State Auditor Joshua Gallion’s audit last month of the North Dakota Department of Commerce reveals disturbing actions by officials. It appears that someone or some people who were aware of state law came up with a strategy to specifically skirt the law.
This doesn’t seem like a mistake, accident or misunderstanding of state law, but a deliberate attempt to bypass transparency.
Gallion’s regular audit of the department found that two temporary employment contracts, which amounted to about $87,160, should have been treated as one contract. This would have required soliciting informal bids or proposals through state procurement requirements.
The contracts were related to the development of the “Be Legendary” logo, a brand to promote tourism. Commerce argues the contracts were properly coordinated. The initial contract was for $9,500, just below the $10,000 threshold for requiring bids. Commerce said the initial contract was followed by work “connected to the brand refresh but was separate” from the original contract’s outline.
Gallion said in his audit report that “circumventing procurement laws ... does not promote transparency and accountability but instead undermines the public’s trust in its government institutions.”
The Tribune editorial board agrees with Gallion’s comments. To compound matters, a Minnesota marketing consultant with ties to Gov. Doug Burgum’s Great Plains Software, which he sold to Microsoft in 2001, was hired to design the logo. The governor’s office said Burgum had no involvement in who was hired.
The new logo was greeted with widespread derision, and Rep. Marvin Nelson, D-Rolla, introduced a bill in the Legislature to replace the logo through a contest with prize money. The Senate killed the bill, citing the time and cost of replacing the logo and materials developed to go along with the campaign.
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Gallion told Attorney General Wayne Stenehjem last month about the audit results, and last week Stenehjem asked the South Dakota Division of Criminal Investigation to review the matter. Gallion’s notification to Stenehjem related to the Commerce Department charging more than $850,000 to the wrong two-year budget cycle. It’s unclear whether the logo issue will be part of the investigation.
Commerce Commissioner Michelle Kommer calls the appropriations issue an honest mistake. She said the “money went to the right party for the right work that was contracted legally.” Kommer also retained an attorney. The attorney general’s office is prohibited from representing people facing criminal allegations.
Some lawmakers at the Legislature’s Audit and Fiscal Review Committee on Wednesday were unhappy with Gallion for forwarding the audit to Stenehjem before meeting with the committee.
This is part of an ongoing dispute between Gallion and the Legislature over who has authority over audits. Burgum has sided with the Legislature and Stenehjem has issued an opinion supporting Gallion. Gallion has been following the opinion.
The investigation likely will make matters messier. The investigation of state officials upsets some legislators, and the divide between them, Gallion and Stenehjem may grow.
The Tribune believes the audits conducted by Gallion’s office reveal many state departments and agencies have become too lax in how they conduct business. There are good reasons for the laws and rules in place.
The logo situation was a case in which officials or state employees were looking for a way to go around the law. We believe it was a foolish effort to cut corners to make life easier for themselves. There’s no indication they were out for personal gain, just a quick way to get a job done.
The investigation by South Dakota needs to play out, and Burleigh County State’s Attorney Julie Lawyer will review the findings and decide if any charges are merited.
The Legislature and state offices need to take the audits seriously and use them to get the state’s business in order.