North Dakota Development Fund Audit Found Recordkeeping Gaps
An audit of the state agency revealed missing documentation for dozens of loans and investments made since 2019.
Updated on Sept. 20, 2026 in Investing
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A performance audit by Eide Bailly identified significant documentation failures within the North Dakota Development Fund, affecting a sample of transactions totaling $61 million. The report highlighted missing application, underwriting, and approval documents for over half of the sampled investments.
Why it matters
The findings suggest that reliance on informal practices without written policy led to lapses in oversight for millions in state-backed financing. Strengthening these record-keeping standards is essential to ensuring transparency and accountability for taxpayer-supported economic initiatives.
The audit analyzed 40 transactions worth approximately $61 million, or roughly 75% of the fund's total sampled value. Among these, 25 transactions showed documentation issues, including $4.4 million lacking board authorization and $2.4 million lacking updated financial analysis.
The players
Eide Bailly
An accounting and advisory firm that conducts performance audits and financial examinations for state government agencies.
North Dakota Development Fund
A state agency that provides loans and equity investments to businesses to foster economic development in North Dakota.
The details
Eide Bailly evaluated the fund's internal processes by comparing documented actions against established policies. The audit uncovered that 11 transactions lacked evidence of required board review, while 13 files contained incomplete application or underwriting documents. Furthermore, the fund failed to retain conflict-of-interest forms for board members during fiscal years 2020 and 2021, and the agency lacks a system to track loan denials and appeals.
Timeline
The performance audit covered the period from 2019 to 2024.
Board conflict-of-interest forms were missing for fiscal years 2020 and 2021.
The audit was presented to the Legislative Audit Committee on September 22, 2026.
The fund plans to implement updated record-keeping policies in the fourth quarter of 2026.
Money Landscape
This audit follows a pattern of heightened scrutiny by the Legislative Audit Committee regarding internal control standards within state-run financial entities. The findings mark a departure from the informal practices previously relied upon by the North Dakota Development Fund.
The lack of formal tracking for loan denials and appeals complicates the ability for small business owners to understand the status of their financing requests. Residents should ensure that any formal application for state funding includes written confirmation of receipt and board authorization to protect their business interests.
The takeaway
The audit emphasizes the importance of maintaining thorough, written documentation when interacting with state financing programs to ensure eligibility and compliance. Business owners should maintain their own comprehensive records of all communication and approvals when applying for public equity or loan support.
What happens next
The North Dakota Development Fund is scheduled to begin implementing updated record retention and formal policy requirements in the fourth quarter of 2026.
Further reading
For more information on the oversight of state-backed financial programs, visit the Investing section.
Live Poll
Do you trust local government development programs to maintain adequate documentation for taxpayer-funded investments?
