Three months after naming an acting chief compliance officer, Michigan State University Interim President John Engler is scuttling the plan for a new structure the university says will strengthen its efforts to change its culture.

A new compliance office was formed in the aftermath of the scandal involving former MSU doctor Larry Nassar, accused of molesting more than 200 female students and athletes, and former MSU dean William Strampel, who is facing four criminal charges. The office was initially charged with ensuring that MSU was in compliance with its ethical obligations under federal Title IX rules and to help the university break down silos that caused red flags about Nassar to be swept under the rug. But its mission was then broadened to cover the entire university, including establishing an ethics code.

Under the new structure, the university will combine the compliance office and its internal audit office into one department. Current acting Chief Compliance Officer Nick Wittner will step down, working as a senior adviser to the department.

No other Big Ten school combines the two offices directly, a survey of the schools by the Free Press found. The schools also sink a considerable amount of money into their compliance offices,largely to pay for staff.

Multiple sources inside Engler's administration told the Free Press that Wittner originally resigned citing a lack of resources to implement the office. Wittner denied resigning in an interview with the Free Press, but said in a subsequent interview he had pressed for additional resources to come to the office.

Board members were briefed by Engler about the move during a closed-door meeting Thursday afternoon. Board member Brian Mosallam, who had argued for the creation of the office, was the only board member to raise strong concerns about the move.

Mosallam repeated those concerns in an interview with the Free Press on Friday.

"I do not believe that the current administration is committed to compliance and ethics," Mosallam said. "The current administration is making changes, some of which I support, but none of which are sustainable without a strong, independent CCO whose stand-alone office is adequately resourced."

Other board members did not respond to a request for comment or a list of three questions about the move emailed to them.

The original plan

In early summer, Engler announced he was hiring a chief compliance officer to run a newly formed Office of Enterprise Risk Management, Ethics and Compliance.

The office came as a reaction to the Nassar and Strampel scandals, where multiple people knew about complaints regarding sexually inappropriate behavior, but never took action or briefed board members.

Strampel was Nassar's boss, the former dean of MSU's College of Osteopathic Medicine. Among the four charges he is facing: using his position to "harass, discriminate, demean, sexually proposition, and sexually assault female students," according to court documents.

At the time an acting compliance officer was named, Engler called the position a person to check up on those doing the checking across campus. Wittner said at the time he wasn't likely to hold the job permanently, but no mention was made of him returning to the classroom this school year.

Wittner told the Free Press that when he was hired the office was part of an effort to "have consistency" across the campus and to get rid of "silos" that could allow issues to be swept under the rug.

He told the Free Press recently he had spent the past three months involved in a number of meetings and discussions of ongoing issues. He said he and Marilyn Tarrant, the executive director of the university's internal audit office, have also been vetting new positions Engler wants to create to investigate Title IX issues and a host of other initiatives to make sure they are actually executed.

Wittner said that he and Tarrant have been working through a 13-page document outlining all the changes MSU has been making since Engler took over.

Wittner, a law professor, said he has been impressed with the deans put in place and the plans that are underway. He said he is also impressed with the work of various departments across campus, including athletics.

Wittner has also used four law fellows — students in the law school — to help develop a university-wide code of ethics, something the school was lacking.

"We made more progress than I expected," Wittner said.

But there is much in dispute about why the office is being eliminated as a separate entity.

"We underestimated how much overlap with Marilyn's (internal audit) there was," said university spokeswoman Emily Guerrant said. That led to the idea to combine.

But multiple sources said Wittner was discouraged by a lack of resources coming from Engler to staff the office. That led to Wittner deciding to go back to the law school in January and to teach. But he is going to continue working on the code of ethics.

Wittner told the Free Press reports that he quit were "false" and his return to teaching was planned all along.

"I made it clear I was acting as interim," he said. He said he was on leave from teaching.

Mosallam said that's not what he had heard.

"I personally reached out to Nick a week ago when people in the administration confirmed for me a rumor I had heard that he had resigned," Mosallam told the Free Press on Friday afternoon. "I then learned from Nick that he was transitioning out because the administration was not supporting him with resources or appropriate personnel.

"To say that I was disappointed that Nick did not exercise his independence as CCO and bring his concerns to the board earlier is an understatement."

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Is new plan the correct plan?

Under the new structure, Tarrant will be in charge of the combined department and will have a compliance section and an audit section.

The new office will report to both Engler and the Board of Trustees.

That will allow MSU to have both offices work together closely, MSU officials said.

But no other Big Ten school combines the two offices, the Free Press found. Those schools also sink a considerable amount of money into their compliance offices.

For example:

Rutgers has 32 employees in its University Ethics and Compliance Office. That does not cover athletics compliance officers. Its annual budget is $5.5 million.

At Penn State, there are 12 full-time, two part-time and seven athletics compliance officers. There are also a number of compliance officers in various individual departments. Penn State does not publicly release budgets.

At Ohio State, there are 13 full-time employees in the Office of University Compliance and Integrity. It has an annual budget of $2.6 million

Experts say it's a best practice for the internal audit and compliance offices to be separate. That's because they each have different focuses, even if they are closely related.

The compliance office not only works to make sure all laws and regulations are followed, but they also monitor the culture of the organization, said Matt Kelly, who publishes the website Radical Compliance and is a former writer and editor at Compliance Week, a website covering compliance and ethics issues. That means compliance officers are worried about ethics and whether people feel comfortable reporting when something wrong is being done.

"Audit has traditionally been about counting up the money," Kelly said.

In contrast, compliance and ethics officers are often more involved in the creation of policies. Keeping compliance separate from audit and legal offices helps its staff call out the organization when there are issues, Kelly said.

"For example, there are times when actions are legal, but raise ethical issues and shouldn't be done," he said. "The more independent you can make the compliance office, the better it is for the organization."

Compliance is also about building, said David Jaffe, an attorney specializing in compliance and the former vice president, general counsel and secretary of Guardian Industries Corp. of Auburn Hills, who was also a partner in the law firm of Honigman Miller Schwartz and Cohn in Detroit.

"Audit is about finding stuff — checking accounting, looking for policy violations," he said. "Compliance focuses on building the culture, training, providing the leadership. When you combine these things, there is generally insufficient focus on the leadership function of compliance in terms of changing or building the culture."

But Wittner, who is working on national groups developing compliance standards and guidelines, said that's not true. He said best standards mandate institutions be flexible and structure according to what will work for them.

Mosallam isn't buying it.

"Combining the CCO with internal audit will undermine all of these (compliance functions) because it will be turned into little more than another audit function," he said. "We need a strong, independent CCO who will establish a sustainable culture of integrity on our campus and serve as a control on the practices and ethical decision-making of this university and its future administrations."

Contact David Jesse: 313-222-8851 or djesse@freepress.com. Follow him on Twitter: @reporterdavidj