The North Dakota Senate Appropriations Committee convened on March 11, 2025, to discuss several key changes regarding the auditing processes for state agencies and political subdivisions. A significant proposal discussed was the elimination of billing state agencies for the costs associated with audits of special funds. This change, supported by the insurance commissioner, aims to streamline the auditing process and reduce financial burdens on state agencies.

The committee clarified that while the state will no longer charge for audits of special funds, it will continue to bill for federal single audits, which are mandated by the federal government. The rationale behind this decision is that if the federal government requires these audits, it should bear the associated costs. Funds collected from these audits will be deposited back into the general fund for future legislative appropriations.

Another important topic was the proposed reduction of the retainage fee for private sector audits. Currently, political subdivisions withhold 20% of audit fees until the audit reports are verified. The committee discussed lowering this retainage to 5%, which would alleviate cash flow issues for private firms conducting these audits.

Additionally, the committee addressed an oversight from the previous session regarding the annual receipts threshold for audits of occupational and professional boards. The threshold will be increased from $200,000 to $2 million, meaning that only entities with annual revenues exceeding this amount will require a full audit. Those below this threshold will undergo a smaller government review process.

The meeting also touched on changes related to bonding fund claims, which will now involve the Office of Management and Budget (OMB) instead of the North Dakota Insurance Reserve Fund. This shift is expected to maintain existing auditing processes while altering the reporting structure.

Overall, these discussions reflect the committee's efforts to enhance the efficiency of state auditing practices and reduce financial burdens on both state agencies and private firms. The proposed changes are set to improve the auditing landscape in North Dakota, ensuring compliance while fostering a more manageable financial environment for all parties involved.