BISMARCK – A bill recently passed the North Dakota State House that may limit the abilities of the auditor’s office to uncover areas of concern such as the recent findings at Williston Public Schools’ district 1.
State Auditor Josh Gallion recently responded on Facebook to the State House passing House Bill 1508 which prohibits the auditor’s office from charging fees to an institution of higher education under the control of the state board of higher education and prohibits the office from charging more than one thousandth of one percent of a political subdivision and operational or professional board’s total biennial operating budget. The bill also requires all audits to be reviewed by a certified public accountant.
The sponsor of the bill, Rep. Emily O’Brien, R-Dis. 42, Grand Forks, said in committee that she had received many concerns from individuals about the fees being charged by the auditor’s office, which she went through at the committee hearing, where Gallion also testified.
Emily Dalzell, communications director for the state auditor’s office, said the bill would prevent petition audits, such as the one conducted on Williston Schools’ district 1, where 21 areas of concern were found.
“Our goal is to serve the taxpayers,” said Dalzell. “We want to make sure that we are providing truthful and objective audit reports that help to share with citizens to show where their money is going.”
Dalzell said if the bill passes, a third of the auditor’s office would be cut out and not receive any funding.
“It means we can’t do any local government audits, including petition audits,” said Dalzell. “So those 21 findings from Williston, suddenly that’s gone.”
Dalzell added that North Dakota taxpayers would be subsidizing the federal government.
“We receive funding from the federal government for three different audit areas,” said Dalzell. “If this bill passes, North Dakota citizens would be subsidizing the federal government $1.3 million biennially.”
Another part of the bill is that audits would need to be reviewed by an individual with a CPA, which Dalzell said nationally less than half of auditors have.
“We have all kinds of varieties in our office,” said Dalzell. “Having a CPA is just another credential. We have some exceptional auditors, and just because they don’t have their CPA doesn’t make them a bad auditor. It makes them stronger because of our diversity.”
Dalzell believes HB1508 is a target at the auditor’s office.
“It’s a bill to defund the auditor’s office,” said Dalzell. “It would cut off a third of our office. We already have a waiting list of 45 clients waiting to get an audit from our office because we’re significantly cheaper than the private sector. It’s $112 average per hour for our office to conduct an audit. For an audit from the private sector, the average is $157 per hour. We have over 600 years of auditor reports that are backed up that we need to get through. If this bill gets through, taxpayers are not going to know where their dollars are going because our office will not be able to operate.”
If the HB1508 passes, Dalzell said the auditor’s office could charge an average of $10 for a complete audit, and most likely make pennies per hour.
“We can’t pay our auditor’s pennies per hour,” said Dalzell.
Dalzell added why she thinks the House would pass this legislation.
“They’re trying to cut out what our office is doing,” said Dalzell. “If you’re working in the shadows, you want to stay in the shadows. If you have a watchdog who is coming after people who are doing corrupt deals, and putting them out, and saying hey you can’t steal taxpayer money, no one should be afraid of our office if you’re doing the right thing.”
For background on the Williston Schools’ audit, on February 1, the North Dakota State Auditor’s office found 21 total areas of concern on district 1 in the years 2020 and 2021, including $377 million in unsupported adjusted journal entries and no record of school board approval for nearly two million dollars in purchases. More information can be found in the state auditor’s news release, and a full story can be found here.