A long-anticipated performance audit of the North Dakota State Auditor’s Office found no significant issues, consultants told a panel of lawmakers Thursday afternoon.

“Based on the work that we performed, there weren’t any red flags,” Chris Ricchiuto, representing consulting firm Forvis Mazars, said.

The review was commissioned by the 2023 Legislature following complaints from local governments about the cost of the agency’s services.

The firm found that the State Auditor’s Office is following industry standards and laws, and is completing audits in a reasonable amount of time, said Charles Johnson, a director with the firm’s risk advisory services.

“The answer about the audit up front is that we identified four areas where things are working exactly as you expect the state auditor to do,” Johnson told the committee.

The report also found that the agency has implemented some policies to address concerns raised during the 2023 session.

For example, the Auditor’s Office now provides cost estimates to clients before they hire the office for services, Johnson said. The proposals include not-to-exceed clauses, so clients have to agree to any proposed changes.

The State Auditor’s Office also now includes more details on its invoices, so clients have more comprehensive information about what they’re being charged for.

The audit originally was intended to focus on fiscal years 2020 through 2023. However, the firm extended the scope of its analysis to reflect policy changes that the Auditor’s Office implemented after the 2023 fiscal year ended.

State Auditor Josh Gallion told lawmakers the period the audit covers was an unusual time for his agency. The coronavirus pandemic made timely work more difficult for his staff. Moreover, because of the influx of pandemic-related assistance to local governments from the federal government, the State Auditor’s Office’s workload increased significantly.

Gallion said that, other than confirming that the changes the agency has made were worthwhile, he didn’t glean anything significant from the audit.

“The changes had already been implemented,” he said.

Gallion has previously called the audit redundant and unnecessary. When asked Thursday if he thought the audit was a worthwhile use of taxpayer money, Gallion said, “Every audit has value, at the end of the day.”

The report has not been finalized, though the Legislative Audit and Fiscal Review Committee voted to accept it.

Audit of state auditor delayed; Gallion calls it ‘redundant, unnecessary’

“There was no shenanigans, there were no red flags,” Sen. Jerry Klein, R-Fessenden, said at the close of the hearing.

Forvis representatives told lawmakers they plan to finish the report sometime this month.

The contract for the audit is for $285,000.

Johnson said as far as he is aware Forvis has sent bills for a little over $150,000 so far. That doesn’t include the last two months of the company’s work, he said.

The consulting firm sent out surveys to local governments that use the agency’s services.

The top five suggestions for improvements were:

• Communication with clients
• Timeliness
• Helping clients complete forms
• Asking for same information more than once
• Providing more detailed invoices

The top five things respondents thought the agency does well were:

• Understanding of the audit process
• Professionalism
• Willingness to improve
• Attention to detail
• Helpfulness

Johnson said that some of the survey findings should be taken with a “grain of salt.”

“In our work as auditors, we don’t always make people happy doing what we’re supposed to do,” he said.