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Commerce tightens disclosure, reviews grants after audit questions on related-party reporting
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Summary
Commerce says it clarified Development Fund conflict-of-interest forms and will prohibit related-party lending; the agency also described competitive rural grocery and destination-development grants and instituted a longer RFP window for motion-picture grants.
The Department of Commerce responded to audit questions Dec. 9 about disclosures and grant administration connected with the North Dakota Development Fund and other programs.
Commissioner Chris Shilkin told the committee perceived related-party disclosures in the Development Fund audit stemmed from an ambiguous form. "The relationship between this board member and the entities listed on the conflict of interest form were arms length relationships," Shilkin said, and the agency redesigned the conflict-of-interest form to separate "ownership" from "perceived conflicts" and in January will consider a policy change to prohibit related-party transactions entirely.
Shilkin outlined grant programs administered by Commerce: a $1 million rural grocery sustainability grant program that received 47 applications requesting about $4.7 million in need, a motion-picture grant program (legislatively funded in prior biennia) now subject to a minimum 30-day RFP window after a prior short application period, and a $25 million destination development fund that awarded $15 million across 23 tourism projects after receiving 106 applications.
Committee members questioned how Development Fund loans are evaluated for return and default risk; Shilkin said most non-directed awards are loans or equity positions and that the agency will improve post-closing tracking and economic-impact follow-up so the Legislature can better assess return on investment.
Commerce said rural-grocery grantees have received initial disbursements and that quarterly grantee reporting is due by Dec. 31. The agency offered to supply detailed loan-performance data to the committee on request.
