A new North Dakota state auditor shakes things up, and controversy follows
BISMARCK — North Dakotans had grown accustomed to electing a state auditor named Bob Peterson. After all, the father and son pored over the state’s books in successive tenures that lasted more than 40 years.
But that consistency was shattered with the election of Josh Gallion in 2016. Now, the new auditor is at the center of a dispute between two branches of state government over the powers granted to his office.
A Republican, Gallion’s approach has ruffled some feathers within his own party and attracted speculation that he has a higher office in mind. Some have grumbled about a new practice of issuing news releases trumpeting state agencies’ shortcomings.
But in an interview from his Capitol office, Gallion said he’s focused on his work as auditor and made no apologies for the direction he’s taken the agency. He declined to disclose any plans for the 2020 election.
"I'm just trying to do the right thing every day," he said.
A legislative committee that keeps tabs on the state auditor’s work will meet next week for the first time since the Republican-controlled Legislature tried to restrict Gallion’s ability to launch certain audits in a last-minute and almost unnoticed move earlier this year.
The budget bill amendment has prompted a petition drive seeking to undo the Legislature’s action at the ballot box. And Attorney General Wayne Stenehjem recently issued an opinion arguing the restrictions were likely unconstitutional.
Still, the state House’s top lawmaker called on Gallion to follow the law because a court hasn't ruled on it. Gallion, however, has maintained it would be “improper” for him to follow something that's been deemed unconstitutional.
“Will he follow the law as we passed it or not?” said Republican Rep. Mike Nathe, a member of the Legislative Audit and Fiscal Review Committee. “If he expects the agencies to follow the law, then the arbiter, the guy who’s judging everybody should be following the law.”
At issue is a new law preventing Gallion from launching performance audits without lawmaker approval. Performance audits are known as deep dives on specific functions of state agencies.
Democratic Rep. Corey Mock, a member of the conference committee that introduced the amendment, said it wasn’t intended to block those examinations. He said lawmakers had questions over how staff time was being used since Gallion eliminated a division dedicated to performance audits, which are now spread around a larger group of staffers, among other financial matters.
State law requires the auditor to review every state agency every two years, but performance audits are only to be done "as determined necessary."
“It was just a matter of getting that information, being aware of it before the audit had commenced, knowing that it could have some funding implications and wanting to have a better understanding of the office’s workload,” Mock said.
Gallion had requested about a dozen more auditors from the Legislature this year, but lawmakers only increased his staff by two full-time positions to 58. In a recent Facebook post , the office argued it would need 90 full-time staff to keep up with the growth in state expenses being audited.
Meanwhile, an update in the office's billing practices has meant many state institutions are facing increased costs for the auditors' services, which Gallion acknowledged generated some complaints. He said the office's billing formula was outdated.
Still, the legislative restrictions have been seen as an effort to rein in an aggressive new auditor who hasn’t shied away from politically sensitive targets, such as Gov. Doug Burgum and a former GOP state lawmaker.
Some of Gallion’s most vocal defenders have come from conservative corners of the state's politics. Republican Rep. Rick Becker, who founded a group of lawmakers known as the "Bastiat Caucus," urged his colleagues to reject the budget bill amendment on the floor. "The Minuteman Blog" has frequently backed the auditor and called him a "rising star — with the people."
Gallion, an Air Force veteran, said he hasn't attended Bastiat Caucus meetings and doesn't view himself as an anti-establishment figure. But Becker argued the legislative restrictions reflect Gallion's unwillingness to join the "good ol' boys club."
"He's one that has principle above party. Well, people in the party don't like that," Becker said.
Gordy Smith, who retired as audit manager before Gallion took over, disputed any suggestions that the new auditor has been more aggressive than his predecessor. Though it appears he’s doing them at a faster clip, Gallion’s performance audits have been less "comprehensive" than previous probes, Smith said. Gallion described them as “surgical" examinations.
Smith said Gallion may have garnered a bulldog reputation because he’s been more proactive about making the public aware of his findings. The office is now issuing news releases once an audit is complete and is trying to make its reports more digestible for readers with summaries and graphs.
Smith said it wasn’t the former auditor's “style” to alert the news media about audit findings, though the office did post completed reports on its website and discussed the results in a public legislative hearing. He also took issue with naming specific individuals in audit reports rather than referring to them only by title.
“It’s more publicized now than when we were there,” Smith said. “I can see clients feeling like they’re being put through a ringer, and I can see legislators feeling that the institutions are being ridiculed — that it’s being highlighted too much.”
Gallion said he's not out to embarrass public officials but argued taxpayers should be alerted about problems in state government.
"To me, the auditor's office today is more transparent than it ever has been before," he said. "Who do I report to? I'm elected by the citizens of North Dakota."
Voters in less than 20 states elect a state auditor, according to the National Association of State Auditors, Comptrollers and Treasurers. Many other states appoint auditors via the Legislature.
In North Dakota, the auditor is one of 13 statewide elected officials written in the state constitution. But the auditor's budget and duties are determined by the Legislature.
It's unclear if Wednesday's meeting will produce any new twists in the auditor saga. But Gallion and committee members said they weren't looking to butt heads.
"It is important for them to understand what's going on," Gallion said. "But I'm not limiting that communication just to them."