North Dakota's Commerce Department improperly contracted work for the state's new logo last year, according to state Auditor Josh Gallion.
Gallion's regular, two-year audit of Commerce found that two temporary employment contracts, totaling about $87,160, should have been treated as one, which would have required soliciting informal bids or proposals through state procurement requirements.
Gallion said "circumventing procurement laws ... does not promote transparency and accountability but instead, undermines the public's trust in its government institutions."
Commerce maintained the contracts related to the logo were properly coordinated. The initial contract was for $9,500 -- just below the $10,000 threshold for requiring bids -- followed by work Commerce said was "connected to the brand refresh but was separate" from the original contract's outline.
"The Department will ensure there is a clear separation between contract deliverables and temporary employment arrangements in the future and that all procurement requirements are followed," Commerce said.
Auditor's spokeswoman Brianna Ludwig said the purchases have already been made, so there is no remedy.
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A Minnesota marketing consultant with ties to Gov. Doug Burgum's Great Plains Software, which he sold to Microsoft in 2001, designed the new "Be Legendary" logo. The 2019 Legislature considered a bill to replace the logo through a contest with prize money.
Its main sponsor, Rep. Marvin Nelson, D-Rolla, criticized how "Be Legendary" was developed -- below the public bid threshold and without any opportunities for North Dakota artists or graphic designers.
The Senate ultimately killed the bill, citing time and costs to revamp state agencies' business materials that already use the logo, as well as premature timing to do so after the new brand's rollout.
The spare-styled "Be Legendary" brand replaced the longtime "Legendary" logo's slanted, Western script, used since 2001, mainly for the state's Tourism Division.
"The Department of Commerce consulted with the North Dakota Office of Management and Budget to ensure the ‘Be Legendary’ logo creation and brand refresh contract did not violate state law when temporary employees were hired to complete an additional workflow, separate from the initial contract deliverables," said Kim Schmidt, Commerce communications manager.
Gallion also said Commerce "violated" its appropriation by the 2017 Legislature by charging $853,908 in county grant payments to the wrong two-year budget cycle, and was noncompliant in contract payments of $123,750 to unapproved subcontractors.
Commerce agreed to "strengthen internal controls" in allocating future expenditures, and said the noncompliant contract payments were verbally approved.
Reach Jack Dura at 701-250-8225 or email@example.com.