ND Development Fund pauses new financing to address audit; Commerce head takes back board seat

Grant Coursey / The Bismarck Tribune By Nathan Price / The Bismarck Tribune Today at 4:56 PM Listen Comments Share Share this article News Reporting News Reporting Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. The Trust Project What is this? BISMARCK — The North Dakota Development Fund has temporarily paused new financing transactions as the embattled fund focuses on addressing the findings of a recent performance audit. State Commerce Commissioner Chris Schilken made the motion during the NDDF’s regular board meeting Thursday, saying the pause would allow Commerce and the board to evaluate the future role of the Development Fund in light of the audit's findings. ADVERTISEMENT He added that changes to how the state approaches economic development could be coming during the 2027 legislative session, which begins in January. “I just think that it makes sense (that) if we know there are going to be changes during session that we just pause ... until we get through session and we see where all that ends up,” Schilken said Thursday. Schilken told the board at the start of Thursday’s meeting that he had completed the paperwork necessary to “take back” the Commerce commissioner’s seat on the NDDF board, which former board member Rich Garman had held until Thursday morning. Garman serves as the director of the Commerce Department’s Economic Development and Finance division. The NDDF board approved Schilken’s motion to pause new financing unanimously. The fund is a state-administered financing program under Commerce designed to provide loans and equity investments to help new or expanding businesses in the state. The temporary pause on new financing transactions applies only to new applications the fund receives after the board’s vote, including new loans, investments, financial assistance commitments and other financing transactions, according to Commerce. The pause does not include the Development Fund’s child care loan program. Schilken said pausing new transactions would signal that the department is taking the performance audit’s findings seriously. ADVERTISEMENT “I think it's also recognizing that we are addressing some of the issues in the performance audit and taking it seriously,” he said. The performance audit, covering 2019-24, found a widespread lack of documentation and standardized practices at the fund in the lending, investment and monitoring of millions of dollars’ worth of taxpayer money. A Tribune investigation also identified a $500,000 Automate ND grant that was administered by the Development Fund to ComDel Innovation in 2024 while Jim Albrecht was president of the company and chair of the Development Fund. Albrecht and Vice Chair Rob Lindberg were named as the members of the Development Fund Board involved in roughly $4 million worth of conflict-of-interest transactions identified by the audit. Both resigned their positions on the board Oct. 20. The North Dakota Legislative Audit and Fiscal Review Committee voted Sept. 22 to recommend the North Dakota Legislature shut down the fund during next years legislative session and to refer the audit to the Attorney General’s Office, which declined to take further action, citing a conflict of interest. The North Dakota Ethics Commission recently voted to open an inquiry into the fund to determine if a formal investigation is warranted. The Tribune investigation uncovered that government records in the form of approved meeting minutes had been quietly edited to remove references to Eide Bailly's performance audit in May and June, which one open records expert said potentially violates state law. On Thursday the NDDF board discussed the results of the performance audit, as well as the efforts underway to address the audit’s findings. ADVERTISEMENT Board member Joel Brown said he agreed with Schilken’s motion to pause new financing transactions. “I think that at this point in time, it’s appropriate for us as a board and as a staff to focus very heavily on operational improvements,” he said. “We’ve got a long list of things that need to be worked on after this performance audit. So, taking the time to refocus on those efforts, I feel is appropriate.” Board member Lindsay Ulrickson said the pause was a prudent decision, noting the fund has a staff of three and that asking them to keep reviewing projects while also making significant operational changes would be a heavy lift. Development Fund CEO Brian Opp in a statement from Commerce said the pause will allow staff to focus on administering the fund’s existing portfolio and ensure the “continued effective management of current investments and obligations.” Comments Share Share this article News Reporting News Reporting Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. The Trust Project What is this? 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