Auditor Says State Indian Affairs Commission “Misspent State Funds” on Gift Cards


Tom Stromme /Tribune North Dakota Indian Affairs Commissioner Scott Davis testified in support of SCR 4017 on Thursday morning in the Fort Lincoln room.

State Auditor Josh Gallion’s office has dinged North Dakota’s Indian Affairs Commission for buying nearly $8,000 worth of gift cards which were given to students and mentors at an annual leadership conference.

The audit report also says the commission hasn’t done a proper inventory, nor has it conducted a fraud risk assessment, but I suspect it’s those gift cards that will get the most attention.

Here’s the auditor’s findings (the full report is below):

It doesn’t surprise me that the the folks at the IAC were unaware that this sort of thing is illegal. Article X, Section 18 of North Dakota’s constitution is often ignored. It’s simple text, and a plain reading means that not only is the state prohibited from handing out gift cards to kids at a conference but many economic development programs in which the state government (or a political subdivision thereof) gives a gift or credit to a private enterprise ought to be unconstitutional as well.

That issue was actually before the state Supreme Court some years back, but through an exercise in judicial gymnastics you really have to read to appreciate the justices upheld the policies.

By the way, this provision in the state constitution is why all those people crying out to use the Legacy Fund for Alaska-style dividend payments are never going to get their way. Not without a constitutional amendment (or another tortured interpretation from the judicial branch of government). The State of North Dakota can’t just tax one group of people (in this instance the oil industry) and give the proceeds to another group of people.

Nor should we want them to.

Anyway, I don’t think we should judge the IAC too harshly for this finding. The audit finding is accurate, and it sounds like they’ll comply going forward, but this is a relatively small amount of money spent in good faith. Besides, I’d be willing to bet the IAC is hardly the only department of state government which has done this sort of thing.

UPDATE: I spoke with Indian Affairs Commissioner Scott Davis, and he told me the money for the gift cards actually came from sponsorships he secured each year for the conference. Which, he acknowledge, doesn’t change the auditor’s finding but does add some important context.

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