Lawmakers press Gallion on commerce audit

North Dakota state Auditor Josh Gallion appeared before the Legislative Audit and Fiscal Review Committee.

BISMARCK — A state lawmaker and a department head questioned North Dakota state Auditor Josh Gallion’s methods during an audit of the state Department of Commerce on Wednesday, Nov. 6, at a meeting of the Legislative Audit and Fiscal Review Committee. Gallion said they are getting ahead of themselves.

Rep. Mike Nathe (R-Bismarck) and Commerce Director Michelle Kommer said the audit put department employees in a challenging, unfair position by prompting a formal investigation.

Gallion began by presenting the audit, which asserts the department charged more than $850,000 to the wrong two-year budget cycle and improperly classified workers on the state’s re-branding effort and new “Be Legendary” logo as independent contractors instead of temporary employees.

As required by state law, the possible violations became the subject of an investigation by Attorney General Wayne Stenehjem, however Stenehjem asked a third-party investigator from the South Dakota Bureau of Criminal Investigation to take on the task. No charges against employees of the department have been filed.

Kommer said the audit’s findings and ensuing investigation have put undue stress on her and other employees of the department. She said the department made “an honest mistake” in charging funds to the wrong biennium but that it should not rise to the level of criminality. She became emotional, saying that it was difficult to work under the cloud of an investigation.

Kommer said she has hired a personal lawyer in case charges are filed, but other department employees would have to hire lawyers to defend themselves.

The most contentious back-and-forth came when Nathe said Gallion acted outside of his role and made the determination that the possible violation was a criminal act. Gallion said his office does not levy criminal accusations and it was his legal obligation to refer any possible violations to the attorney general.

At issue are payments made as grant reimbursements to Grand Forks County for construction work done by Grand Sky, an unmanned aerial systems park. More than $850,000 in payments, which were approved by the Legislature in 2017, were supposed to be made before the end of June in 2019, but poor weather caused a delay in construction. The payments were made after the end of the budget cycle, but the department still counted them toward the previous cycle.

Kommer, who had not yet joined the department, said the error may have occurred due to staff turnover but ruled out any intentional manipulation by department staff.

Contact Jeremy Turley at jturley@forumcomm.com or on Twitter at @jeremyjturley

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