Audit: Agency broke law over contract for North Dakota's new logo

North Dakota's new "Be Legendary" logo.
Courtesy photo

The North Dakota Department of Commerce violated the law on bidding uncompetitive contracts totaling more than $87,000 for the state's new "Be Legendary" logo, according to an audit released Monday .

North Dakota Auditor Joshua Gallion said the report has been given to Legislature's Audit and Fiscal Review Committee, which could forward it and any recommendations for sanctions to the attorney general's office.

The agency, in a response contained in the audit, maintained it did nothing wrong.

The new and simplistic logo sparked criticism earlier this year when the contract for it was awarded to a Minnesota company headed by Kara Ellefson, a marketing executive at Gov. Doug Burgum's Great Plains Software, which he later sold to Microsoft.

The company was awarded the $9,500 job without competition because it came in below the $10,000 threshold required for additional bids.

Gallion said the audit found two temporary employment contracts that were used to "stay under the purchasing thresholds that required contractor competition."

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All contracts should have been treated as one, Gallion said.

Commerce Director Michelle Kommer did not immediately return telephone calls on Monday. In a statement, the agency said it worked with state budget writers on the contract.

The agency said it "did not violate state law when temporary employees were hired to complete an additional workflow, separate from the initial contract deliverables."

Burgum spokesman Mike Nowatzki said the Republican governor did not recommend his former employee for job. He said the response from the Commerce Department, which is a cabinet-level agency, "speaks for itself."

North Dakota's Republican-led Senate killed a bill in March sponsored Democratic Rep. Marvin Nelson that would require the Commerce Department to scrub the logo and hold a contest. The bill had sailed through the House after lawmakers learned the logo was awarded to the Minnesota firm.

The audit released Monday also found the agency improperly charged more than $850,000 to a wrong two-year budget cycle. The department agreed with that finding but disagreed that it incorrectly made payments totaling nearly $124,000 to unapproved subcontractors.