BISMARCK — North Dakota’s state auditor would have to report regularly to state lawmakers about his billing practices and communication with audited entities under a bill the state Senate passed Monday, April 10.
The bill marks the latest scrap between lawmakers and State Auditor Josh Gallion, who have sparred this session over the audit fees his office charges to local governments. One city auditor said the fees can strain small communities. Lawmakers also have decried how Gallion publicizes audit findings.
House Bill 1508 by Rep. Emily O’Brien, R-Grand Forks, passed in a 35-10 Senate vote and goes back to the state House of Representatives for concurrence with amendments.
O’Brien said she brought the bill to cap audit fees after she probed concerns of increases and discrepancies in various costs. Gallion has disputed that his office’s billing “is getting out of hand.”
The bill initially sought to cap audit fees for local governments at one-one-thousandth of a percent of their annual operating budget and sought retroactive reimbursement from the state auditor for audit fees charged to North Dakota colleges and universities since July 2021.
Those components “will be discussed in appropriate budgets coming further,” Rep. Mike Brandenburg, R-Edgeley, told the House in February.
The Senate removed a provision of the bill requiring audits performed by the state auditor to be reviewed and approved by a certified public accountant.
The bill also requires the state auditor to report quarterly to the Legislature’s audit review committee about his communication processes with audited entities, billing practices, information on completed audits and audit schedule.
Gallion told The Bismarck Tribune the proposed reporting requirements seem to be “a reasonable solution.” His office already provides reports of state agencies’ audits to the panel.
The bill also adds an optional 2023-24 interim legislative study for lawmakers to look into the process for validating signatures submitted on local and statewide petitions, and options to improve the validation process, including voter registration. Potential findings and recommendations would go to the 2025 Legislature.
Sen. Kristin Roers, R-Fargo, said the auditor’s office “does not have a source to compare signatures to with their petition audits, and neither do many other departments, so we thought this might be a good area to study.”
Gallion said his office “would look forward to participating in” the proposed study. Not all agencies have the same resources as the secretary of state to review petition signatures, he said. His office receives citizen petitions requesting audits.
Gallion’s office has “developed some internal procedures based on a lot of what the secretary of state’s office does,” and has worked with the secretary’s office to “incorporate some of those procedures, but we don’t have access to the same databases and lists and information that they have” to review petitions, he said.
“If there’s a better way to do it, that’s where we are interested in assisting and learning, ourselves,” Gallion said.
O’Brien said the Senate amendments water down the intent of her bill, which she expects to go to a House-Senate conference committee to reconcile differences.
She said she proposed Senate amendments to mirror industry practices, which she didn’t consider “overreaching.”
The proposed 2023-25 budget for Gallion’s office includes $24,358 for refunding local governments “whose audit fees exceeded 1 percent of their revenues.”
Sen. Robert Erbele, R-Lehr, said that money is for about five entities, including the Gwinner Rural Fire Protection District and Killdeer Area Ambulance.
Audits of the two organizations have been at the center of House Bill 1508’s discussion this session.