FOR IMMEDIATE RELEASE
October 14, 2019
Audit Shows Poor Oversight Led to Procurement and Contract Issues at Department of Commerce
Contact information: Brianna Ludwig, North Dakota State Auditor’s Office, 701-328-2453, firstname.lastname@example.org
State Auditor Joshua Gallion today released an audit of the North Dakota Department of Commerce which shows the Department had violated state law by circumventing procurement requirements related to the “Be Legendary” logo and overall brand refresh.
The audit found two temporary employment contracts were used to stay under the purchasing thresholds that required contractor competition and continue the work from the original contract. These contracts should have been treated as one contract for services and bid appropriately following OMB procurement requirements. The total cost of both contracts was $87,162.50 which would require the Department to follow Level 3 procurement requirements.
The Department also violated their appropriation authorized by the Legislature by improperly charging $853,908 to the wrong biennium. The Department made a $310,931 payment for work completed after the appropriation period had ended and they made a $458,801 advance payment which was unsupported and prohibited in the contract for the Enhanced Use Lease Grant program.
The audit also found that the Department of Commerce did not monitor contract deliverables of an entrepreneurial contract with a total cost of $253,921. As a result, contract payments totaling $123,750 were made to unapproved subcontractors.
"Circumventing procurement laws and authorizing unsupported payments does not promote transparency and accountability but instead, undermines the public’s trust in its government institutions,” Auditor Gallion said.
This audit is a result of the State Auditor’s Office statutory responsibility to audit or review each state agency once every two years. The complete audit report can be found on our website, http://bit.ly/NDCommerce19.