House Appropriations Government Operations panel dry-runs state auditor funding amendment; no action taken

Chairman Munson opened the House Appropriations —Government Operations Division meeting and said the panel "has a quorum" and "we aren't going to take any action this morning," then introduced a dry run of amendment 02/2004, which Representative Pyle will carry to the floor.

Representative Pyle summarized the amendment's statement of purpose (25.0148.01001) and walked the committee through line-item changes. He said the amendment adjusts base payroll funding and showed a $219,998 increase "for the cost to continue wages and salaries," described as the 4% included in the 2023-25 biennium budget request. Pyle also said the amendment adds $927,774 for salary and benefit increases for health and retirement.

The draft reduces five FTE in the local government division, all paid from special funds, which Pyle said lowers that division's budget by $1,149,205. It adds two general-fund FTE, at $412,845 total, to cover audit reviews of four small political subdivisions (described in the meeting as $2,000,000 or less). Pyle described that change as a shift of responsibility and funding into the general fund.

The amendment would add a federally funded mineral-royalty audit position. Pyle said the position's salary is $99,686 with a total first-year cost of $107,202, "100% federally funded," and that funds would only be expended if the person is hired, with an anticipated start date of July 1, 2026.

On information-technology and cybersecurity spending, Pyle identified a net increase in operating expenses after two offsetting entries: an $80,000 increase in NDIT expenses and a general-fund reduction of $90,298 tied to administration-wide reductions. The committee discussed a separate, line-item IT consultant appropriation that appears on the long sheet as $585,000 after adding $135,000. Pyle also described a $435,000 allocation for security assessments for NDIT and the North Dakota University System, saying departments will no longer be billed individually.

Pyle said the amendment includes one-time funding of $25,000 for a peer review performed by the National State Auditor Association on the state's auditing work every three years, and one-time funding to replace end-of-life audit software (identified in the meeting as Teammate Plus). Pyle summarized the net fiscal effect, saying "there is an increase in the general fund of $1,669,295," a slight increase in special and federal funds, and a large reduction tied to removing five FTE.

Representative Bosch asked where a particular IT increase appears in the statement of purpose; staff and Pyle pointed to an "adjust for funding for operating expenses" column that nets the long-sheet IT entries. Bosch also framed the two FTE moving from other funds to the general fund as a form of property-tax relief for small communities, saying the change "is what we were calling property tax relief, I guess, because that is a property tax relief that we won't get credit for." Committee members agreed it would be helpful to state that on the House floor.

Committee members clarified that section 2 of the amendment addresses the new-and-vacant FTE pool and an increase to the state auditor's salary "to reflect the 3 and 3" applied to other employees. The committee did not move the amendment; members said they may present it to the full committee later in the week. The auditor was scheduled to appear later the same afternoon.

No motions or votes were taken during the session. Chairman Munson closed the meeting, noting the auditor would appear later and adjourning the panel.