NDDF Board Pauses New Financing Following Performance Audit Findings

The North Dakota Development Fund has temporarily halted all new financing transactions as the state agency attempts to address findings from a recent performance audit.

State Commerce Commissioner Chris Schilken announced the decision during a regular board meeting on Thursday, noting that the pause is intended to allow the department to evaluate the future of the fund. The move comes as the state prepares for the 2027 legislative session, which begins in January, where changes to economic development strategies may be proposed.

“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.

The North Dakota Development Fund serves as a state-administered program under the Commerce Department, providing loans and equity investments to support the expansion of businesses within the state. While new applications for loans, investments, and financial assistance commitments are frozen, the fund’s child care loan program remains unaffected, Grand Forks Herald reported.

Audit reveals mismanagement of taxpayer funds

The pause follows a performance audit covering the period from 2019 to 2024, which revealed a widespread lack of standardized practices and documentation regarding the management of millions of dollars in taxpayer funds. The audit highlighted deficiencies in how the fund handles lending, investments, and the ongoing monitoring of its portfolio.

During the same meeting, Schilken informed the board that he had completed the necessary paperwork to reclaim the Commerce commissioner’s seat on the NDDF board. The seat had been held by Rich Garman, the director of the Commerce Department’s Economic Development and Finance division, until Thursday morning.

Board members indicated that the decision to stop new transactions is a necessary step toward fixing internal systemic issues. Board member Joel Brown emphasized that the current priority must be on stabilizing the agency’s internal mechanics.

“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,” said Joel Brown, a member of the Development Fund board. “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.” Joel Brown

Lindsay Ulrickson, another board member, said that the agency's small staff of three would struggle to manage operational overhauls while simultaneously processing new project reviews.

Conflicts of interest and legislative scrutiny

The audit and subsequent investigations have raised serious questions regarding the oversight of state funds. A separate investigation by the Tribune identified a $500,000 Automate ND grant administered to ComDel Innovation in 2024. At the time, Jim Albrecht served as both the president of ComDel Innovation and the chair of the Development Fund.

The audit also identified roughly $4 million in transactions involving potential conflicts of interest involving Albrecht and Vice Chair Rob Lindberg. Both men resigned from their board positions on Oct. 20. The Tribune investigation found that government meeting minutes had been edited to remove references to a performance audit conducted by Eide Bailly in May and June, an action that an open records expert suggested could violate state law.

The political consequences for the fund are mounting. On Sept. 22, the North Dakota Legislative Audit and Fiscal Review Committee voted to recommend that the state legislature shut down the fund during the upcoming legislative session. The committee also recommended referring the audit to the Attorney General’s Office, though the Attorney General declined to take further action, citing a conflict of interest.

The North Dakota Ethics Commission has recently voted to open an inquiry to determine if a formal investigation into the fund is warranted.

Brian Opp, the Development Fund CEO, said that the current pause will enable staff to focus on managing the existing portfolio and ensuring the “continued effective management of current investments and obligations.”

The North Dakota Legislature is scheduled to begin its next session in January 2027.

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