Bill marks latest scrap between North Dakota lawmakers, state auditor

BISMARCK — Parshall Metropolis Auditor Kelly Woessner mentioned the state auditor’s workplace charged town a $26,750 invoice final yr for conducting a citizen-petitioned audit.

The state price “was similar to a shell-shocker,” she instructed the Tribune. “It was one thing that we simply felt that must be modified.”

State Auditor Josh Gallion and North Dakota lawmakers have clashed over proposed restrictions on audit charges charged to native governments, charges Woessner mentioned can pressure small communities. As a comparability, Parshall’s audit prices totaled $39,200 from 2016-20, when an unbiased agency audited town.

Rep. Emily O’Brien, R-Grand Forks, mentioned she introduced Home Invoice 1508 to cap audit charges after she probed issues of will increase and discrepancies in varied prices.

The Home handed the invoice earlier this month in a 54-40 vote, then handed an amended model, 58-36, on Tuesday. The invoice goes to the Senate.

Gallion mentioned he appears ahead to continued discussions across the invoice and native authorities audits, however referred to as 1508 “not the suitable method.” He helps a Senate invoice to deal with audit points for native governments, which he mentioned face a backlog of 600 years of audits.

The state auditor and lawmakers have sparred in recent times over how he has dealt with audit findings, comparable to publicizing audits earlier than lawmakers are conscious of findings, and notifying the lawyer basic of irregularities in a single occasion that sparked a monthslong prison investigation however resulted in no prices.

Gallion, the second-term Republican auditor, disputed that his workplace’s billing “is getting out of hand.” Native governments can select a personal agency “or us,” he added.

Auditor spokeswoman Emily Dalzell mentioned the workplace’s charge is “considerably decrease than the non-public sector,” being a $112 per hour common in comparison with a $157 per hour common to go to a personal agency.

The invoice would require audits carried out by the state auditor to be reviewed and permitted by a licensed public accountant, in response to Rep. Mike Brandenburg, R-Edgeley.

The invoice had sought to cap audit charges for native governments at one-one-thousandth of a % of their annual working price range, and sought retroactive reimbursement from the state auditor for audit charges charged to North Dakota faculties and universities since July 2021, amongst its modifications.

These elements “will likely be mentioned in applicable budgets coming additional,” Brandenburg instructed the Home on Tuesday.

Gallion final week mentioned the earlier model of 1508 would undercut his workplace and its skill to pay its native authorities audit crew.

He mentioned his workplace’s audit prices vary from $10,000 to $20,000, relying on measurement and scope. The workplace’s native authorities audit crew “operates like a small enterprise,” charging an hourly billing charge that covers these workers’ salaries and working prices, he mentioned.

“It isn’t like we’re billing exorbitant costs after which we now have some stockpile of money someplace,” he mentioned.

The workplace does have “minimal funds readily available” to assist get from one pay interval to the following if billings are late or if purchasers do not pay on time, he mentioned.

O’Brien mentioned state authorities has the test and steadiness of the Legislature to set honest charges for audit charges, and he or she questioned the place all the cash goes.

Gallion “ought to need to set the usual for transparency and never take it as offensive,” she mentioned.

Gallion mentioned he discovered the CPA requirement “considerably offensive” as a result of his workplace is “way more than numbers and simply financials” with a various background of disciplines, comparable to a medical auditor who’s a registered nurse.

“How is a CPA going to overview her work and add worth?” mentioned Gallion, who has bachelor’s levels in accounting and enterprise administration and a grasp’s diploma in enterprise administration, and is a army veteran.

O’Brien instructed the Home the CPA requirement aligns with the same one in state legislation for native governments utilizing a personal auditor.

“The workplace with the authority to do the audit must also meet that requirement,” she mentioned Tuesday.

Parshall isn’t paying the $26,750 invoice.

“We’ve been standing our floor on that,” mentioned Woessner, who referred to as audits “good for a neighborhood” however disputed there was something fallacious with town’s funds.

She mentioned state auditor personnel “spent a complete of six hours in my workplace at some point,” with e mail correspondence for “all the pieces else,” comparable to information.

Woessner mentioned payments such because the one charged to Parshall might “actually put a pressure on loads of smaller cities.”