure that these dollars are well-spent, that our activities are compliant
with law and policy, and that we behave in an ethically appropriate fashion.
Please confirm receipt of this letter. This letter is not intended to foreclose or
limit any future arguments or claims. Please let me know immediately if you believe this
letter is insufficient to preserve my rights to a pre-termination review, an eventual
hearing, or any other remedies I am entitled to pursue.

Kirsten R. Franzen

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