'Powers and duties' -- Legislature, state auditor clash over last-minute rule changes

In the last days of the recent legislative session, a curious line item was slipped into an appropriations bill, Senate Bill 2004. This item made a change to the rules governing the state auditor's office, specifically requiring that the auditor ...

State Auditor Josh Gallion presents his Governor's Travel and Use of State Resources report to members of the Legislative Audit and Fiscal Review Committee on Wednesday at the state Capitol in Bismarck. Bismarck Tribune photo
State Auditor Josh Gallion presents his Governor's Travel and Use of State Resources report to members of the Legislative Audit and Fiscal Review Committee at the state Capitol in Bismarck. File photo / Bismarck Tribune

In the last days of the recent legislative session, a curious line item was slipped into an appropriations bill, Senate Bill 2004. This item made a change to the rules governing the state auditor's office, specifically requiring that the auditor get permission from a legislative committee before starting any performance audits.

It passed unanimously through the Senate, cleared the House after some debate and was signed into law by the governor. The move has sparked outrage among some members of the public and has raised a question over whether the Legislature is free to limit the state auditor, who is elected by the public, in this particular way.

State Auditor Josh Gallion sees this as a misunderstanding on the Legislature's part concerning the powers and authorities governing the auditor.

"I've heard 'we need to rein in the auditor' and 'the goal isn't to embarrass people' and legislators say they don't want to read about this stuff on the front page of the paper," Gallion told the Press in a phone interview. "I want to re-emphasize that the state auditor's office works for the citizens of North Dakota. That's our primary stakeholder, and we aren't going to hold audits to wait for the Legislature to present them. I'm not going to treat legislators like a special class of citizen that are entitled to information before everyone else."

Though both the House and Senate passed the bill with this amendment, it was the Senate that passed it unanimously, and Senate Majority Leader Rich Wardner expressed frustration over the whole situation.


"I'm a little bit frustrated. I'm not sure why the individual who put that in there thought they had to put it in there, I'm frustrated because I didn't know about it and now I'm frustrated that people are trying to make it more than it is," Wardner said. "I would like to see Mr. Gallion cooperate with the Legislature a little bit, and we'll get it out next session."

The situation has inspired a number of government watchdog and activist groups in the state to band together under the moniker "Audit the Swamp." Dickinson resident Riley Kuntz chairs the group and spoke about his distaste for this decision, one of several that have sparked umbrage.

"The way I see it, in a nutshell, is they added this language on the Senate side of the bill," Kuntz said. "Everybody's claiming that they didn't know anything about this and hey, guess what? It's right there in the short title ... 'relating to the powers and duties of the state auditor and the salary of the state auditor' ... that's verbatim."

Kuntz said that there'd been some public outcry to see the governor line-item veto the change, but this didn't come to pass. Among Gallion's audits was one that levied criticism at the spending by the governor's office for using state planes to commute.

"They'd been thrown under the bus by Josh Gallion's first audit, the misappropriation and misuse of public resources," Kuntz said.

The matter has been sent over to the state attorney general for consideration - Gallion is challenging it on constitutional grounds. An opinion from Attorney General Wayne Stenehjem is still pending.

Much ado about auditing

There's a clear disagreement on who has power over who in regard to the auditor's office. Gallion and Wardner hold opposing opinions:


"Who do you think is in charge of the state auditor? The Legislature! The Legislature provides the rules for the auditor. Somebody has to be over the auditor. It's the Legislature, and until this one came along, everything was fine," Wardner said. "The auditor and the Legislature are connected at the hip. We need each other."

Gallion disagrees.

"It's a misunderstanding of the role. I've heard 'the state auditor's office and the Legislature are joined at the hip.' No, we are not. We are separate but equal branches of government; we are not connected at the hip," he said. "The way I take my job, and I take it very seriously, the role of the state auditor and the Legislative Audit and Fiscal Review Committee is intended to present audits, to make that information available to the Legislature ... it's an information exchange session."

An element of this friction comes from Gallion's decision to skip the middleman when it comes to releasing audits. He said that the old way of handling audits saw the Legislature getting to be the first to see the results of these audits, leaving the public largely in the dark.

"We have a citizen Legislature; they are citizens just like anyone else. We're going to keep putting this information out there. We're going to make it public and transparent to everybody in North Dakota," Gallion said. "Right now we're sitting on 28 or 30 audits waiting to provide that information to the Legislative Fiscal Review Committee. If we were going by the old style ... we'd have 28 audits nobody has ever heard of. To me, that's wrong. It's not proper. It's a misunderstanding of the role."

Wardner offered the counterpoint that Gallion's decision to let these audits fly fresh into the court of public opinion was unfair to the organizations involved.

"It's the Legislature who puts performance audits in - let's get that straight. The committee is called the Legislative Audit and Fiscal Review Committee. What they are supposed to do is, when the auditor is done auditing, they bring their findings to this committee and if it's an audit that's controversial, they give their findings and the agency that was audited gets to give their side of the story. That's not the way things are going with the new auditor," Wardner said. "He has the audit and lets it go in a press release. Those people have nothing to say about it; they have to wait until the Audit and Fiscal Review Committee meets. So don't you kind of think you get judged and juried in the press? That's exactly what's happening now."

Wardner went on to say that he thinks much of the response to this issue is overblown.


"So there's a lot of things going, and yeah, it kind of frustrates me that we can't work on this thing without all this hullaballoo," he said. "They aren't going to hold him back from holding a performance audit. It's a big to-do about nothing."

Who has the authority?

Gallion said he isn't really certain why it was seen as necessary to sneak this change into the appropriations bill at the last minute.

"I think what the Legislature has been used to is the old style where we would quietly finish an audit and then the office would sit on it until the Legislative Fiscal Review Committee would meet, then it would be presented and be more public at that point. Well, to me that is not the appropriate way to do things, especially in accordance with the standards and structure of the state auditor's office being an elected position, accountable to the citizens of North Dakota," Gallion said. "As we've reevaluated our communications strategy, one of the things that I have changed since assuming this role is to direct our communication to the citizens ... we are more transparent today than we've ever been in the past."

Gallion said he's just interested in doing what's right and fulfilling what he sees as an obligation, first and foremost, to North Dakota's people, not its politicians.

"The public who pays for all of this to me deserves the right to know. So we're going to put all this information in the public's hands," Gallion said. "If that makes some people upset ... well, I'm sorry that they're upset but we're going to do the job, we're going to report to the citizens as we should."

Wardner, for his part, offered some speculation on the motivations behind the rules change. He insisted that the majority of the Legislative Audit and Fiscal Review Committee were as unaware of this amendment as anyone else, and speculated that it was really only one person who put this in.

"You know what I think?" Wardner said. "There was one individual who stuck it in there and most people on audit and fiscal review didn't know about it. Remember one thing: This was not a plan by a bunch of people in the Legislature. It was something that happened."


Wardner said that one audit, most likely the audit of the North Dakota State College of Sciences that found inappropriate activities, was specifically a point of contention for some in the Legislature.

"What do you think brought it on? The Wahpeton one. Whatever they found, that's not a problem. You know what irritated people? It didn't bother me because I didn't care, but legislators it bothered ... he finished the audit, he put it out in the newspaper and the Audit and Fiscal Review Committee still hasn't heard it yet," Wardner said. "Now, part of that is their fault but the point is that now it's kicked around and bantered around in the media. What they don't like is that, he likes that. He likes to do that because it looks like he's in charge ... but remember this, it's meaningless. They don't have to do anything-the auditor is a fact finder and he gives recommendations. He does not have authority to tell them that they have to do something. You know who has that authority? The Legislature. Without the Legislature, those audits are meaningless."

Wardner said he would not have voted on its approval had he known it was there, and said it was not clear that this change had been amended to the bill.

"Some of the legislators were frustrated - that's the bottom line. I didn't know it was there," Wardner said. "I know one of our conferees who knew it was there but probably didn't think it was real important ... you got to understand that it's a (very long) bill and as soon as it's done, it's at the end of the session. What do we want to do? We want to get done."

He also remains adamant that a special session would be an egregious expense to fix the issue.

"We'll take care of it over this biennium; we're not going to have a special session for that. We're not! Why would we spend $75,000 - that's a day - we'd need to do this over three days to make this change," Wardner said. "That's the process. We can work together. They're not going to keep him from doing their performance audits."

Wardner said he didn't feel this change had any impact on matters of public interest.

The Press attempted to contact multiple neighboring state auditors offices for comment, but the role is far more individualized across state to state than other political roles, and there were none that could be reached at press time that were comparable to North Dakota - which is to say, elected by the people and empowered to do performance audits.


This rules change, Wardner noted, does not impact fiscal audits at all.

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