North Carolina Office of the State Auditor
Central University, auditors became aware of a
tor notified the North Carolina Attorney General
connection between an information technology
and appropriate law enforcement agencies of ap-
employee at North Carolina State University and
parent instances of malfeasance, misfeasance, or
employees under investigation at North Carolina
nonfeasance by an officer or State employee. Au-
Central University. Allegedly, the North Carolina
ditors recommended University management take
State University employee allowed individuals ex-
strong disciplinary action against the employee,
ternal to the organization to access the University
determine the extent of potential security breach-
computer network to share music files. In addition,
es, offer training to employees, and work with
we received allegations that the employee was in-
law enforcement as appropriate. The University
volved in illegal downloading and distribution of
placed the employee on investigative leave and he
copyrighted materials.
subsequently terminated employment.
Forensic analysis of computers and interviews confirmed that the Operations and Systems Ana-
North Carolina General Assembly
lyst misused University networks by downloading
Investigators received a complaint through the
movies, music, games, software, pornography, and
State Auditor’s Hotline related to a potential con-
violent images. Some of these files were buried
flict of interest involving a North Carolina Sena-
deep within sub-folders indicating an apparent at-
tor and his involvement with the day-to-day op-
tempt to conceal the content from detection. The
erations of a stock car racing team owned by his
Operations and Systems Analyst used the Univer-
son and whose major sponsor at the time was Blue
sity servers because of the faster connection speed.
Cross Blue Shield of North Carolina (BCBSNC).
In addition, he admitted to distributing copyright-
A review of the allegations confirmed the relation-
ed materials to friends and business associates as
ship between the Senator’s son’s racing team and
well as using software to break encryption that
BCBSNC and revealed that another company the
protects copyrights.
Senator co-owns with his son has a direct financial
The investigation also revealed that the Opera-
relationship with the racing team. The racing team
tions and Systems Analyst intentionally deleted all
used property owned by a company co-owned by
information contained on his University-issued
the Senator as collateral to secure a $150,000 line
laptop to conceal inappropriate use. Further, he
of credit.
attempted to notify co-workers to delete suspi-
Because BCBSNC is a major sponsor of the rac-
cious activity. Intentional damage to a govern-
ing team and is a company that does business be-
ment computer and obstruction of an audit are
fore committees upon which the Senator presides
violations of State law.
(including one which he co-chairs), this situation
In addition, the Operations and Systems Ana-
is a potential conflict. Furthermore, the potential
lyst provided access to a University server to al-
conflict of interest was not properly disclosed on
low a friend to download music files. State law
the Statement of Economic Interest filed with the
prohibits the unauthorized granting of access to a
State Ethics Commission as required. Auditors
government computer.
recommended that the Senator include all busi-
In compliance with State law, the State Audi-
18
Increasing Efficiency... Exposing Fraud
ness and personal relationships that may create an