February 27, 2006


Re: Northern Rockies Space Privatization Center Audit


Dear Commissioner Stearns:


I have reviewed your request for expanded scope testing of the controls environment and related Regent's approval and policy compliance as specifically related to the University of Montana Northern Rockies Center for Space Privatization. In addition, you have requested that we test compliance with the terms and provisions of the grant and the related federal requirements.  I have also talked with Chairman Mercer about the request.


We are currently conducting a Performance Audit of the R & D controls and activities at both the University of Montana and Montana State University. Your request is timely. I will expand our audit work as you and Chairman Mercer have requested.  Based upon issues disclosed by the University of North Texas, and in accordance with the Government Auditing Standards, I am also required to expand our testing to include other activities of the former VP for research at UM.


This Performance Audit was approved by the Legislative Audit Committee after the 2005 Legislative Session. The Legislative Audit Committee is meeting next Monday, March 6th, at which time I will discuss the expanded scope testing request.

I also discussed with Chairman Mercer the need for a separate "investigation panel" of university officials.  I suggested that such a panel may be useful in discussing policy and implementing any potential recommendations.  I anticipate that our final report will be presented to the Legislative Audit Committee during a June, 2006, meeting. After that meeting, I would be happy to provide your office and any panel with a detailed explanation of our findings and recommendations.


In the meantime, please feel free to let me know if any additional audit testing is needed.





Scott A Seacat
Montana Legislative Auditor