Transcript Highlights:

• There is clarification in here that we report those FTEs to OMB and Legislative Council, and that these

Committee: Senate Industry and Business

Summary: The Senate Committee on Industry and Business reconvened to work on House Bill 1584, which would create a new pharmacy benefit manager (PBM) regulatory structure within the Insurance Department. Insurance Commissioner John Godfrey and Deputy Commissioner John Arnold explained a revised set of amendments negotiated with Representative Casper and the North Dakota Pharmacists Association. They said the bill largely kept the House policy intact but added technical corrections, narrowed some references in Chapter 19-02, created a separate PBM licensing class, set a delayed effective date for licensing, and established emergency authority so the department could begin building the new division. They also described the proposal to fund the program through existing trust fund resources, PBM license fees, and a transfer of about $1.6 million from the prescription drug transparency program fund, while allowing the department flexibility to hire needed attorneys, pharmacists, and examiners. A major point of discussion was Section 10, which would have required the Attorney General to represent and bear costs for lawsuits related to the bill. Chief Deputy Attorney General Claire Ness said the language was too broad and would go beyond normal constitutional defense work, potentially obligating her office to cover all lawsuits against the commissioner or state under the section. Representative Casper said the intent was only to avoid the Insurance Department having to seek emergency funding for litigation, and both he and department officials said they were open to removing the section or narrowing it. After further discussion, the committee agreed to remove Section 10 from the amendments. The committee then voted 4-0 to adopt the amended amendment package, and then voted 4-0 to give House Bill 1584 a do pass recommendation as amended and refer it to Appropriations. Members noted the bill was still a work in progress, but said the revised version was intended to move the PBM regulation issue forward while continuing discussion in the appropriations process.

Transcript Highlights:

• person that's very versatile as it relates to dollars and stuff, wouldn't you agree that the Office of OMB

Bills: SB32 , SB464 , SB996 , SB1163 , SB1173 , SB1277 , SB1452 , SB1453 , SB1548 , SB1882 , SB1883 , SB2016 , SB 32

Committee: Senate Local Government

Transcript Highlights:

• That is the amount of money that I estimate, based on talking to representatives of OMB, representatives
• They, as you see in the bill, have responsibility for managing this project in concert with OMB.
• And I believe, and I have shared that information with both OMB, and we're researching how that happened

Summary: The committee first approved minutes from prior meetings and then filled a vacancy on Legislative Management by appointing Senator Braunberger after a caucus recommendation. Members then took up an unusual appeal from the North Dakota Gaming Commission after the Administrative Rules Committee voided a rule that would have raised the poker tournament entry fee from $300 to $1,500. Legislative Council explained the administrative rules process and the grounds for voiding a rule, while Gaming Commission representatives argued the commission had statutory authority and that the issue should be left to the full Legislature. Several members raised concerns about legislative intent, precedent, and whether the matter should wait for the regular session. On a motion to disapprove the Administrative Rules Committee’s finding and restore the rule, the committee voted no, so the voiding of the rule remained in place. The committee then reviewed the fiscal impact statement for Constitutional Measure No. 1 on congressional age limits. Staff reported no current fiscal impact because no litigation had been filed, though members noted the possibility of future legal challenges if the measure were enforced. After that, the committee began hearing proposed bills for the upcoming special session, starting with several kratom-related measures. Representative Wolff withdrew her bill, saying it was redundant, while Representative Heinert presented a bill to legalize and regulate natural kratom for adults 21 and over under the Attorney General, with licensing, labeling, penalties, and a public health campaign. Senator Axtman presented a companion bill targeting synthetic kratom derivatives, placing them on the controlled substances list with penalties similar to marijuana. Legislative Council later outlined Representative Johnston’s separate kratom bill, which would regulate kratom under the Department of Agriculture with product registration, licensing, and enforcement provisions. The committee also heard Senator Hogue’s bill to address funding for the State Historical Society’s military museum project. He argued the state was in breach of contract and that delaying action would increase costs, so his bill would authorize a $35 million line of credit to keep construction moving while fundraising continued. Members questioned the relationship between the proposed line of credit, existing SIF funding, and the private fundraising requirement, but no vote was taken before the meeting moved on. Finally, Representative Sue Ann Olson began presenting a bill requiring the Class D driver’s license test to be administered in English, arguing it was a safety measure because road signs are in English and law enforcement encounters can be complicated by language barriers. The transcript cuts off before her testimony concluded or any action was taken on that bill.

Transcript Highlights:

• And apparently, OMB realized that there needed to be some adjustments made to that.
• OMB has estimated that there will be about 40% of those eligible for waiver under this bill, which is
• OMB has estimated that there will be about 40% of those will be eligible for waiver under this bill,

Transcript Highlights:

• We are in close discussions with OMB, with Justin Kringstad, and the Pipeline Authority.
• So this is our latest forecast from OMB, and this is what we're using with the governor's office as we
• But since the OMB forecast has been updated as of April, I just wanted to show you here what OMB's forecast

Summary: The Water Topics Overview Committee met to receive interim status updates on several water-related studies and Department of Water Resources projects. The committee approved the March 26, 2026 minutes, observed a moment of silence for the late Representative Conmy, and then heard updates on the watershed management study and the stormwater/wastewater study. Staff reported that the committee had already received the testimony contemplated in the study plans, including input from state agencies, local governments, and out-of-state entities, and that any further action would be at the committee’s discretion. The Department of Water Resources then provided project and budget updates on NAWS and the Southwest Pipeline Project. Reese reported NAWS is expected to serve about 81,000 users, with a total projected cost of about $571 million and about $96 million remaining, while the Southwest Pipeline Project is estimated at $1.06 billion total with about $409 million remaining. Members asked about funding sources, capacity needs, and whether current and future construction is being designed for increased demand; department staff said current work is designed for ultimate capacity, but some future components may need redesign based on new requests. The committee also discussed local cost shares, Minot’s role in NAWS funding, and whether the system is adequate for peak demand. A major portion of the meeting focused on the department’s cash management, carryover, and long-term water funding outlook. The department said Resources Trust Fund revenues are tied to oil extraction taxes and are affected by stripper well exemptions and future oil price declines. Members expressed concern about large carryover balances and whether the state is obligating more money than can realistically be spent in a biennium. The department reported about $340.6 million in remaining carryover and said it is trying to reduce that through a two-tier pre-construction/construction process and closer project vetting. The department also summarized the Deloitte studies on regional governance and finance and on cost-share policy. Stakeholders generally favored keeping the current governance structures for NAWS and Southwest with improvements, while Red River stakeholders leaned toward a different option; the department said it will bring an implementation plan back in September. On cost share, Deloitte’s recommendations would reduce some percentages, prioritize projects differently, and use other measures to close a projected long-term funding gap. Members debated affordability, local burden, deferred maintenance, and whether statutory changes may be needed to allow the commission more flexibility in prioritizing and funding projects. No formal votes or final actions were taken beyond approving the minutes and receiving the updates.

Transcript Highlights:

• I know that you preceded me here in the House, so you remember the days when OMB would come, and I think
• I think the general public will appreciate the customer service aspects of the OMB when we talk about

Committee: House Appropriations

Summary: The committee heard FY27 budget presentations for the Department of Public Safety and Corrections, beginning with Public Safety Services. House Fiscal Division staff reviewed the department’s recommended budget of $645.9 million, including supplemental pay, State Police, Motor Vehicles, and the State Fire Marshal. Officials explained that the overall budget reflects a net decrease from FY26, driven largely by shifts in funding sources, removal of one-time statutory dedications, and adjustments tied to undercollections in fees and self-generated revenues. State Police was recommended at $459.7 million, OMV at $86.7 million, and the Fire Marshal at $41.1 million. Department leaders also described ongoing modernization efforts, staffing vacancies, and the use of efficiencies identified internally. Lieutenant Colonel Robert Burns and agency heads testified about State Police operations, including increased cadet graduations, improved Mardi Gras security, progress on APHIS and OMV modernization, and the new crime lab under construction. Members asked about undercollections, vacancies, the role of public tag agents, and whether the agency could expand counter-drone capabilities. Burns said the department has identified about $11 million in efficiencies, but warned that counter-drone work would require additional funding, citing a $4.5 million fiscal note for HB 940 and roughly $9 million more for a robust unit. OMV officials said staffing and retention remain difficult, but modernization should improve service and reduce lines; they also said the agency continues to rely on public tag agents and is working through reinstatement fee collection issues. The committee then reviewed the Department of Corrections FY27 budget, recommended at $902.3 million, with most funding from State General Fund and a large increase tied to higher incarceration costs, medical needs, overtime, and added capacity at Louisiana State Penitentiary. DOC officials said the department remains under pressure from vacancies, turnover, contraband, and medical costs, and that the budget includes funding to add 150 correctional officers at Angola and to house ICE detainees at Camp J. They also discussed criminal justice reinvestment savings, prison enterprises, and reentry programs funded through the Second Chance Act. Members asked about staffing, inmate deaths at Elaine Hunt, work-release pay, and whether the department is tracking the true long-term cost of incarceration. Officials said they are pursuing pay increases, recruitment, expanded training and reentry programs, and more data-driven workforce alignment, while acknowledging that many budget pressures remain unresolved.

Transcript Highlights:

• Office of Management and Budget, or OMB, in what's referred to as Statistical Policy Directive 15, or

Committee: Senate Senate Committee on the Census

Summary: The Senate Committee on the Census held a hearing on July 7, 2026 focused on how the census defines and tabulates race and ethnicity for redistricting. The sole witness, Professor Jeffrey Weiss, reviewed the history of Public Law 94-171, the Voting Rights Act, and Census Bureau race categories, explaining how block-level census data has been central to one-person, one-vote compliance and to enforcing Section 2 of the Voting Rights Act. He described the evolution from separate race and Hispanic-origin tabulations to multiracial reporting, the addition of voting-age and citizen voting-age data, and the increasing complexity created by coalition districts and multiracial populations. A major theme was uncertainty about Census 2030. Weiss said the federal government is considering changes to race and ethnicity questions, possible elimination of the MENA category, reduced multiracial detail, and discontinuation of differential privacy, while also discussing a possible citizenship question and other procedural changes coming through the Commerce Department rather than the Census Bureau. He warned that these shifts, combined with staffing cuts, reduced outreach, and scaled-back testing, could affect the availability and granularity of redistricting data and may trigger litigation. Committee members pressed him on the Biden-era revisions, the Trump administration’s current actions, and whether future data might have to be reported at a higher geographic level if block-level privacy protections are removed. Weiss also summarized Supreme Court redistricting doctrine, describing the move from Baker v. Carr and Reynolds v. Sims to the Gingles framework, then to later decisions limiting race-conscious districting, including Shelby County, Rucho, and the recent Louisiana v. Calais decision. He said Calais significantly narrowed federal Section 2 protections but does not directly preempt state voting rights acts, which he noted are being adopted in several states and may still allow coalition-based protections. The hearing ended after questions from the chair and vice chair, with no votes or formal committee actions taken, and the committee adjourned.

Transcript Highlights:

• Office of Management and Budget, or OMB, in what's referred to as Statistical Policy Directive 15, or

Committee: Senate Senate Committee on the Census

Transcript Highlights:

• And even though we call OMB, even though we call the team together at the district level, there seems

Summary: The committee first heard House Bill 124, which would create a permanent Office of New Americans within the Department of Workforce Solutions. The sponsor and supporters said the office would help immigrant and refugee workers access training, licensing, language support, and other workforce resources, while also helping employers fill labor shortages in industries such as construction, agriculture, oil and gas, health care, and child care. Support came from advocates, business groups, faith organizations, and immigrant-rights groups; there was no opposition. Members asked about data protection, the number of other states with similar offices, and whether the office could help recruit and credential foreign-trained medical professionals. The bill passed on a do-pass motion with several yes votes and some no votes recorded, and the sponsor explained the vote as a way to support families and workforce integration. The committee then considered House Bill 314, which would authorize zero-interest loans through the Local Government Division for political subdivisions to repair flood- and debris-damaged public infrastructure and remove debris from the October 19, 2024 storm event. There was no public testimony in support or opposition. Members briefly asked about the $150 million appropriation and whether it was already in the budget, and the sponsor said it was. The bill received a do-pass motion, a second, and was approved without opposition. Finally, the committee took up Senate Bill 64, as amended, to codify the Office of Special Education and a deputy secretary position within the Public Education Department. The sponsor and department officials said the bill would formalize an office already created by executive order, improve statewide coordination, support compliance with IDEA and the Yazzie-Martinez case, and develop a statewide IEP template to reduce inconsistency across districts. They emphasized that gifted education would remain in Curriculum and Instruction and that the bill would not add new paperwork or mandates for districts. Supporters included education leaders, disability advocates, vocational rehabilitation, and special education professionals; there was no opposition. Members raised questions about parent understanding of IEPs, monitoring and enforcement, funding, charter school coverage, and the treatment of gifted and twice-exceptional students. The bill passed on a do-pass motion with unanimous support from those present.

Transcript Highlights:

• that in our last rating cycle, we achieved a level five, the first earned in Washington State for an OMB

Summary: The Early Learning & Human Services Committee held public hearings on several child care and disability-related bills. House Bill 2317 would exempt certain ECAP and Head Start programs from DCYF licensing when they operate part-day or school-day in public school buildings or on public school property. Staff and the prime sponsor said the bill would remove duplicative licensing barriers and help expand preschool seats, especially as Washington prepares to add more ECAP slots. Testifiers from Head Start, school-linked providers, and the Washington Federation of Independent Schools supported the bill, describing licensing delays, added costs, and lost classroom time; no one testified in opposition. The committee also heard House Bill 2099, which would expand ECAP access for military families with incomes up to Working Connections Child Care limits and adjust prioritization for families with deployed or single custodial military parents. The prime sponsor and multiple supporters, including retired military leaders, Head Start/ECAP advocates, ESD staff, and a military-community partnership, said military families face frequent moves, deployment-related strain, and child care shortages that affect readiness and family stability. Testifiers said the bill would help families access care without changing the program’s low-income focus or adding state cost. House Bill 2350 would require DSHS to notify residents, guardians, and family members when a residential habilitation center is found out of compliance with federal CMS requirements, and to provide follow-up notices on correction and enforcement actions. The sponsor said the bill responds to limited communication around recent noncompliance issues at Rainier School and would improve transparency; DSHS had requested a narrow amendment about how notice is provided to residents. Disability rights advocates strongly supported the bill, saying families need timely information to protect loved ones and make informed decisions. Finally, House Bill 2318 would let ECAP and Head Start children count toward the 5% subsidy participation threshold needed for Early Achievers quality improvement awards. Supporters said the current rule can discourage providers from enrolling ECAP children because it risks losing an award, even though ECAP already requires Early Achievers participation. The sponsor and testifiers described the bill as a small fix to reduce a funding disincentive for providers serving high-need children. The committee took no votes and adjourned after closing the hearings on all four bills.

Transcript Highlights:

• That is the amount of money that I estimate, based on talking to representatives of OMB, representatives
• "They, as you see in the bill, have responsibility for managing this project in concert with OMB.
• And I believe, and I have shared that information with both OMB, and we're researching how that happened

Committee: Joint Legislative Management

Transcript Highlights:

• It's like, why are we going to vote for an appropriations bill if the OMB can turn around and just cut

Committee: House Federal Funding Stabilization Subcommittee

Transcript Highlights:

• Contractor Cyber Security Vulnerability Reduction Act, will require the Office of Management and Budget, or OMB
• Contractor Cyber Security Vulnerability Reduction Act, will require the Office of Management and Budget, or OMB
• The Office of Management and Budget, or OMB, to oversee updates to the Federal Acquisition Regulation
• ><07:16:42.240><c> left</c> We are being left in the dark without knowing what plans DOGE, OPM, and OMB

Bills: HR758 , HR856 , HR153 , HR872 , HB1515

Keywords: fencing, youth development, underserved communities, athletics, Peter Westbrook, scholarships, academic achievement, SNAP, nutrition assistance, contingency funds, government shutdown, hunger prevention, vulnerable populations, federal funding, condolences, aviation safety, transportation disaster, victims support, first responders, Creutzfeldt-Jakob Disease

Transcript Highlights:

• No specific list, but I think just the OMB memo created a lot of confusion. Thank you. And, Mr.
• No specific list, but I think just the OMB memo created a lot of confusion.
• No specific list, but I think just the OMB memo created a lot of confusion.
• No specific list, but I think just the OMB memo created a lot of confusion. Thank you. And, Mr.

Committee: House Education Finance

Transcript Highlights:

• Both OMB and OLS scored it the same as a savings. It's just a tweak in the language.
• But my question is not what OMB scores it as.

Summary: The Assembly Budget Committee met on June 28, 2026 and considered a long list of budget and policy bills, reporting many of them out of committee, often with amendments. Early measures included AB 2550 on continued dependent health coverage for certain adults with disabilities, AB 4794 allowing tax data sharing with the New Jersey Innovation Authority and Secure Choice Savings Board, and AB 3381/SB 1493 updating occupational therapy licensure requirements. The committee also advanced AB 4014, creating a social media research center at a public four-year institution, though one member opposed it as unnecessary spending given existing research on social media harms. Another bill, AB 5048/SB 1281, would ban certain apparel and diaper products with intentionally added PFAS; some members opposed it over safety and cost concerns, especially for firefighter gear, but it was reported. The committee also moved AB 383, which promotes volunteerism to help FamilyCare and SNAP recipients meet eligibility requirements, and AB 4357, extending telehealth pay parity, though one member objected to parity between telehealth and in-person care. The committee then took up several energy, environmental, and housing-related bills. AB 5188, the Advanced Grid Technologies Act, was released despite opposition from some members and labor interests. AB 2524 would let dual-use solar projects participate in community solar, and AB 5236 would strengthen pediatric psychiatry and behavioral health services; both were reported. AB 5348, allowing temporary use of open-space and related funds for certain municipalities, drew sharp criticism as a diversion of preservation money to fill budget holes, but passed. AB 5280 returned unexpended county appropriations to Hudson County and authorized supplemental operating aid; it also passed despite objections about prior bidding violations. AB 5347 provided certain motor vehicle-related funding to municipalities and was reported, as was AB 5334/SB 4423, appropriating Green Acres and CBT revenues for local open space and park projects. A major portion of the meeting focused on tax and business-related bills. AB 5329 increased the child tax credit for 2026-2028, with testimony urging that the expansion be made permanent; it was reported. AB 3899, the General Contractor Licensing Act, also passed. AB 5310/SB 4406 clarified sentencing under certain circumstances and was reported. AB 5330, allowing temporary transfers in the pension system, drew testimony from NJEA warning that the State Health Benefits Program was in crisis and asking for a longer repayment period to avoid rate spikes; the bill was still reported. AB 1326 created a higher education governance and funding task force and was amended to add a Talmudic institution or theological seminary representative. Later, AB 5333/SB 4424 appropriated additional Green Acres and CBT funds for recreation and conservation projects and was reported. The committee also advanced several business and alcohol-related measures, including AB 5235 establishing the School-Based Partnership for Access and Resilience for Kids program, AB 5325 reducing business formation fees, AB 4836/SB 2368 on portable solar devices, AB 4881 establishing an advanced nuclear energy procurement program, AB 3974/SB 3183 revising renewable energy incentive and solar interconnection rules, AB 4013 creating a social media research center focused on addictive behavior, AB 5225 making temporary alcohol beverage provisions permanent, and AB 5295 revising alcoholic beverage licensing laws. The most contentious debate came on AB 4085, the Fair Price Protection Act, which would restrict “surveillance pricing” and regulate grocery pricing practices. Consumer advocates supported the bill as a protection against individualized pricing, while retailers and chambers of commerce argued the language was too broad and could undermine loyalty programs, discounts, and electronic shelf labels. Despite those objections, the committee voted to report the bill after amendments. Finally, AB 4530/SB 3739 on EV supply equipment standards was reported, and AB 5322 imposing a temporary cap on net operating loss deductions under the corporate business tax sparked strong opposition from business groups and a policy debate over whether legitimate losses and investment-related deductions should be limited; the bill was still moved out of committee.

Transcript Highlights:

• institution is entitled must be distributed at the time and in the manner agreed to by the institution and OMB
• SIF is where we've been transferring from for the past few bienniums for this program, so it directs OMB

Committee: Joint Higher Education Funding Review Committee

Transcript Highlights:

• institution is entitled must be distributed at the time and in the manner agreed to by the institution and OMB
• SIF is where we've been transferring from for the past few bienniums for this program, so it directs OMB

Committee: Joint Higher Education Funding Review Committee

Summary: The Higher Education Funding Review Committee met to continue work on a draft higher education funding formula and related capital building fund changes. Lisa Johnson of the North Dakota University System updated the committee on the board’s developing policy for low-producing academic programs. She said the board is using a five-year rolling window, with thresholds of fewer than 10 undergraduate graduates or fewer than 5 graduate graduates, and that programs flagged in three consecutive review cycles would go to the board for review. Possible outcomes include continuation, continuation with modifications, inactivation, or termination. Members asked about how the policy would account for enrollment, program costs, workforce need, and programs that serve students outside their major. Johnson said the board would likely use an accompanying procedure to consider those factors. She also reported that about 200 programs could potentially be reviewed under current guidance, with 135 inactivated and 112 terminated, and said the process is intended to support quality and stewardship rather than simply cut programs. Jamie Wilkie then reported on the Capital Building Fund. He reviewed the fund’s history, matching requirements, and use for extraordinary repairs, deferred maintenance, and some legislatively authorized projects. He said about $334 million in state and matching dollars has been invested overall, with roughly 78.7% going to deferred maintenance and extraordinary repairs. Committee members pressed for updated information on how much deferred maintenance has actually been reduced, and several members said they wanted clearer reporting on the return on investment from new buildings versus repairs. NDSU representatives said the tier funding has helped significantly reduce deferred maintenance and allowed demolition and renovation work on campus. The committee also discussed the need for updated five-year facility plans and space-utilization information from the institutions. The committee then began a section-by-section review of a draft bill that would replace the current higher education funding formula with an FTE-based model and restructure the capital building fund. The draft would fund UND and NDSU differently from the other nine institutions, use fall enrollment rather than completed credits, add performance funding for completions in in-demand fields, create research incentives for UND and NDSU, and combine capital building fund tiers while changing matching requirements and eligible uses. Members raised concerns about the treatment of professional students, the use of CIP codes, incentives for waivers, and whether the formula should rely on more current data. The committee did not take final action on the draft during this meeting, but it continued detailed discussion and indicated more review would follow.

Transcript Highlights:

• institution is entitled must be distributed at the time and in the manner agreed to by the institution and OMB
• SIF is where we've been transferring from for the past few bienniums for this program, so it directs OMB

Summary: The committee met to discuss higher education funding and capital building policy. Members first heard an update from NDUS Deputy Commissioner Lisa Johnson on low-producing academic programs. She described a proposed board policy using a five-year rolling window and thresholds of fewer than 10 undergraduate graduates or fewer than 5 graduate graduates, with programs flagged for three consecutive review periods going to the board. Possible outcomes would include continuation, continuation with modifications, inactivation, or termination. Members asked about how the review would account for program costs, service to other students, workforce demand, and the difference between inactivation and termination. Johnson said the board would consider broader factors and that campuses already do detailed program analysis. Several members also asked about cost savings and staffing impacts from program terminations, and Johnson said the board would try to provide more information later. The committee then received a report on the Capital Building Fund from Jamie Wilkie. He reviewed the program’s history, matching requirements, and recent uses, noting that about $334 million in state and matching dollars has been invested overall, with most going to deferred maintenance and extraordinary repairs. Members discussed whether the program is reducing deferred maintenance and requested updated systemwide data on deferred maintenance and campus space utilization. Wilkie said the board is considering a new study to update deferred maintenance figures, which are based on information more than 12 years old. He also reported that several institutions have used current biennium funds for projects such as residence hall renovations, health sciences housing, generators, and building repairs. Later, the committee began a detailed walkthrough of a draft bill that would replace the current higher education funding formula with an FTE-based model and also revise the capital building fund structure. The draft would use fall enrollment FTEs, add completion incentives for degrees in in-demand fields, and create a separate research funding component for UND and NDSU tied to doctoral completions and external research expenditures. Members raised concerns about the use of older data in the formula, the treatment of waivers, the weighting of professional and health sciences programs, and the use of CIP codes to define CTE and education incentives. The bill draft would also combine capital building fund tiers, broaden eligible uses for deferred maintenance and legislatively authorized projects, change matching requirements, repeal the old formula chapter and the capital pool, and transfer funds from the Strategic Investment and Improvements Fund into the capital building fund. No final votes were taken during the portion provided; the meeting was primarily discussion and review.

Transcript Highlights:

• Significant controls reviewed for OMB include P-card receipt reconciliations, P-card approvals, and approval
• We have begun depositing checks in accordance with OMB, so this has been implemented, and we do deposit
• That would be through OMB. That provides that.

Committee: Joint Legislative Audit and Fiscal Review Committee

Transcript Highlights:

• Significant controls reviewed for OMB include P-card receipt reconciliations, P-card approvals, and approval
• We have begun depositing checks in accordance with OMB, so this has been implemented, and we do deposit
• That would be through OMB.

Committee: Joint Legislative Audit and Fiscal Review Committee

Summary: The committee convened, approved the prior meeting minutes, and received a memo summarizing major audit items. The State Auditor’s office and outside auditors then presented a series of audits, many of which were clean with unmodified opinions and no findings, including the Bank of North Dakota, the Guaranteed Student Loan Program, the Office of the Governor, the State Treasurer, the Office of Management and Budget, the Department of Transportation, the Department of Environmental Quality, Lake Region State College, and the Office of the Governor. The North Dakota Stockmen’s Association audit was also clean overall, but it repeated findings about limited segregation of duties and auditor assistance in preparing financial statements, which the auditor said were expected to continue because of the organization’s small size. Committee members asked about out-of-state board addresses, and the association explained those members were North Dakota residents using South Dakota mailing addresses. Several audits did include findings. The Council on the Arts audit identified two issues: payroll charged to federal awards without supporting time records, and $12,825 in Cultural Endowment Fund spending that was not allowable under state law, including staff training, retreats, and executive director candidate travel. The Department of Public Instruction audit found unsupported scholarship applications in the paraprofessional-to-teacher program, but additional testing confirmed the funds were credited properly and students completed required school district work, so no improper payments were identified. The University of North Dakota audit found a lack of documentation and transparency in School of Law admissions decisions; the auditor said the law school used a holistic process but did not keep notes or evaluation tools to show why applicants were admitted, waitlisted, or denied. UND leadership said the school is in good standing with the American Bar Association and agreed better documentation is needed, and the auditor said the issue was the missing documentation, not ABA accreditation itself. The most extensive discussion centered on the North Dakota Racing Commission audit, which found four findings: overspending the promotion fund’s 25% operating cap, grant conditions not being met, improper breeder fund awards, and improper procurement. The auditor said promotion fund spending exceeded the cap by $327,447 and the fund balance dropped sharply over the audit period. Racing Commission director Bruce Johnson said the agency had become complacent, that grant requests were treated as routine, and that controls and documentation need to be tightened. He also explained that the breeder fund overpayments involved two horses whose ownership transfers were not properly documented before racing, and that the procurement issue stemmed from an advertising contract that proceeded without proper written procurement procedures after a misunderstanding with the State Procurement Office. The auditor said the Racing Commission will now be audited every two years because of the findings. The committee also received updates on Dakota College at Bottineau’s bank reconciliations, which Minot State University said had been brought current after an 18-month backlog, with only one account still needing cleanup; members asked for a written report on the corrective actions. The North Dakota Fair Foundation was reported to have dissolved, with remaining funds transferred to another nonprofit account for continued support of the state fair. Finally, the Department of Public Instruction provided an update on school meal debt, revising the earlier estimate to about $1.1 million based on incomplete district survey responses, and said the Anti-Lunch Shaming law likely increased meal debt because schools must feed students regardless of account balance. Members discussed the need for a more accurate year-end debt figure and possible future reporting at a later committee meeting.