DeKALB — While lawmakers in Springfield struggle to agree upon a full budget for the third consecutive year and NIU employees are in danger of losing their jobs, a four-month $468,050.39 investigation conducted in 2014 provided only an oral report of recommendations for improved reliability of financial reporting and compliance with laws, regulations and policies.

This investigation into internal control seems to be referenced in a Dec. 22 Baker Report. Investigations concluded that in 2013 and 2014 there were “weaknesses in internal controls, some limited compliance violations, and lack of clarity of policies across multiple units,” according to the report.

The investigation was completed by the forensic audit firm Alvarez & Marsal, the same firm that former NIU Controller Keith Jackson’s lawsuit against NIU, the Board of Trustees, President Doug Baker and Nancy Suttenfield, former interim chief financial officer, alleges was hired to “dredge for evidence of wrongdoing” committed by Jackson and other individuals Baker and Suttenfield had targeted for termination.

The Dec. 22 report addressed “complaints regarding procurement practices, employment decisions, and contractual arrangements that occurred in 2013-2014” around the time Baker began his presidency at NIU.

In a Nov. 22, 2013, email obtained by the Northern Star with a subject line of “Special Internal Control Assessment Contractor,” Suttenfield told Baker and Jerry Blakemore, former vice president and general counsel that “time is of the essence” to get a review of internal controls started and that she wanted to have a “request for proposal” issued by Nov. 30, 2013.

A request for proposal “is the appropriate competitive selection process for purchasing goods or services when price is not the most important criteria to be considered for awarding a contract,” according to the University of Illinois System’s Office of Business and Financial Services webpage.

“If there is a way to start earlier, let’s explore it,”said Baker in response to Suttenfield’s Nov. 22, 2013, email.

In a Jan. 6, 2014, email to Baker obtained by the Northern Star, Suttenfield said Blakemore told her the state procurement officer would not give his consent to constitute NIU’s need for an emergency audit even after he explained NIU wanted to hire a specific expert. Therefore, the university would not be able to proceed without a request for proposal.

Without opening an opportunity for vendors to submit bids for the contract, Suttenfield was unable to process the agreement between NIU and the expert as a separate contract.

In the same email, Suttenfield continues to say that NIU would hire Alvarez & Marsal’s Marc Sherman, a managing editor specializing in financial fraud, white collar investigations and dispute damages, according to Alvarez & Marsal’s webpage, as a temporary employee.

On March 17, 2014, Suttenfield sent an email to Preston Pugh, a former employee of Pugh, Jones & Johnson, informing him that she and Sherman had negotiated a scope of work and pricing for a subcontract with Alvarez & Marsal and that Sherman would contact Pugh with the information to draft a subcontract that met Pugh, Jones & Johnson’s requirements, according to email correspondence obtained by the Northern Star.

Matt von Behren, executive director of the procurement policy board, said it is general practice for vendors to select their own subcontractors.

“It would be weird if the university was to say … ‘we want to choose who the subcontractor is’ because then it kind of looks they’re trying to go around some sort of bidding process possibly to steer money towards a particular vendor,” von Behren said.

The law firm of Pugh, Jones & Johnson was originally contracted on March 7, 2013, to represent NIU “in the federal and state investigation of the University and its Police Department announced March 6, 2013,” according to a contract received on May 1 through a Freedom of Information Act request submitted to NIU by the Northern Star.

Von Behren said Illinois Procurement Code requires all legal, financial and other professional and artistic service contracts over $50,000 to be bid on by vendors. Subcontracts over $50,000 are not required to be bid on. Vendors must notify the state who the subcontractor is, what they will be paid and submit a financial disclosure and a conflict of interest disclosure if the subcontract is valued over $50,000.

However, the scope of the subcontract must remain in the scope of the original vendor’s contract.

The FBI and Illinois State Police, among other departments, executed a search warrant that focused on the NIU Police Department on March 6, 2013, according to a May 20 Northern Star article.

Although details of the “federal and state investigation of the University and its Police Department” were never released, the FBI’s search warrant, obtained by the Northern Star through a FOIA request, said the FBI was looking for “correspondence, memoranda, notes, records relating to criminal history or background checks of residents and prospective tenants of Eden’s Gardens….” Eden’s Gardens is a low-income housing area in DeKalb developed by Eddie Williams, former chief of operations and executive vice president of Finance and Facilities, according to a March 8, 2013, Northern Star article.

In a Feb. 19, 2015, email obtained by the Northern Star, Suttenfield told Danielle Schultz, director of Internal Audit, that Sherman provided oral recommendations for Alvarez & Marsal’s findings. These recommendations addressed “weaknesses” in the Procurement Department and “critical finance/business areas,” according to the email.

Over a course of four months from April 2014 to July 2014, Alvarez & Marsal billed NIU for $468,050.39 worth of work, according to invoices obtained through a May 1 FOIA request submitted to NIU by the Northern Star.

In Suttenfield’s Feb. 19, 2015, email to Schultz, she said Sherman and his team did not provide a written report for Alvarez & Marsal’s findings; Sherman only provided an oral report to Suttenfield to “keep the cost of the work as low as possible.” However, from July 1, 2014, to July 30, 2014, the accounting firm billed NIU for over 47 hours’ worth of “report drafting” and “report building,” according to an Aug. 19, 2014, invoice obtained through a May 1 FOIA request submitted to NIU by the Northern Star.

There has been concern with Baker’s performance as president since he began at NIU in fall of 2013. This year Baker and the Board of Trustees agreed it is an appropriate time to open the Board’s annual review to faculty, staff and students, according to an April 17 Baker Report.

NIU entered into a $30,000 contract with the firm Greenwood/Asher & Associates, Inc., according to a contract received April 21 through a FOIA request submitted to NIU by the Northern Star. The consulting firm will “facilitate face-to-face interviews with approximately 100 members of the university community” to evaluate Baker, according to the report.

NIU officials have established a plan to account for a $35 million budgetary gap for Fiscal Year 2018 that may result from the Illinois budget impasse. State lawmakers have been unable to agree upon a budget for three consecutive years. A portion of university employees will be losing their jobs because of spending reductions, according to a May 1 Northern Star article.

Editor’s note: Multiple attempts to contact Suttenfield, Blakemore and Pugh went unanswered. Sherman and NIU spokespeople were not immediately available for comment.