North Dakota Development Fund faces potential dissolution after missing records

Residents of North Dakota are facing a potential restructuring of state economic development. The state legislature is currently considering a bill that would dissolve the North Dakota Development Fund. This move comes after a recent review found missing paperwork for nearly $4 million in loans and grants.

The initial findings came from a one-time performance review conducted by an independent firm hired by the State Auditor. The audit identified incomplete documentation for a significant portion of the fund's financial records. While the fund still receives an annual financial statement audit, this specific review examined how the agency operates and handles its duties.

Two key members of the fund's board stepped down on October 20. Jim Albrecht, the chair, and Rob Lindberg, the vice chair, submitted their resignation letters before the Ethics Commission announced its decision to launch an inquiry. Albrecht stated he was leaving to support the Department of Commerce's efforts to move the fund in a new direction. Lindberg expressed hope as the administration restructures its economic development efforts.

State Auditor Josh Gallion noted that a follow-up performance audit would likely require legislative action. He explained that the legislature must pass a bill to mandate such a review. The current financial audits are handled by private firms under contracts administered by the auditor's office, but a performance audit looks deeper into operational efficiency.

The legislature's audit review committee recommended eliminating the fund and transferring its outstanding loans and investments to the Bank of North Dakota. Sen. Jeff Magrum, R-Hazelton, who chairs the committee, believes there is sufficient support to dissolve the agency during the upcoming session. He stated, “I think at the very least, we will probably dissolve the North Dakota Development Fund this coming session. For sure, I think we have the support for that.”

The Ethics Commission is now reviewing the audit and gathering information to decide whether to open a formal investigation. The commission's inquiry does not mean an ethics violation has been confirmed. Brian Opp, the Development Fund's CEO, confirmed the board resignations but declined to comment on the probe. Fund officials said they have already begun strengthening disclosure and recordkeeping practices.

Eliminating the fund requires approval from the state legislature. The process is set to move forward as lawmakers debate the future of the agency and its financial responsibilities.