Wardner: No special session over North Dakota auditor restrictions

BISMARCK — A North Dakota legislative leader said Monday, May 13, that lawmakers won't return to Bismarck for a special session to ease restrictions imposed on State Auditor Josh Gallion and will instead wait nearly two years before considering any changes.

Senate Majority Leader Rich Wardner, R-Dickinson, made the declaration during an hourlong meeting in Gallion's state Capitol office. He said House Majority Leader Chet Pollert, a Republican from Carrington who attended by phone, agreed with the decision.

But the leaders said the Legislative Audit and Fiscal Review Committee, which keeps tabs on the auditor's work, should meet more often because Gallion will need the panel's permission to pursue performance audits or contract for work required by the federal government. The language was added in the final days of the legislative session, which ended late last month.

Performance audits are known to hone in on specific issues within agencies and have alleged an array of bookkeeping mistakes, inappropriate uses of state resources and ethical concerns.

Wardner doubted lawmakers would impede Gallion's fact-finding efforts and urged cooperation between the Legislature, which is responsible for writing policy and agency budgets, and the auditor's office.

"The auditor and the Legislature are joined at the hip," he said. "Whether people believe it or not, we have to work together for the good of the people of this state."

Gallion and a number of lawmakers have said they were caught off-guard by the move to limit the auditor's power. Despite protests on the House floor, legislators easily passed the bill in a bipartisan fashion and Gov. Doug Burgum later signed it.

Wardner previously said the language should have been discussed in a committee hearing rather than being inserted during the fog of the last week of the legislative session. He said lawmakers would address it when they reconvene in 2021.

Voters, however, may have the opportunity to repeal the provisions at the ballot box before that happens because a referral measure is in the works.

Senate Minority Leader Joan Heckaman, a New Rockford Democrat who attended the meeting in person, said the restrictions were another example of legislative micromanagement and criticized the last-minute maneuvering.

"I would agree that that's not the way we should be doing legislation in the state," she said. "It's the wrong thing to do."

Gallion, a Republican first elected in 2016, said he's still waiting for an opinion he requested from Attorney General Wayne Stenehjem on how the new law will affect his agency's operations.

Meanwhile, a House budget-writer said he stayed out of discussions over the final bill due to family connections.

Fargo Republican Rep. Thomas Beadle's stepfather is Tony Grindberg, a former state lawmaker and current administrator at the North Dakota State College of Science who auditors said was directly involved in hiring a consulting firm that employed his wife, who is Beadle's biological mother. News of the audit results came in mid-April, just days before lawmakers finalized Gallion's budget bill.

Beadle said he made sure he wasn't on the conference committee that drafted the final version of the bill due to his proximity to the people involved in the audit. He voted for the bill when it came to the floor on the penultimate day of the session.

"I heard about the amendment after it had been drafted by the conference committee members," Beadle said. "We had issues before that."

Beadle and other lawmakers have said the move was related to budget talks and the need to improve communication with the auditor. But Republican Rep. Keith Kempenich, a member of the House Appropriations Committee, acknowledged it was at least partly intended to “slow the process up” for an auditor who has been more aggressive than his predecessor, arguing that performance audits aren't meant to "embarrass people."

Kempenich said Monday he wasn't aware of any political retribution that was involved with the auditor constraints. He said many lawmakers found out about the NDSCS audit through news reports.

"For myself, it highlighted that we need to know more about what's going on with the auditor," Kempenich said.

Calling Gallion the "new sheriff in town," Wardner said lawmakers were used to audit reports being posted more "quietly" until the Legislative Audit and Fiscal Review Committee met. The 14-member panel met just three times last year, but Wardner suggested they may now meet as much as once a month and could do so by phone.

Gallion said his office has worked to improve transparency and communication, including by issuing news releases about audit findings. He called North Dakota citizens his "primary stakeholder" and said he has no intention of changing his approach to the job.

"I've been accused of being aggressive or zealous in my job. I take my job very seriously," he said.

The North Dakota State Auditor’s Office has conducted almost 10 performance audits in the past five years on various state agencies. The pace has picked up under Republican Josh Gallion since he was first elected in 2016, though he said he’s taking a more “surgical” approach to the deep dives on agency operations and finances.

Here’s what the most recent examinations of state agencies have found:

December 2018: A performance audit found nearly $100 million in general funds was spent in one fiscal year when state agencies had special funds available. It also said some agencies and boards grew special fund reserves with little guidance from state law and policies on appropriate reserve levels.

June 2018: Auditors identified issues in the oversight structure of the state’s veterans affairs functions, including a struggle to recruit newer veterans to serve on the Administrative Committee on Veterans Affairs. It also highlighted “infighting” among stakeholders that included “numerous open records requests” and “retaliatory actions.” Committee leadership disputed the findings.

May 2018: An examination of the governor’s office travel identified “inappropriate” instances of state plane flights used for “commuting,” which occurred during the current administration of Gov. Doug Burgum and his predecessor Jack Dalrymple. Burgum defended the travel as a “prudent” use of taxpayer money.

March 2018: Auditors said the Department of Veterans Affairs should improve the administration of grant and loan programs and flagged the use of state resources to help a nonprofit organization without legislative authorization. The department agreed with the six recommendations in the report.

February 2018: A report on the state’s Veterans Home in Lisbon said leaders should measure and forecast demand to find the best use of the facility, noting that about one-third of the its basic care beds were empty. Auditors also suggested that the Veterans Home strengthen its monitoring activities to ensure policies are carried out. The department partly disagreed with the findings.

March 2016: An audit of the Department of Trust Lands issued 29 formal recommendations, 22 of which the department agreed with. Among the issues identified were royalty payments being allocated to the wrong trusts, a “lack of an organizational culture of accountability” and ethical concerns stemming from employees accepting free meals and drinks from investment firms managing state assets.

January 2016: A review found the Department of Trust Lands had “not fulfilled the mission” of the unclaimed property program. It noted that an inventory listing was not complete and identified issues with an online search function that excluded certain owners from being informed that their property was being held by the department. The department agreed with 13 of the 19 recommendations.

November 2015: Auditors said the Department of Trust Lands made oil impact grant recommendations that didn’t appear to meet legislative intent. Moreover, an annual legislative limit on grant awards was exceeded. The department agreed with eight of the 13 recommendations.

April 2014: The Game and Fish Department “had not properly inventoried and was unaware of the location” of more than 100 guns used in a volunteer hunter education program, auditors said. The report also said the department improperly reimbursed employees for meals and lodging and awarded contracts without bids. The agency’s head called the report a “shock” at the time and said they were working to be in compliance. The department agreed with all but one of the 44 formal recommendations.