Continued Calls for a Full Performance Audit of Oil and Gas Division is Warranted

Last Friday, Lauren Donovan of the Bismarck Tribune published an article stating 38,700 emails had been deleted by the Department of Mineral Resource’s Oil and Gas Division but later recovered after an open records request. Those who instigated the request suggest the deletion of these emails was at the directive of Lynn Helms, the Director of the Department. The situation leads to further questions, all of which could be answered with a full performance audit of the Oil and Gas Division.

We’ve written about this particular performance audit more than once over the six months of our publication. Our first call for an audit was included in a post about creating smart oversight for pipeline infrastructure. Secondly, and much more relevant was when we asked Governor Doug Burgum to uphold his campaign pledge of supporting this very audit during the GOP primary.

READ: GOVERNOR BURGUM SHOULD PURSUE OIL & GAS AUDIT (AUDIO INCLUDED)

Repeated attempts to move forward with this audit in the Legislature have been to no avail. The argument continuously used by Director Lynn Helms is that the Department is regularly audited. True, as is every department. But those are routine audits, not performance audits. For a clear example of how the revelations differ from the two, we can look at the Department of Trust Lands. After routine audits were performed things seems to be running okay. Then a performance audit was undertaken which revealed startling mismanagement and demand for corrective actions. The performance audit led former Governor Jack Dalrymple to order over a dozen changes as recommended by the performance audit. 

The Legislative Audit and Fiscal Review Committee can and should add this to the agenda at their next meeting. I’ve heard Lynn Helms may be invited to give preemptive remarks to the committee. This is a rather odd step that has not necessarily been granted to other agencies and institutions. It leads us to question why it would be allowed in this instance.

Section 54-10-01 lays out specifically how the Auditor and the committee have authority to make this request. Here is the language from Section 4 of 54-10-01:

Perform or provide for performance audits of state agencies, or the agencies’ blended component units or discreetly presented component units, as determined necessary by the state auditor or the legislative audit and fiscal review committee.

An interesting and unexpected variable was thrown into this equation recently. The questionable separation of the Performance Audit Manager, Jason Wahl, and the Auditor’s Office now headed by Josh Gallion. Wahl’s position was removed in the legislative session when Rep. Mike Nathe introduced an amendment to the Auditor’s budget. Governor Burgum vetoed the language, and the Senate upheld the veto. Nathe targeted Wahl specifically and claims it was for budgetary reasons. I’m not buying it. Others in Bismarck have indicated the move may have been more political if not outright personal. We will continue to work to get to the bottom of it. Interestingly, Nathe serves on the Legislative Audit and Fiscal Review Committee. The whole situation leaves me to doubt the Auditors Office would make this a priority without the request from the Legislative Committee.

Interested parties content on maintaining the status quo complain this could turn into a political witch hunt, to which I say if there is nothing going on then there is nothing to worry about. In fact, the intent of the performance audit is to find areas of improvement and government efficiency by providing guidelines for agencies to adopt. That is exactly what happened with the Department of Trust Lands. It is also why Governor Doug Burgum supported the idea less than a year ago. This performance audit seems to fit neatly into the messaging Republicans have laid out before the voters post session and equally to the repeated demands of the Democrats. There is no reason to not undertake this audit. Royalty owners, oil and gas companies, and taxpayers should demand it.