North Dakota Lawmakers Eye Fund Dissolution
State Auditor Josh Gallion says a follow-up audit requires legislative action as two Development Fund leaders resign.
By Bianca Herrera ·
Nearly four million dollars in loans and grants at the North Dakota Development Fund lack complete paperwork, according to a recent performance review. The finding triggered a review by the State Auditor's office and prompted resignations from top fund leadership.
Jim Albrecht, chair of the Development Fund board, and Rob Lindberg, vice chair, submitted their resignation letters on Oct. 20. That date preceded the Ethics Commission's announcement of an inquiry into the fund. Neither letter cited the Ethics Commission in its text. Albrecht stated he was stepping down to support the Department of Commerce in taking the fund in a new direction. Lindberg offered his best wishes as the department and administration restructure economic development efforts.
State Auditor Josh Gallion said his office hired an independent firm to conduct the initial performance review. He noted that a follow-up performance audit would likely require action from the legislature. “If they want a follow-up performance audit, the legislature is likely going to have to put that into a bill and require that to happen,” Gallion said. The fund continues to receive annual financial statement audits performed by a private firm under a contract administered by the auditor’s office. These financial audits differ from performance audits, which examine how the fund operates.
The legislature’s audit review committee has recommended eliminating the fund. The committee proposed transferring its outstanding loans and investments to the Bank of North Dakota. Sen. Jeff Magrum, R-Hazelton, chairs the committee. He said he still supports dissolving the fund and believes lawmakers will have enough votes in the upcoming session. “I think at the very least, we will probably dissolve the North Dakota Development Fund this coming session. For sure, I think we have the support for that,” Magrum said. Eliminating the fund would require legislative approval.
The Ethics Commission will begin reviewing the audit and gathering information. The commission will decide whether to launch a formal investigation based on that review. Development Fund CEO Brian Opp confirmed both resignations. He declined to comment on the Ethics Commission’s probe. Fund officials previously said they have begun to strengthen disclosure and recordkeeping practices. They planned additional improvements to those practices.
The inquiry does not mean that an ethics violation occurred. The process allows the commission to gather facts before making a determination on next steps.
