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After 2019 flaps, North Dakota House passes bill tweaking state audit practices
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After 2019 flaps, North Dakota House passes bill tweaking state audit practices

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House Majority Leader Chet Pollert, R-Carrington, left, speaks with Rep. Corey Mock, D-Grand Forks, during a floor session recess at the state Capitol in Bismarck on Wednesday.

North Dakota's House of Representatives has passed a bill meant to improve the working relationship between lawmakers and the state's top financial watchdog, after disputes in 2019.

House Bill 1453, brought by Republican majority leaders, now goes to the Senate after representatives passed it 93-1.

The bill originally sought to change state auditing standards and more closely involve the Legislature's audit review committee in the state auditor's work. State Auditor Josh Gallion said the change would result in more work for state agencies by making them create financial statements, which are formal records of the business activities and the financial performance of a department. 

Rep. Corey Mock, D-Grand Forks, said the amended bill no longer specifies financial statement audits but does require the Legislature's audit review committee to consult with the state auditor every two years on updates to audit standards and report guidelines.

He expects the bill would create "a much stronger relationship" between the committee and the state auditor.

"As far as the agency audits, we expect them to be done, conducted much like they are today," Mock told the Tribune.

The committee, which typically meets a few times a year, would have to meet quarterly. Mock said the bill "will engage the auditor and the committee a lot more." 

The bill also would give whistleblower protections to state employees submitting information of potential violations or misuse of funds to the state auditor, and would make that information confidential. Mock said the protections are similar to ones in place for other state government entities.

House Majority Leader Chet Pollert, R-Carrington, brought the bill after friction in 2019 between lawmakers and Gallion.

The 2019 Legislature passed a law requiring legislative approval before the state auditor launches performance audits, which are deep probes of financial issues. Attorney General Wayne Stenehjem issued an opinion that the law likely is unconstitutional. Gallion has ignored the law, citing the attorney general opinion.

The bill would undo that law and allow the state auditor to launch performance audits he determines necessary and "within the resources available."

"There is no approval or permission needed from (the Legislature's audit review committee)," Mock told the House.

The House on Wednesday also defeated two bills that sought to repeal the law, which Mock called no longer necessary given the first bill's changes.

Later in 2019, Gallion drew criticism for alerting the attorney general of audit findings of irregularities, which led to criminal investigations of several officials, including former Commerce Commissioner Michelle Kommer. No charges resulted, but Kommer and some lawmakers criticized how Gallion handled the audit findings. He has said he had an obligation to advance the findings for investigation. 

Kommer, former Commerce Senior Manager Holly Holt and three North Dakota State College of Science administrators, including President John Richman, retained attorneys and were denied state reimbursement for more than $48,000 in attorney fees. State Risk Management Division officials determined their claims weren't viable.

The Senate this month defeated a bill that sought to reimburse them, with one senator citing the bill's language as difficult to work with.

Pollert expects the reimbursement issue to resurface in House discussions. He has said the former commerce commissioner was "wronged" and "wasn't treated correctly."

Reach Jack Dura at 701-223-8482 or jack.dura@bismarcktribune.com.

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