November 16, 2010
Tuntland established that Grinsteinner is a certified public accountant currently working as a controller for a Wind Power company and she had 2 and 1/2 years experience working as an internal auditor before working at WSI. Grinsteinner reported to the CEO for administrative activities but reported to the internal audit chair at WSI's board with her actual audit reports. She said over time she reported to several different people.
She said typically internal auditors looked for problems with compliance but they can be consultants within an organization. She said that the position of internal auditor is very common within large organizations and that the role is to do independent risk analysis where an independent auditor will consult with the board or management but does not abdicate to them.
She said specifically at WSI she was tasked to follow recommendations made in two previous audit reports. When the first audit report exploded in the media, she wondered what she'd gotten into as she was a new employee and so she read through years of old reports. She said there was no limit to the areas she could look at. For example in human resources were proper protocols followed for hiring, were background checks being done. With regard to specific performance, were taxpayer dollars at risk. She said that the function of an internal auditor is to help management assess and mitigate their risks appropriately.
Attorney Tuntland handed her a copy of the internal audit charter revisions dated June 18, 2007. He stated that the document had been started before she was hired and that the former internal auditor had been frustrated that it took so long. The document noted "adherence to highest professional standards and code of ethics". She said that the code of ethics comes from the Institute of Internal Auditors and that there is a body of work of professional standards for internal auditors.
She said that the core expectation of her job was to get the audit recommendations addressed as the legislature was monitoring WSI. That meant that she followed up with the State Auditor's office to make sure they were in compliance. She said she typically would work with various people throughout WSI starting with executives at the highest level who then would send her to departments or certain staff for specific records.
Tuntland then asked about the search of Mark Armstrong's office. Grinsteinner said to put it into context that the State Auditor's report had issues as to how open records requests were being handled and that that spilled over into HR because of how personnel files were being handled.
Grinsteinner said information was being routed to all employees as media with links to the Dakota Beacon. She knew Armstrong was a friend of the Beacon's editor, Steve Cates, and she was concerned about the nature of articles which had negative comments about current and former WSI employees and the state auditor. She found this distasteful and questioned its appropriateness as she wondered why WSI was being pointed to a republican right wing newsletter.
Her internal auditor subordinate said that she had taken something into Armstrong's office and saw things on his desk that she questioned. It looked like information related to other research. She was not sure why Armstrong had that information as she had privately taken it to the audit chair. She then worried that the internal audit function was compromised and broken.
She later learned from HR that open records requests consisted of a box underneath Armstrong's desk which was haphazard and not well managed and there were other open records requests he kept in a desk drawer. She said she had to put these open records requests on the front burner as she was getting complaints from employees.
She testified that she and Peltz and Long were in her office when she remarked she needed to go in and search Armstrong's office.
She went back to Armstrong's office approximately 7:00 p.m. that evening, used her key card, and was aware of camera systems so that people would know she was in the office. The door was not locked and she did not turn the lights on but used a flashlight. She said the office looked like someone took a dumpster and turned it upside down on his desk.
She said she was looking for things she had been told were pertaining to the audit she was working on. She said specifically there were law books open to specific pages she had referenced in her notes to internal audit chair Evan Mandigo and that concerned her because this information was now being routed back through the communications director. She said since she had concerns about Armstrong and management, to take those concerns to the audit committee chair only to have the information fed back to the same management was not appropriate.
She said the specific code that she was concerned with had to do with false payroll reports being filed and that Armstrong would have no connection with payroll reports. She said she looked for the box of open records requests because of employees' complaints of mishandling of their personnel files, that it was very difficult to tell if he had a system of tracking his open records as paper was spilling out of boxes and his desk.
When she found Armstrong's journal, she thought it looked like a log of events and perhaps this was his log of what records he had sent to whom. On the surface it looked like a business record in a typical steno notebook.
She said that Long came into WSI later and startled her. She said that she handed the notebook to Long and she was still searching for more open records requests.
She thought that Long started reading the journal when he was in the copy room and found the passage regarding secret documents. She said that particular passage didn't concern her, what she read later concerned her more as she thought Armstrong was trying to get things out to the media on the sly. In particular, the discussion on Steve Cates concerned her as she wondered whether Cates was getting billed for the information. That came to the heart of the state auditor's recommendations about how records were getting charged differently according to the requestor.
Grinsteinner testified that Long asked if he could take a copy of the journal and she had no problem with that.
A few days later Long told her he wanted to turn the journal over to BCI's Mike Quinn.
She said that she did not enter Armstrong's office at Long's request, but she had received many complaints from Human Resources and other employees about these open records requests as well. She said that she learned later that a search warrant had been executed to search Armstrong's office. She knew that Long had been contemplating giving the journal to Quinn and advised him to consult with a private attorney first. Grinsteinner left for a business trip in Las Vegas and did not return to WSI office until the following Wednesday. She said she had a discussion with board member Mark Gjovig who was now her new boss. Mandigo was her boss on Friday when she left work, but Gjovig was her new boss when she returned.
She said she was interviewed by the legal department's Rob Forward about going into Armstrong's office. She said that she materially told him what had occurred, but did not reveal that she had searched with a flashlight. She said that she did not turn on the lights because she did not want people to know she was there. She said it was not her intent to disclose to the public that she went into Armstrong's office and that she needed to assess whether the audit function was broken. Either she had to figure out a way to present this to the board or she had to resign and leave the organization because it was too broken for her to work for. She said she felt terrible when she realized that the journal went public. She also said that she didn't worry about how the employees would react to her search because it is not unusual for internal auditors to look at things without the employees being aware of it.
She said she was fired in March of 2008 and that 5 WSI employees were terminated on the same day. She stated she had filed a request for whistleblower protection after she'd returned from Las Vegas.